The House met pursuant to adjournment with Speaker pro tem Mays in the chair.
The roll was called with 124 members present.
Rep. Johnston was excused on excused absence by the Speaker.
Prayer by Chaplain Svoboda:
Loving God,
You sent the Messiah into this world
Not as a rich person,
but as a peasant.
Not as a politician or a priest,
but as a carpenter.
Not as a soldier,
but as an activist.
Jesus spoke of turning the other cheek.
He healed the ear of a man who came to arrest him.
He forgave those who killed him.
It is in Jesus' life that we see how we are to live.
We are to love our enemies,
to forgive those who have hurt us,
to go and sin no more.
Help us to learn to live
following your teaching.
In Jesus' name way pray.
Amen.
The Pledge of Allegiance was led by Rep. Horst.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bill was introduced and read by title:
HB 2557, An act concerning crimes; relating to aggravated battery against a law
enforcement officer; amending K.S.A. 21-3415 and repealing the existing section, by
Committee on Federal and State Affairs.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills and resolutions were referred to committees as indicated:
Appropriations: HB 2556.
Judiciary: HB 2555.
Taxation: HCR 5035.
CHANGE OF REFERENCE
Speaker pro tem Mays announced the withdrawal of HB 2491 from Committee on
Taxation and referral to Committee on Education.
Also, the withdrawal of HB 2146 from Committee on Calendar and Printing and referral
to Committee of the Whole.
COMMUNICATIONS FROM STATE OFFICERS
From Howard Schwartz, Judicial Administrator, Supreme Court of Kansas, pursuant to
K.S.A. 8-1008(e), Statement of Alcohol Drug Safety Action Program, 1998 Annual Report,
February 25, 1999.
The complete report is kept on file and open for inspection in the office of the Chief
Clerk.
INTRODUCTION OF ORIGINAL MOTIONS AND HOUSE RESOLUTIONS
On emergency motion of Rep. Phil Kline, HR 6013, by Reps. Phil Kline, Aday, Adkins,
Alldritt, Allen, Aurand, Ballard, Ballou, Barnes, Beggs, Benlon, Bethell, Boston, Burroughs,
Campbell, Carmody, Compton, Cox, Crow, Dahl, Dean, Dreher, Edmonds, Empson,
Faber, Farmer, Feuerborn, Findley, Flaharty, Flora, Flower, Franklin, Freeborn, Garner,
Gatewood, Geringer, Gilbert, Gilmore, Glasscock, Grant, Gregory, Haley, Hayzlett,
Helgerson, Henderson, Henry, Hermes, Holmes, Horst, Howell, Huff, Humerickhouse,
Hutchins, Jenkins, Jennison, Johnson, Johnston, Kirk, Klein, Phill Kline, Krehbiel, Kuether,
Landwehr, Lane, Larkin, Light, Lightner, Lloyd, M. Long, P. Long, Loyd, Mason, Mayans,
Mays, McClure, McCreary, McKechnie, McKinney, Minor, Mollenkamp, Morrison, Myers,
Neufeld, Nichols, O'Brien, O'Connor, O'Neal, Osborne, Palmer, Pauls, E. Peterson, J.
Peterson, Phelps, Pottorff, Powell, Powers, Ray, Reardon, Rehorn, Reinhardt, Ruff,
Schwartz, Sharp, Showalter, Shriver, Shultz, Sloan, Spangler, Stone, Storm, Swenson,
Tanner, Tedder, Thimesch, Toelkes, Tomlinson, Toplikar, Vickrey, Vining, Wagle, Weber,
Weiland, Wells, Welshimer and Wilk, as follows, was introduced and adopted:
A RESOLUTION congratulating and commending Colonel Lonnie R. McCollum.
