The House met pursuant to adjournment with Speaker Shallenburger in the chair.
The roll was called with 122 members present.
Rep. Lloyd was excused on verified illness.
Rep. Benlon was excused on excused absence by the Speaker.
Prayer by guest chaplain, the Rev. Steven R. Chambers, pastor, Central Christian Church,
Arkansas City, and guest of Rep. Shriver:
Almighty God, in these precious moments of invocation, we pause from the duties
of office, to thank you for the privilege of serving others. For you, O God, in your
wisdom have created within us the need to give of ourselves. As we convene in this
great assembly of public service, may your wondrous spirit of hope and justice de-
scend upon each one present this day. We remain confident in your divine guidance
as this business of this state is given due consideration for we all are stewards of this
trust bequeathed unto us. We thank you for this time of prayer and for the gift of
this day. Amen.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were introduced and read by title:
HB 2770, An act concerning Haskell Indian nations university; providing for credit hour
state aid and out-district state aid, by Representatives Sloan, Ballard, Findley, Flower and
Tanner.
HB 2771, An act concerning the Kansas public employees retirement system and systems
thereunder; creating the Kansas public employees retirement advisory council; relating to
membership and election, purposes and compensation thereof; system transactions and
communications with members; amending K.S.A. 1997 Supp. 74-4902 and 74-4909 and
repealing the existing sections, by Representatives Sloan, Ballard, Findley and Glasscock.
HB 2772, An act relating to real estate appraisers; amending K.S.A. 58-4102 and 58-
4103 and repealing the existing sections, by Committee on Financial Institutions.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills and resolutions were referred to committees as indicated:
Agriculture: HB 2761, 2762.
Appropriations: HB 2753, 2758.
Business, Commerce and Labor: HB 2754, 2765, 2766.
Economic Development: HR 6008.
Education: HB 2752, 2767.
Federal and State Affairs: HB 2757.
Financial Institutions: HB 2763.
Governmental Organization and Elections: HB 2759, 2769.
Health and Human Services: SB 425.
Insurance: SB 409, 411, 412, 423.
Judiciary: SB 404, 405.
Taxation: HB 2755, 2756, 2768.
Tourism: HB 2764.
Transportation: HB 2760.
CHANGE OF REFERENCE
Speaker Shallenburger announced the withdrawal of HB 2722 from Committee on Tour-
ism and referral to Committee on Federal and State Affairs.
COMMUNICATIONS FROM STATE OFFICERS
From Larry Welch, Director, Kansas Bureau of Investigation, in accordance with K.S.A.
60- 4117, status of the KBI State Forfeiture Fund.
The complete report is kept on file and open for inspection in the office of the Chief
Clerk.
CONSENT CALENDAR
No objection was made to HB 2418, 2707 appearing on the Consent Calendar for the
third day. The bills were advanced to Final Action on Bills and Concurrent Resolutions.
FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS
HB 2418, An act concerning oil and gas; relating to operators of wells, gas gathering
systems and underground natural gas storage facilities; amending K.S.A. 1996 Supp. 55-155
and repealing the existing section, was considered on final action.
On roll call, the vote was: Yeas 122; Nays 0; Present but not voting: 0; Absent or not
voting: 2.
HB 2707, An act relating to sales taxation; authorizing Atchison county to impose a sales
tax for jail construction purposes; amending K.S.A. 1997 Supp. 12-187 and 12-189 and
repealing the existing sections, was considered on final action.
On roll call, the vote was: Yeas 112; Nays 10; Present but not voting: 0; Absent or not
voting: 2.
HB 2408, An act concerning eye enucleation; persons performing; amending K.S.A.
65-1728 and repealing the existing section, was considered on final action.
On roll call, the vote was: Yeas 122; Nays 0; Present but not voting: 0; Absent or not
voting: 2.
HB 2622, An act concerning the dental practices act; concerning dental services for
dentally indigent persons; amending K.S.A. 1997 Supp. 65-1456 and 65-1466 and repealing
the existing sections, was considered on final action.