WHEREAS, On March 19, 1999, Colonel Lonnie R. McCollum will retire from the
Kansas Highway Patrol; and
WHEREAS, He has served the citizens of the state of Kansas for 31 years in various
capacities from Trooper to Superintendent; and
WHEREAS, He began his career with the Kansas Highway Patrol in November 1968
when he was assigned to Hays as a field trooper. In May 1979 he was promoted to Aircraft
Trooper, remaining in Hays. In June 1985 he was promoted to Sergeant and transferred to
the Kansas Highway Patrol Training Center in Salina; in May 1987 he was promoted to the
rank of Lieutenant and assumed responsibility for the Breath Control Unit; and in December
1992 he was appointed as Superintendent of the Kansas Highway Patrol; and
WHEREAS, During the leadership tenure of Colonel Lonnie R. McCollum, the Kansas
Highway Patrol was elevated to national recognition and became the standard by which
other state police agencies were judged; and
WHEREAS, His leadership in the field of criminal interdiction consistently placed the
Kansas Highway Patrol among the top 10 nationwide in drug and contraband seizure; and
WHEREAS, During his tenure he was responsible for the following highly successful
programs initiated by the Kansas Highway Patrol:
Defining the agency mission and goals statement
Honor guard detail
Voluntary transfer program
Peer support program
Motorist assistance program
Special response team
Fleet vehicle program
Critical highway accident response team
Expansion of the canine unit
State of the art advancement in equipment
Mobile command post
Acquisition of retired Army helicopters for expanded flight operations
capabilities; and
WHEREAS, Colonel Lonnie R. McCollum has dedicated 31 years of outstanding service
to the citizens of the great state of Kansas, and as such, has made Kansas a safer place for
all: Now, therefore,
Be it resolved by the House of Representatives of the State of Kansas: That we
congratulate and commend Colonel Lonnie R. McCollum upon his retirement as
Superintendent of the Kansas Highway Patrol and for having given 31 years of service to
the citizens of the State of Kansas; and
Be it further resolved: That the Chief Clerk of the House of Representatives be directed
to provide an enrolled copy of this resolution to Colonel Lonnie R. McCollum,
Superintendent, Kansas Highway Patrol, 122 W. 7th, Topeka, Kansas 66603.
Rep. Phil Kline introduced Colonel Lonnie R. McCollum, Superintendent of the Kansas
Highway Patrol, who will retire on March 19. Colonel McCollum addressed a few remarks
to the members of the House. Rep. Kline presented him with an enrolled copy of the
resolution. Rep. Kline also recognized Mrs. McCollum who accompanied him on the House
floor, and also their children who were seated in the east gallery.
FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS HB 2048, An act relating to taxation; amending K.S.A. 12-189a, 79-2959 and K.S.A. 1998
Supp. 79-2964, 79-34,147, 79-3603 and 79-3703 and repealing the existing sections, was
considered on final action.
On roll call, the vote was: Yeas 92; Nays 32; Present but not voting: 0; Absent or not
voting: 1.
EXPLANATION OF VOTE
Mr. Speaker: I vote ``No'' on HB 2048. I was a co-sponsor of the bill as originally
introduced. I strongly support providing a sales tax exemption for sales of materials relating
to property damaged or destroyed as a result of a natural disaster. I cannot, however, support
the amendment added to the bill on the floor that reduces the sales tax on food. I support,
instead, targeted tax relief in the form of the food sales tax rebate program.--Michael R.
``Mike'' O'Neal
On motion of Rep. Glasscock, the House went into Committee of the Whole, with Rep.
Minor in the chair.
COMMITTEE OF THE WHOLE
On motion of Rep. Minor, Committee of the Whole report, as follows, was adopted:
Recommended that SB 120 be passed.
Committee report to HB 2166 be adopted; also, on motion of Rep. Mason be amended
on page 7, in line 9, by striking ``scheduled maturity'' and inserting in lieu thereof ``issuance'';
Also, on further motion of Rep. Mason HB 2166 be amended on page 5, in line 33, by
striking ``and''; in line 34, after the stricken material, by inserting ``is located outside of the
city limits of any city at the time of such finding; and (iv)''; after line 39, by inserting an
additional section as follows:
``Sec. 3. K.S.A. 1998 Supp. 74-8904 is hereby amended to read as follows: 74-8904.
Except as otherwise limited by this act, the authority shall have the following powers to:
(a) Sue and be sued;
(b) have a seal and alter such seal;
(c) make and alter bylaws for its organization and internal management;
(d) adopt such rules and regulations as may be necessary to carry out the purposes of
this act;
(e) acquire, hold and dispose of real and personal property for its corporate purposes;
(f) appoint officers, agents and employees, prescribe their duties and qualifications and
fix their compensation;
(g) borrow money and to issue notes, bonds and other obligations pursuant to K.S.A.