On roll call, the vote was: Yeas 122; Nays 0; Present but not voting: 0; Absent or not
voting: 2.
Mr. President and Mr. Speaker: Your committee on conference on House amend-
ments to SB 373, submits the following report:
The Senate accedes to all House amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with House Committee of the Whole
amendments, as follows:
On page 3, in line 30, by striking ``certificate'' and inserting ``certificates'';
On page 4, in line 10, by striking ``July 1'' and inserting ``December 31''; by striking all
in lines 19 through 21; following line 21, by inserting the following new subsections:
``(m) ''Medical center employee`` means an employee of the university of Kansas medical
center whose salary is not paid in whole or in part from the hospital revenue fund.
(n) ``Hospital employee'' means an employee of the university of Kansas medical center
who performs services for the university of Kansas hospital as part of one or more depart-
ments or other administrative units of the hospital and whose salary is paid in whole or in
part from the hospital revenue fund.``;
Also on page 4, in line 22, by striking ``(m)'' and inserting ``(o)''; in line 23, by striking
``(n)'' and inserting ``(p)''; in line 31, by striking ``16 member'' and inserting ``fourteen-
member''; in line 32, by striking ``Six'' and inserting ``Eight''; in line 36, by striking ``six'' and
inserting ``eight'';
On page 5, in line 3, by striking all following the period; by striking all in lines 4 and 5;
in line 6, by striking ``six'' and inserting ``eight''; in line 13, by striking ``six'' and inserting
``eight''; in line 16, preceding the period, by inserting ``and two members shall be members
of the Kansas legislature. The two legislative appointees shall be appointed by the governor
from a panel of four nominees composed of (1) one member of the legislature nominated
by the speaker of the house of representatives, (2) one member of the legislature nominated
by the minority leader of the house of representatives, (3) one member of the legislature
nominated by the president of the senate, and (4) one member of the legislature nominated
by the minority leader of the senate''; in line 18, by striking ``two'' where it appears the last
time; in line 19, by striking ``years, two'' and inserting ``one year, three''; in line 20, by
striking all preceding ``members'' and inserting ``two years and three''; in line 21, by striking
``four'' and inserting ``three''; by striking all in lines 22 through 36; in line 37, by striking
``(f)'' and inserting ``(e)''; in line 38, by striking ``four'' and inserting ``three'';
On page 6, in line 1, by striking ``four-year'' and inserting ``three-year''; in line 2, by striking
``(g)'' and inserting ``(f)''; in line 8, by striking ``(h)'' and inserting ``(g)''; by striking all in lines
10 through 23; in line 24, by striking ``(i)'' and inserting ``(h)''; in line 32, by striking ``(j)''
and inserting ``(i)''; in line 41, by striking ``(k)'' and inserting ``(j)'';
On page 7, in line 6, by striking ``(l)'' and inserting ``(k)''; in line 8, by striking ``eight'' and
inserting ``seven''; in line 12, by striking ``(m)'' and inserting ``(l)''; in line 22, by striking
``eight'' and inserting ``seven''; in line 25, by striking ``(i)'' and inserting ``(h)''; in line 26, by
striking ``(n)'' and inserting ``(m)''; in line 29, by striking ``of directors'' where it appears the
first time; also in line 29, by striking ``of directors'' where it appears the second time; in line
36, by striking ``(o)'' and inserting ``(n)''; in line 40, by striking ``(p)'' and inserting ``(o)'';
On page 8, by striking all in lines 5 through 43;
On page 9, in line 10, following ``when'', by inserting ``in the opinion of the board''; in
line 37, following ``when'', by inserting ``in the opinion of the board'';
On page 10, in line 33, by striking ``have'' and inserting ``Have''; in line 43, by striking
the period and inserting a semicolon;
On page 12, by striking all in lines 37 through 43;
On page 13, by striking all in lines 1 through 10 and inserting the following material to
read as follows:
``(h) The authority is authorized to negotiate contracts with one or more qualified parties
to provide collection services. The selection of a collection services provider shall be based
on responses to a request for proposals from qualified professional firms and shall be ad-
ministered in accordance with policies adopted by the board.
(i) Notwithstanding any provision of law to the contrary, no abortion shall be performed,
except in the event of a medical emergency, in any medical facility, hospital or clinic owned,
leased or operated by the authority. The provisions of this subsection are not applicable to
any member of the physician faculty of the university of Kansas school of medicine on
property not owned, leased or operated by the authority. As used in this subsection, ``medical
emergency'' means a pregnant woman's medical condition that, on the basis of a physician's
good-faith clinical judgment, necessitates an immediate abortion to avert the woman's death
or to avert a serious risk of substantial and irreversible impairment of a major bodily func-
tion.'';
On page 14, in line 32, by striking ``other'';
On page 15, in line 10, by striking ``Employees'' and inserting ``Hospital employees and
medical center employees''; in line 14, by striking ``Vacation'' and inserting ``Notwithstanding
the provisions of K.A.R. 1-9-13 or any other rules and regulations or of any statute to the
contrary, all vacation''; in line 23, preceding ``university'' by inserting ``employees of the'';
in line 24, by striking ``employees'';
On page 16, in line 36, by striking ``general'';
On page 18, in line 2, following the semicolon, by inserting ``and'';
On page 21, in line 20, by striking ``1996 Supp.'';
On page 22, in line 20, by striking ``1996 Supp.'';
On page 24, in line 5, by striking ``shall be exempted'' and inserting ``is exempt'';
On page 31, in line 34, by striking ``1996 Supp.'';
On page 34, by striking all in lines 41, 42 and 43;
By striking all on pages 35 through 44;
On page 45, by striking all in lines 1 through 8 and inserting the following sections to
read as follows:
``Sec. 27. K.S.A. 79-3606 is hereby amended to read as follows: 79-3606. The following
shall be exempt from the tax imposed by this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, and motor vehicles as defined by K.S.A. 79-1017 and amendments
thereto;
(b) all sales of tangible personal property or service, including the renting and leasing
of tangible personal property, purchased directly by the state of Kansas, a political subdi-
vision thereof, other than a school or educational institution, or purchased by a public or
private nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ
bank and used exclusively for state, political subdivision, hospital or public hospital authority
or nonprofit blood, tissue or organ bank purposes, except when: (1) Such state or, hospital or public hospital authority is engaged or proposes to engage in any business specifically
taxable under the provisions of this act and such items of tangible personal property or
service are used or proposed to be used in such business, or (2) such political subdivision
is engaged or proposes to engage in the business of furnishing gas, water, electricity or heat
to others and such items of personal property or service are used or proposed to be used
in such business;
(c) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly by a public or private elementary or sec-
ondary school or public or private nonprofit educational institution and used primarily by
such school or institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of buildings to be
used for such purposes. The exemption herein provided shall not apply to erection, con-
struction, repair, enlargement or equipment of buildings used primarily for human habita-
tion;
(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any public or private nonprofit hospital or public hospital authority, public or private elementary or secondary school or a public or private nonprofit
educational institution, which would be exempt from taxation under the provisions of this
act if purchased directly by such hospital or public hospital authority, school or educational
institution; and all sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any political subdivision of the state, the total cost of
which is paid from funds of such political subdivision and which would be exempt from
taxation under the provisions of this act if purchased directly by such political subdivision.