74-8905, and amendments thereto, whether or not the interest on which is subject to federal
income taxation, and to provide for the rights of the lenders or holders thereof;
(h) purchase notes or participations in notes evidencing loans which are secured by
mortgages or security interests and to enter into contracts in that regard;
(i) make secured or unsecured loans for any of the purposes for which bonds of the
authority may be issued under this act or to low and moderate income multifamily rental
housing projects participating in programs established in section 42 of the federal internal
revenue code, and provide financing for housing projects and programs in participation with
programs established by the United States department of housing and urban development
or the Kansas department of commerce and housing; except as otherwise provided in this
subsection, nothing in this act shall be construed to authorize the authority to make loans
directly to individuals to finance housing developments;
(j) sell mortgages and security interests at public or private sale, to negotiate
modifications or alterations in mortgage and security interests, to foreclose on any mortgage
or security interest in default or commence any action to protect or enforce any right
conferred upon it by any law, mortgage, security agreement, contract or other agreement,
and to bid for and purchase property which was the subject of such mortgage or security
interest at any foreclosure or at any other sale, to acquire or take possession of any such
property, and to exercise any and all rights as provided by law for the benefit or protection
of the authority or mortgage holders;
(k) collect fees and charges in connection with its loans, bond guarantees, commitments
and servicing, including, but not limited to, reimbursement of costs of financing as the
authority shall determine to be reasonable and as shall be approved by the authority;
(l) make and execute contracts for the servicing of mortgages acquired by the authority
pursuant to this act, and to pay the reasonable value of services rendered to the authority
pursuant to those contracts;
(m) enter into agreements with and accept gifts, grants, loans and other aid from the
federal government, the state, any state agency, any political subdivision of the state, or any
person or corporation, foundation or legal entity, and to agree to and comply with any
conditions attached to federal and state financial assistance not inconsistent with the
provisions of this act;
(n) invest moneys of the authority not required for immediate use, including proceeds
from the sale of any bonds, in such manner as the board shall determine, subject to any
agreement with bondholders stated in the authorizing resolution providing for the issuance
of bonds;
(o) procure insurance against any loss in connection with its programs, property and
other assets;
(p) provide technical assistance and advice to the state or political subdivisions of the
state and to enter into contracts with the state or political subdivisions of the state to provide
such services. The state or political subdivisions of the state are hereby authorized to enter
into contracts with the authority for such services and to pay for such services as may be
provided them;
(q) establish accounts in one or more depositories;
(r) lease, acquire, construct, sell and otherwise deal in and contract concerning any
facilities;
(s) have and exercise all of the powers granted to the public housing authorities by the
state, except that the authority shall not have the power of eminent domain;
(t) do any and all things necessary or convenient to carry out purposes of the authority
and exercise the powers given and granted in this act;
(u) assist minority businesses in obtaining loans or other means of financial assistance.
The terms and conditions of such loans or financial assistance, including the charges for
interest and other services, will be consistent with the provisions of this act. In order to
comply with this requirement, efforts must be made to solicit for review and analysis
proposed minority business ventures. Basic loan underwriting standards will not be waived
to inconsistently favor minority persons or businesses from the intent of the authority's
lending practices; and
(v) form one or more subsidiary corporations under K.S.A. 17-6001 et seq., and
amendments thereto, in accordance with the procedures therein contained. Each subsidiary
corporation shall be subject to the same restrictions and limitations as to the powers and
purposes to which the authority is subject. The authority may delegate any of its powers,
obligations and duties to any subsidiary corporation by inclusion of such powers, obligations
and duties in the articles of incorporation of the subsidiary corporation. Subsidiary
corporations so formed shall constitute legal entities separate and distinct from each other,
the authority and the state. The authority shall not be liable for the debts or obligations or
for any actions or inactions of its subsidiary corporations unless the authority expressly agrees
otherwise in writing. The authority may make loans or grants to a subsidiary corporation
from time to time to enable the subsidiary corporation to carry out its purposes. The
members of the authority shall constitute all of the directors of each subsidiary corporation.
The state, any municipality or any state commission, public authority, agency, officer,
department, board or division authorized and empowered to enter into agreements with, to
grant, convey, lease or otherwise transfer any property to, or to otherwise transact business
with the authority, shall have the same authorization and power to engage in these activities
with each subsidiary corporation of the authority.
One or more such subsidiary corporation may be formed for purposes of establishing
state tax credit equity funds to assist in the development of low-income and middle-income
housing and obtain financing through participation in the program established in section 42
of the federal internal revenue code.
Actions of the authority or any subsidiary corporation relating to housing pursuant to this
subsection (v) shall be carried out in accordance with any terms, conditions and limitations
relating to policy issues regarding housing, as established by the secretary of commerce and
housing.
One or more such subsidiary corporations may be formed for purposes of acquiring or conveying on behalf of the state and pursuant to this act a project of statewide as well as local importance, issuing bonds on behalf of the state pursuant to this act to finance a project of statewide as well as local importance or otherwise financing on behalf of the state pursuant to this act a project of statewide as well as local importance.'';
By renumbering remaining sections accordingly;
On page 15, after ``74-8902a,'', by inserting ``74-8904,'';
In the title, in line 11, after ``74-8902,'' by inserting ``74-8904,'';
Also, on motion of Rep. Ballou HB 2166 be amended on page 8, in line 20, before the
period by inserting ``, other than the property tax levied pursuant to the provisions of K.S.A.
1998 Supp. 72-6431, and amendments thereto'';
Also, on further motion of Rep. Ballou HB 2166 be amended on page 7, after line 25,
by inserting an additional section as follows:
``Sec. 4. K.S.A. 1998 Supp. 74-8922 is hereby amended to read as follows: 74-8922. (a)
If the developer proposes to undertake a project of statewide as well as local importance
within a redevelopment district established pursuant to K.S.A. 1998 Supp. 74-8921, and
amendments thereto, the developer shall prepare a redevelopment plan. The redevelopment
plan shall include:
(1) A summary of the feasibility study required by K.S.A. 1998 Supp. 74-8921, and
amendments thereto;
(2) a reference to the redevelopment district established under K.S.A. 1998 Supp. 74-
8921 and amendments thereto;
(3) a comprehensive description of the project of statewide as well as local importance;
(4) a description and map of the area to be redeveloped;
(5) a detailed description of the buildings and facilities proposed to be constructed or
improved in such area; and
(6) any other information the authority deems necessary to advise the public of the
intent of the plan.
(b) A copy of the proposed redevelopment plan shall be delivered by the developer to
the authority, the secretary of commerce and housing and the board of county
commissioners of the county in which the redevelopment district is located, and the board
of county commissioners shall determine, within 30 days after receipt of the plan, whether
the plan as proposed is consistent with the comprehensive general plan for the development
of the area. If the proposed redevelopment plan is not consistent with the comprehensive
general plan, the board of county commissioners shall provide its comments and objections
to the authority, which shall modify, approve or deny the plan. If the redevelopment plan
is consistent with the comprehensive general plan of the county, then the authority may
adopt the redevelopment plan by a resolution passed by a majority of the board of directors
of the authority. Any substantial changes to the plan as adopted shall be made in the same
manner, with notice and approval of the board of county commissioners and adoption of a
resolution by the authority. A redevelopment plan may be adopted by the authority, pursuant
to these procedures, at the same time that the authority establishes the redevelopment
district under K.S.A. 1998 Supp. 74-8921, and amendments thereto.
(c) Under no circumstances shall the state of Kansas, any of its political subdivisions,
the Kansas development finance authority or any unit of local government assume
responsibility or otherwise be responsible for any environmental remediation which may be
required to be performed within the redevelopment district designated through any
redevelopment plan. Any person or entity who proposes to take legal title from the state or any subsidiary instrumentality of the state to land which is located at a site designated as a federal enclave prior to January 1, 1998, for the purpose of developing a project of state- wide as well as local importance shall, prior to taking such title, agree to be responsible for the remediation of all environmental contamination on the federal enclave and provide prepaid third-party financial guarantees to the state or subsidiary instrumentality thereof of its ability to complete such remediation.'';
By renumbering remaining sections accordingly;
On page 15, in line 27, after ``74-8921,'', by inserting ``74-8922,'';
In the title, in line 11, after ``74-8921,'', by inserting ``74-8922,'';
Also, on motion of Rep. Burroughs to amend HB 2166, Rep. Benlon requested the
question be divided. Rep. Benlon subsequently withdrew the request, and the question
reverted back to the motion of Rep. Burroughs to amend on page 7, after line 25, by inserting
an additional section as follows:
``Sec. 4. K.S.A. 1998 Supp. 74-8922 is hereby amended to read as follows: 74-8922. (a)
If the developer proposes to undertake a project of statewide as well as local importance
within a redevelopment district established pursuant to K.S.A. 1998 Supp. 74-8921, and
amendments thereto, the developer shall prepare a redevelopment plan. The redevelopment
plan shall include:
(1) A summary of the feasibility study required by K.S.A. 1998 Supp. 74-8921, and
amendments thereto;
(2) a reference to the redevelopment district established under K.S.A. 1998 Supp. 74-
8921;
(3) a comprehensive description of the project of statewide as well as local importance;
(4) a description and map of the area to be redeveloped;
(5) a detailed description of the buildings and facilities proposed to be constructed or
improved in such area; and
(6) any other information the authority deems necessary to advise the public of the
intent of the plan.