Nothing in this subsection or in the provisions of K.S.A. 12-3418 and amendments thereto,
shall be deemed to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any political subdivision of the state. As used in this
subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto, ``funds of a political
subdivision'' shall mean general tax revenues, the proceeds of any bonds and gifts or grants-
in-aid. Gifts shall not mean funds used for the purpose of constructing, equipping, recon-
structing, repairing, enlarging, furnishing or remodeling facilities which are to be leased to
the donor. When any political subdivision of the state, public or private nonprofit hospital or public hospital authority, public or private elementary or secondary school or public or
private nonprofit educational institution shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling fa-
cilities, it shall obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials for incorporation in
such project. The contractor shall furnish the number of such certificate to all suppliers
from whom such purchases are made, and such suppliers shall execute invoices covering
the same bearing the number of such certificate. Upon completion of the project the con-
tractor shall furnish to the political subdivision, hospital or public hospital authority, school
or educational institution concerned a sworn statement, on a form to be provided by the
director of taxation, that all purchases so made were entitled to exemption under this sub-
section. As an alternative to the foregoing procedure, any such contracting entity may apply
to the secretary of revenue for agent status for the sole purpose of issuing and furnishing
project exemption certificates to contractors pursuant to rules and regulations adopted by
the secretary establishing conditions and standards for the granting and maintaining of such
status. All invoices shall be held by the contractor for a period of five years and shall be
subject to audit by the director of taxation. If any materials purchased under such a certif-
icate are found not to have been incorporated in the building or other project or not to have
been returned for credit or the sales or compensating tax otherwise imposed upon such
materials which will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20th day of the month
following the close of the month in which it shall be determined that such materials will not
be used for the purpose for which such certificate was issued, the political subdivision,
hospital or public hospital authority, school or educational institution concerned shall be
liable for tax on all materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney fees. Any contractor
or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any
materials purchased under such a certificate for any purpose other than that for which such
a certificate is issued without the payment of the sales or compensating tax otherwise im-
posed upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor,
shall be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amend-
ments thereto;
(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the govern-
ment of the United States, its agencies or instrumentalities concerned a sworn statement,
on a form to be provided by the director of taxation, that all purchases so made were entitled
to exemption under this subsection. As an alternative to the foregoing procedure, any such
contracting entity may apply to the secretary of revenue for agent status for the sole purpose
of issuing and furnishing project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary establishing conditions and standards for the granting
and maintaining of such status. All invoices shall be held by the contractor for a period of
five years and shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise dispose of any ma-
terials purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615 and amendments
thereto;
(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;
(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft
repair, modification and replacement parts and sales of services employed in the remanu-
facture, modification and repair of aircraft sold to persons using such aircraft and aircraft
repair, modification and replacement parts as certified or licensed carriers of persons or
property in interstate or foreign commerce under authority of the laws of the United States
or any foreign government or sold to any foreign government or agency or instrumentality
of such foreign government and all sales of aircraft, aircraft parts, replacement parts and
services employed in the remanufacture, modification and repair of aircraft for use outside
of the United States;
(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;
(i) the lease or rental of all films, records, tapes, or any type of sound or picture tran-
scriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of such meals to em-
ployees of any restaurant, eating house, dining car, hotel, drugstore or other place where
meals or drinks are regularly sold to the public if such employees' duties are related to the
furnishing or sale of such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A.