(b) A copy of the proposed redevelopment plan shall be delivered by the developer to
the authority, the secretary of commerce and housing and the board of county
commissioners of the county in which the redevelopment district is located, and the board
of county commissioners shall determine, within 30 days after receipt of the plan, whether
the plan as proposed is consistent with the comprehensive general plan for the development
of the area. If the proposed redevelopment plan is not consistent with the comprehensive
general plan, the board of county commissioners shall provide its comments and objections
to the authority, which shall modify, approve or deny the plan. If the redevelopment plan
is consistent with the comprehensive general plan of the county, then the authority may
adopt the redevelopment plan by a resolution passed by a majority of the board of directors
of the authority. Any substantial changes to the plan as adopted shall be made in the same
manner, with notice and approval of the board of county commissioners and adoption of a
resolution by the authority. A redevelopment plan may be adopted by the authority, pursuant
to these procedures, at the same time that the authority establishes the redevelopment
district under K.S.A. 1998 Supp. 74-8921, and amendments thereto. Any redevelopment plan which proposes to undertake a project of statewide as well as local importance in a county which according to the 1990 decennial census contained a population greater than 25,000 shall be adopted prior to July 1, 2001.
(c) Under no circumstances shall the state of Kansas, any of its political subdivisions,
the Kansas development finance authority or any unit of local government assume
responsibility or otherwise be responsible for any environmental remediation which may be
required to be performed within the redevelopment district designated through any
redevelopment plan.'';
By renumbering the existing sections;
On page 15, in line 27, after ``74-8921,'' by inserting ``74-8922,'';
In the title, in line 11, after ``74-8921,'' by inserting ``74-8922,'';
Roll call was demanded.
On roll call, the vote was: Yeas 60; Nays 59; Present but not voting: 0; Absent or not
voting: 6.
Absent or not voting: Adkins, Johnston, Mayans, Palmer, Sharp, Wells.
The motion of Rep. Burroughs prevailed.
Also, on motion of Rep. E. Peterson to amend HB 2166, Rep. Campbell requested a
ruling on the amendment being germane to the bill. The Rules Chair ruled the amendment
not germane; and the bill be passed as amended.
Committee report recommending a substitute bill to Sub. HB 2322 be adopted; and the
substitute bill be passed.
REPORTS OF STANDING COMMITTEES
The Committee on Environment recommends SB 70 be amended by substituting a new
bill to be designated as ``House Substitute for SENATE BILL No. 70,'' as follows:
``HOUSE Substitute for SENATE BILL No. 70
By Committee on Environment
AN ACT concerning big game; eliminating certain fees; relating to big game control
permits; amending K.S.A. 1998 Supp. 32-937 and 32-988 and repealing the existing
sections.'';
and the substitute bill be passed.
(H. Sub. for SB 70 was thereupon introduced and read by title.)
The Committee on Governmental Organization and Elections recommends HB 2077, as amended by House Committee, be amended by substituting a new bill to be
designated as ``Substitute for HOUSE BILL No. 2077,'' as follows:
``Substitute for HOUSE BILL No. 2077
By Committee on Governmental Organization and Elections
``AN ACT abolishing the department of health and environment; abolishing the division of
health and the division of environment; creating the department of health and the
department of environment; providing for the powers, duties and functions thereof; also
repealing K.S.A. 75-5601, 75-5602, 75-5603, 75-5604, 75-5605, 75-5606, 75-5607, 75-
5608, 75-5609, 75-5610, 75-5610a, 75-5611, 75-5611a, 75-5612, 75-5613, 75-5616, 75-
5617, 75-5618, 75-5619, 75-5620, 75-5621, 75-5622, 75-5623, 75-5624, 75-5625, section
30 of this act and K.S.A. 1998 Supp. 74-72,102.'';
and the substitute bill be passed.
(Sub. HB 2077 was thereupon introduced and read by title.)
The Committee on Taxation recommends HB 2226, 2549 be passed.
The Committee on Taxation recommends HB 2543 be amended in line 19, before the
period by inserting ``, or a natural gas lease the average daily production per well from which
is 90 mcf or less''; in line 32, after the period by inserting ``As an alternative method of
claiming the credit, operators of oil and gas wells may apply for a refund of the property
taxes paid on the lease directly to the Kansas department of revenue on forms prescribed
by the department.''; after line 32, by inserting the following:
``Sec. 2. K.S.A. 1998 Supp. 79-201w is hereby amended to read as follows: 79-201w.
The following described property, to the extent specified by this section, shall be exempt
from all property or ad valorem taxes levied under the laws of the state of Kansas:
(a) Any item of machinery, equipment, materials and supplies which, except for the
operation of the provisions of this section, would be required to be listed for the purpose
of taxation pursuant to K.S.A. 79-306, and amendments thereto, and which is used or to be
used in the conduct of the owner's business, or in the conduct of activities by an entity not
subject to Kansas income taxation pursuant to K.S.A. 79-32,113, and amendments thereto,
whose original retail cost when new is $250$500 or less.
(b) The provisions of this section shall apply to all taxable years commencing after
December 31, 19951999.
Sec. 3. K.S.A. 1998 Supp. 79-32,206 is hereby amended to read as follows: 79-32,206.
For all taxable years commencing after December 31, 1997, there shall be allowed as a
credit against the tax liability of a taxpayer imposed under the Kansas income tax act, the
premiums tax upon insurance companies imposed pursuant to K.S.A. 40-252, and
amendments thereto, and the privilege tax as measured by net income of financial
institutions imposed pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated,
an amount equal to 15% of the property tax levied for property tax year 1998, and 20% of the property tax levied for property tax year 1999, and all such years thereafter, actually
and timely paid during an income, premiums or privilege taxable year upon commercial and
industrial machinery and equipment classified for property taxation purposes pursuant to
section 1 of article 11 of the Kansas constitution in subclass (5) or (6) of class 2 and machinery
and equipment classified for such purposes in subclass (2) of class 2. For all taxable years commencing after December 31, 1997, and if the amount of such tax credit exceeds the
taxpayer's income tax, premiums tax or privilege tax liability for the taxable year, the amount
thereof which exceeds such tax liability shall be refunded to the taxpayer. If the taxpayer is
a corporation having an election in effect under subchapter S of the federal internal revenue
code, a partnership or a limited liability company, the credit provided by this section shall
be claimed by the shareholders of such corporation, the partners of such partnership or the
members of such limited liability company in the same manner as such shareholders,
partners or members account for their proportionate shares of the income or loss of the
corporation, partnership or limited liability company.
Sec. 4. On and after July 1, 1999, K.S.A. 1998 Supp. 79-3602 is hereby amended to
read as follows: 79-3602. (a) ``Persons'' means any individual, firm, copartnership, joint
adventure, association, corporation, estate or trust, receiver or trustee, or any group or
combination acting as a unit, and the plural as well as the singular number; and shall
specifically mean any city or other political subdivision of the state of Kansas engaging in a
business or providing a service specifically taxable under the provisions of this act.
(b) ``Director'' means the state director of taxation.
(c) ``Sale'' or ``sales'' means the exchange of tangible personal property, as well as the
sale thereof for money, and every transaction, conditional or otherwise, for a consideration,
constituting a sale, including the sale or furnishing of electrical energy, gas, water, services
or entertainment taxable under the terms of this act and including, except as provided in
the following provision, the sale of the use of tangible personal property by way of a lease,
license to use or the rental thereof regardless of the method by which the title, possession
or right to use the tangible personal property is transferred. The term ``sale'' or ``sales'' shall
not mean the sale of the use of any tangible personal property used as a dwelling by way of
a lease or rental thereof for a term of more than 28 consecutive days.
(d) ``Retailer'' means a person regularly engaged in the business of selling tangible
personal property at retail or furnishing electrical energy, gas, water, services or
entertainment, and selling only to the user or consumer and not for resale.
(e) ``Retail sale'' or ``sale at retail'' means all sales made within the state of tangible
personal property or electrical energy, gas, water, services or entertainment for use or
consumption and not for resale.
(f) ``Tangible personal property'' means corporeal personal property. Such term shall
include;: (1) Any computer software program which is not a custom computer software
program, as described by subsection (s) of K.S.A. 79-3603, and amendments thereto; and
(2) andany prepaid telephone calling card or prepaid authorization number, or recharge of
such card or number, as described by subsection (b) of K.S.A. 79-3603, and amendments
thereto.
(g) ``Selling price'' means the total cost to the consumer exclusive of discounts allowed
and credited, but including freight and transportation charges from retailer to consumer.