8-126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the pro-
visions of subsection (o) of K.S.A. 79-3603 and amendments thereto;
(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer, manu-
facturer or compounder may obtain from the director of taxation and furnish to the supplier
an exemption certificate number for tangible personal property for use as an ingredient or
component part of the property or services produced, manufactured or compounded;
(n) all sales of tangible personal property which is consumed in the production, man-
ufacture, processing, mining, drilling, refining or compounding of tangible personal prop-
erty, the treating of by-products or wastes derived from any such production process, the
providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;
(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of
which is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments
thereto, the production of food for human consumption, the production of animal, dairy,
poultry or aquatic plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;
(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner;
(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;
(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry. For the purposes of this sub-
section, the term prosthetic and orthopedic appliances means any apparatus, instrument,
device, or equipment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any disabled person in
leading a normal life by facilitating such person's mobility; such term shall include acces-
sories attached or to be attached to motor vehicles, but such term shall not include motor
vehicles or personal property which when installed becomes a fixture to real property;
(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, which property or services are used in the operation or mainte-
nance of the district;
(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ``farm
machinery and equipment or aquaculture machinery and equipment'' shall include machin-
ery and equipment used in the operation of Christmas tree farming but shall not include
any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a
farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto. Each
purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;
(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;
(v) all sales of food products to any contractor for use in preparing meals for delivery
to homebound elderly persons over 60 years of age and to homebound disabled persons or
to be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;
(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ``severing'' shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;
(y) all sales of materials and services used in the repairing, servicing, altering, maintain-
ing, manufacturing, remanufacturing, or modification of railroad rolling stock for use in
interstate or foreign commerce under authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;
(aa) all sales of materials and services applied to equipment which is transported into
the state from without the state for repair, service, alteration, maintenance, remanufacture
or modification and which is subsequently transported outside the state for use in the trans-
mission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or man-
ufactured homes'' means sales other than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;
(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;
(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;
(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;
(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization. This exemption shall not apply to tangible
personal property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;
(kk) on and after January 1, 1989, all sales of machinery and equipment used directly
and primarily for the purposes of manufacturing, assembling, processing, finishing, storing,
warehousing or distributing articles of tangible personal property in this state intended for
resale by a manufacturing or processing plant or facility or a storage, warehousing or dis-
tribution facility:
(1) For purposes of this subsection, machinery and equipment shall be deemed to be
used directly and primarily in the manufacture, assemblage, processing, finishing, storing,
warehousing or distributing of tangible personal property where such machinery and equip-
ment is used during a manufacturing, assembling, processing or finishing, storing, ware-
housing or distributing operation:
(A) To effect a direct and immediate physical change upon the tangible personal property;
(B) to guide or measure a direct and immediate physical change upon such property
where such function is an integral and essential part of tuning, verifying or aligning the
component parts of such property;
(C) to test or measure such property where such function is an integral part of the
production flow or function;
(D) to transport, convey or handle such property during the manufacturing, processing,
storing, warehousing or distribution operation at the plant or facility; or
(E) to place such property in the container, package or wrapping in which such property
is normally sold or transported.
(2) For purposes of this subsection ``machinery and equipment used directly and pri-
marily'' shall include, but not be limited to:
(A) Mechanical machines or major components thereof contributing to a manufacturing,
assembling or finishing process;
(B) molds and dies that determine the physical characteristics of the finished product
or its packaging material;
(C) testing equipment to determine the quality of the finished product;
(D) computers and related peripheral equipment that directly control or measure the
manufacturing process or which are utilized for engineering of the finished product; and
(E) computers and related peripheral equipment utilized for research and development
and product design.
(3) ``Machinery and equipment used directly and primarily'' shall not include:
(A) Hand tools;
(B) machinery, equipment and tools used in maintaining and repairing any type of ma-
chinery and equipment;
(C) transportation equipment not used in the manufacturing, assembling, processing,
furnishing, storing, warehousing or distributing process at the plant or facility;
(D) office machines and equipment including computers and related peripheral equip-
ment not directly and primarily used in controlling or measuring the manufacturing process;
(E) furniture and buildings; and
(F) machinery and equipment used in administrative, accounting, sales or other such
activities of the business;
(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and con-
ducting programs for the improvement of public health;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides, germi-
cides, pesticides and fungicides; and services, purchased and used for the purpose of pro-
ducing plants in order to prevent soil erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services rendered by an ad-
vertising agency or licensed broadcast station or any member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;
(pp) all sales of drill bits and explosives actually utilized in the exploration and produc-
tion of oil or gas;
(qq) all sales of tangible personal property and services purchased by a nonprofit mu-
seum or historical society or any combination thereof, including a nonprofit organization
which is organized for the purpose of stimulating public interest in the exploration of space
by providing educational information, exhibits and experiences, which is exempt from fed-
eral income taxation pursuant to section 501(c)(3) of the federal internal revenue code of
1986;
(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;
(ss) all sales of tangible personal property and services purchased by a public broad-
casting station licensed by the federal communications commission as a noncommercial
educational television or radio station;
(tt) all sales of tangible personal property and services purchased by or on behalf of a
not-for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;
(uu) all sales of tangible personal property and services purchased by or on behalf of
any rural volunteer fire-fighting organization for use exclusively in the performance of its
duties and functions;
(vv) all sales of tangible personal property purchased by any of the following organiza-
tions which are exempt from federal income taxation pursuant to section 501 (c)(3) of the
federal internal revenue code of 1986, for the following purposes, and all sales of any such
property by or on behalf of any such organization for any such purpose:
(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related serv-
ices to reduce disability and death from cardiovascular diseases and stroke;
(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;
(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for per-
sons who are mentally ill and to education, research and support for them and their families;
(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of elimi-
nating diabetes through medical research, public education focusing on disease prevention
and education, patient education including information on coping with diabetes, and pro-
fessional education and training;
(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all
lung diseases through medical research, public education including information on coping
with lung diseases, professional education and training related to lung disease and other
related services to reduce the incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's Disease and Related Disorders Association,
Inc. for the purpose of providing assistance and support to persons in Kansas with Alzhei-
mer's disease, and their families and caregivers; and
(ww) all sales of tangible personal property purchased by the Habitat for Humanities Humanity for the exclusive use of being incorporated within a housing project constructed
by such organization.
New Sec. 28. (a) There is hereby created the joint committee on oversight of the uni-
versity of Kansas hospital authority which shall be within the legislative branch of state
government and shall be composed of three senators and three members of the house of
representatives. The three senate members shall be the chairperson of the committee on
ways and means of the senate or a member of the senate appointed by the chairperson, the
vice-chairperson of the committee on ways and means of the senate or a member of the
senate appointed by the vice-chairperson, and the ranking minority member of the com-
mittee on ways and means of the senate or a member of the senate appointed by the ranking
minority member. The three representative members shall be the chairperson of the com-
mittee on appropriations of the house of representatives or a member of the house of
representatives appointed by the chairperson, the vice-chairperson of the committee on
appropriations of the house of representatives or a member of the house of representatives
appointed by the vice-chairperson, and the ranking minority member of the committee on
appropriations of the house of representatives or a member of the house of representatives
appointed by the ranking minority member.
(b) All members of the joint committee on oversight of the university of Kansas hospital
authority shall serve for terms ending on the first day of the regular legislative session in
odd-numbered years. The joint committee shall organize annually and elect a chairperson
and vice-chairperson in accordance with this subsection. After June 30 in odd-numbered
years, the chairperson shall be one of the representative members of the joint committee
elected by the members of the joint committee and the vice-chairperson shall be one of the
senate members elected by the members of the joint committee. After June 30 in even-
numbered years, the chairperson shall be one of the senate members of the joint committee
elected by the members of the joint committee and the vice-chairperson shall be on of the
representative members of the joint committee elected by the members of the joint com-
mittee. The chairperson and vice-chairperson of the joint committee shall serve in such
capacities until July 1 of the ensuing year. The vice-chairperson shall exercise all the powers
of the chairperson in the absence of the chairperson. If a vacancy occurs in the office of
chairperson or vice-chairperson, a member of the joint committee, who is a member of the
same house as the member who vacated the office, shall be elected by members of the joint
committee to fill such vacancy. Within 30 days after the effective date of this act, the joint
committee shall organize and elect a chairperson and vice-chairperson in accordance with
the provisions of this act.
(c) A quorum of the joint committee shall be four. All actions of the joint committee
shall be taken by a majority of all of the members of the joint committee.
(d) The joint committee may meet at any time and at any place within the state on the
call of the chairperson.
(e) The provisions of the acts contained in article 12 of chapter 46 of the Kansas Statutes
Annotated, and amendments thereto, applicable to special committees shall apply to the
joint committee on oversight of the university of Kansas hospital authority to the extent that
the same do not conflict with the specific provisions of this act applicable to the joint
committee.
(f) In accordance with K.S.A. 46-1204 and amendments thereto, the legislative coor-
dinating council may provide for such professional services as may be requested by the joint
committee on oversight of the university of Kansas hospital authority.