(h) ``Gross receipts'' means the total selling price or the amount received as defined in
this act, in money, credits, property or other consideration valued in money from sales at
retail within this state; and embraced within the provisions of this act. The taxpayer, may
take credit in the report of gross receipts for: (1) An amount equal to the selling price of
property returned by the purchaser when the full sale price thereof, including the tax
collected, is refunded in cash or by credit; and (2) an amount equal to the allowance given
for the trade-in of property.
(i) ``Taxpayer'' means any person obligated to account to the director for taxes collected
under the terms of this act.
(j) ``Isolated or occasional sale'' means the nonrecurring sale of tangible personal
property, or services taxable hereunder by a person not engaged at the time of such sale in
the business of selling such property or services. Any religious organization which makes a
nonrecurring sale of tangible personal property acquired for the purpose of resale shall be
deemed to be not engaged at the time of such sale in the business of selling such property.
Such term shall include: (1) Any sale by a bank, savings and loan institution, credit union
or any finance company licensed under the provisions of the Kansas uniform consumer
credit code of tangible personal property which has been repossessed by any such entity;
and (2) any sale of tangible personal property made by an auctioneer or agent on behalf of
not more than two principals or households if such sale is nonrecurring and any such
principal or household is not engaged at the time of such sale in the business of selling
tangible personal property.
(k) ``Service'' means those services described in and taxed under the provisions of K.S.A.
79-3603 and amendments thereto.
(l) ``Ingredient or component part'' means tangible personal property which is necessary
or essential to, and which is actually used in and becomes an integral and material part of
tangible personal property or services produced, manufactured or compounded for sale by
the producer, manufacturer or compounder in its regular course of business. The following
items of tangible personal property are hereby declared to be ingredients or component
parts, but the listing of such property shall not be deemed to be exclusive nor shall such
listing be construed to be a restriction upon, or an indication of, the type or types of property
to be included within the definition of ``ingredient or component part'' as herein set forth:
(1) Containers, labels and shipping cases used in the distribution of property produced,
manufactured or compounded for sale which are not to be returned to the producer,
manufacturer or compounder for reuse.
(2) Containers, labels, shipping cases, paper bags, drinking straws, paper plates, paper
cups, twine and wrapping paper used in the distribution and sale of property taxable under
the provisions of this act by wholesalers and retailers and which is not to be returned to
such wholesaler or retailer for reuse.
(3) Seeds and seedlings for the production of plants and plant products produced for
resale.
(4) Paper and ink used in the publication of newspapers.
(5) Fertilizer used in the production of plants and plant products produced for resale.
(6) Feed for 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, fur, or the production of offspring for use for any
such purpose or purposes.
(m) ``Property which is consumed'' means tangible personal property which is essential
or necessary to and which is used in the actual process of and immediately consumed, depleted or dissipated within one year in (1) the production, manufacture, processing,
mining, drilling, refining or compounding of tangible personal property, (2) the providing
of services or, (3) the irrigation of crops, for sale in the regular course of business, or (4) the storage or processing of grain by a public grain warehouse or other grain storage facility,
and which is not reusable for such purpose. The following items of tangible personal property are hereby declared to be ``consumed'' but the listing of such property shall not be deemed to be exclusive nor shall such listing be construed to be a restriction upon or an indication of, the type or types of property to be included within the definition of ``property which is consumed'' as herein set forthis a listing of tangible personal property, included by way of illustration but not of limitation, which qualifies as property which is consumed:
(A) Insecticides, herbicides, germicides, pesticides, fungicides, fumigants, antibiotics,
biologicals, pharmaceuticals, vitamins and chemicals for use in commercial or agricultural
production, processing or storage of fruit, vegetables, feeds, seeds, grains, animals or animal
products whether fed, injected, applied, combined with or otherwise used; and
(B) electricity, gas and water; and
(C) petroleum products, lubricants, chemicals, solvents, reagents and catalysts.
(n) ``Political subdivision'' means any municipality, agency or subdivision of the state
which is, or shall hereafter be, authorized to levy taxes upon tangible property within the
state or which certifies a levy to a municipality, agency or subdivision of the state which is,
or shall hereafter be, authorized to levy taxes upon tangible property within the state. Such
term also shall include any public building commission, housing, airport, port, metropolitan
transit or similar authority established pursuant to law.
(o) ``Municipal corporation'' means any city incorporated under the laws of Kansas.
(p) ``Quasi-municipal corporation'' means any county, township, school district, drainage
district or any other governmental subdivision in the state of Kansas having authority to
receive or hold moneys or funds.