(g) The joint committee on oversight of the university of Kansas hospital authority may
introduce such legislation as it deems necessary in performing its functions.
(h) In addition to other powers and duties authorized or prescribed by law or by the
legislative coordinating council, the joint committee on oversight of the university of Kansas
hospital authority shall:
(1) Make an annual report to the legislative coordinating council as provided in K.S.A.
46-1207 and amendments thereto and such special reports to committees of the house of
representatives and senate as are deemed appropriate by the joint committee;
(2) monitor the implementation of the university of Kansas hospital authority act in-
cluding the transfer of assets and liabilities from the university of Kansas medical center to
the newly-created authority and the development of operational policies by the board of
directors of the authority;
(3) review administrative systems implemented by the authority including the establish-
ment of personnel and financial management systems;
(4) analyze the quantity and quality of services rendered by the authority and the need
for such services;
(5) conduct an on-going review of revenues and costs;
(6) review the authority's capital structure, plans for the issuance of indebtedness for
major equipment acquisitions or capital investments, and long range physical development
plans; and
(7) make recommendations, including the introduction of legislation, and take such
other actions as are appropriate to assure that the purposes of the legislation establishing
the hospital authority are achieving the objectives for which the authority was created.
(i) The provisions of this section shall expire on December 31, 2003.'';
And by renumbering sections accordingly;
Also on page 45, in line 9, by striking ``1996 Supp.''; in line 12, by striking ``statute book''
and inserting ``Kansas register'';
On page 1, in the title, in line 19, after ``directors'' by inserting ``; creating a legislative
oversight committee''; in line 20, by striking ``1996 Supp.'';
And your committee on conference recommends the adoption of this report.
Michael P. Farmer
Henry M. Helgerson, Jr.
John T. Edmonds
Conferees on part of House
Dave Kerr
Marge Petty
Alicia l. Salisbury Conferees on part of Senate
On motion of Rep. Farmer, the conference committee report on SB 373 was adopted.
On roll call, the vote was: Yeas 108; Nays 14; Present but not voting: 0; Absent or not
voting: 2.
The Committee on Fiscal Oversight recommends HB 2683 be passed.
The Committee on Governmental Organization and Elections recommends HB 2635, 2729, 2731 be passed.
The Committee on Utilities recommends HCR 5035 be adopted.
Upon unanimous consent, the House referred back to the regular order of business,
Introduction of Bills and Concurrent Resolutions.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were introduced and read by title:
HB 2773, An act concerning alcohol or drug related offenses involving the operation of
a vehicle; relating to administrative hearings; amending K.S.A. 1997 Supp. 8-255 and 8-
1002 and repealing the existing sections, by Representative Tanner.
HB 2774, An act concerning pupils who are blind or visually impaired; requiring a state-
wide study to assess the literacy of such pupils, by Committee on Education.
HB 2775, An act concerning state officers and employees; relating to state governmental
ethics; amending K.S.A. 46-241 and repealing the existing section, by Committee on Gov-
ernmental Organization and Elections.
HB 2776, An act concerning governmental ethics; relating to certain violations; relating
to past official acts, by Committee on Governmental Organization and Elections.
HB 2777, An act relating to public libraries; concerning the basis for property tax levies
thereof; amending K.S.A. 75-2551 and 79-2930 and repealing the existing sections, by Com-
mittee on Governmental Organization and Elections.
HB 2778, An act concerning crimes and punishment; creating the crime of unlawful
biomedical experimentation, by Representative McCreary (By request).
REPORT ON ENGROSSED BILLS
HB 2408 reported correctly engrossed February 2, 1998.
REPORT ON ENROLLED BILLS
HB 2545, 2548, 2554, 2556, 2557, 2565, 2566, 2567, 2595 reported correctly enrolled
on February 2, 1998.
On motion of Rep. Jennison, the House adjourned until 11:00 a.m., Tuesday, February
3, 1998.