(q) ``Nonprofit blood bank'' means any nonprofit place, organization, institution or
establishment that is operated wholly or in part for the purpose of obtaining, storing,
processing, preparing for transfusing, furnishing, donating or distributing human blood or
parts or fractions of single blood units or products derived from single blood units, whether
or not any remuneration is paid therefor, or whether such procedures are done for direct
therapeutic use or for storage for future use of such products.
(r) ``Contractor, subcontractor or repairman'' means a person who agrees to furnish and
install tangible personal property or install tangible personal property at a specified price.
A person who maintains an inventory of tangible personal property which enables such
person to furnish and install the tangible personal property or install the tangible personal
property shall not be deemed a contractor, subcontractor or repairman but shall be deemed
a retailer.
(s) ``Educational institution'' means any nonprofit school, college and university that
offers education at a level above the twelfth grade, and conducts regular classes and courses
of study required for accreditation by, or membership in, the North Central Association of
Colleges and Schools, the state board of education, or that otherwise qualify as an
``educational institution,'' as defined by K.S.A. 74-50,103, and amendments thereto. Such
phrase shall include: (1) A group of educational institutions that operates exclusively for an
educational purpose; (2) nonprofit endowment associations and foundations organized and
operated exclusively to receive, hold, invest and administer moneys and property as a
permanent fund for the support and sole benefit of an educational institution; (3) nonprofit
trusts, foundations and other entities organized and operated principally to hold and own
receipts from intercollegiate sporting events and to disburse such receipts, as well as grants
and gifts, in the interest of collegiate and intercollegiate athletic programs for the support
and sole benefit of an educational institution; and (4) nonprofit trusts, foundations and other
entities organized and operated for the primary purpose of encouraging, fostering and
conducting scholarly investigations and industrial and other types of research for the support
and sole benefit of an educational institution.
Sec. 5. On and after July 1, 1999, K.S.A. 1998 Supp. 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, motor vehicles taxed pursuant to K.S.A. 79-5117, and
amendments thereto, tires taxed pursuant to K.S.A. 1998 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-
34,150, 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
subdivision 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, 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
secondary 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,
construction, repair, enlargement or equipment of buildings used primarily for human
habitation;
(d) 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 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, furnishing or remodeling facilities for any political
subdivision of the state. As used in this subsection, K.S.A. 12-3418 and 79-3640, and
amendments thereto, ``funds of a political subdivision'' shall mean general tax revenues, the
proceeds of any bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
purpose of constructing, equipping, reconstructing, repairing, enlarging, furnishing or
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 facilities, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the contractor may
purchase materials for 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 contractor 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 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.
If any materials purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials which will not be so incorporated
in the building or other project reported and paid by such contractor to the director of
taxation not later than the 20th day of the month following the close of the month in which
it shall be determined that such materials will not be used for the purpose for which such
certificate was issued, the political subdivision, hospital 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 imposed upon such materials, shall be
guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties
provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the
government 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 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 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
remanufacture, modification and repair of aircraft sold to persons using directly or through
an authorized agent 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
transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of such meals to
employees 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
provisions 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,
manufacturer 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,
manufacture, processing, mining, drilling, refining or compounding of tangible personal
property, 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
subsection, 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
accessories 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
maintenance 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
machinery 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,
maintaining, 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
transmission 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
manufactured 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, and all sales of tangible personal property by
or on behalf of any 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 distribution facility, and all sales of repair and replacement parts and accessories purchased for such machinery and equipment:
(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 equipment is used during a manufacturing, assembling, processing or finishing, storing, warehousing 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 primarily'' shall include, but not be limited to:
(A) Mechanical machines or 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 machinery 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 equipment 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;
(4) for purposes of this subsection, ``repair and replacement parts and accessories'' means all parts and accessories for exempt machinery and equipment, including but not limited to dies, jigs, molds, and patterns which are attached to exempt machinery or which are otherwise used in production, short-lived replaceable parts that can be readily detached from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars and saws, and other replacement parts for production equipment, including refractory brick and other refractory items for kiln equipment used in production operations
(1) (A) all sales of machinery and equipment which are used in this state as an integral or essential part of an integrated production operation by a manufacturing or processing plant or facility;
(B) all sales of installation, repair and maintenance services performed on such machinery and equipment; and
(C) all sales of repair and replacement parts and accessories purchased for such machinery and equipment.
(2) For purposes of this subsection:
(A) ``Integrated production operation'' means an integrated series of operations engaged in at a manufacturing or processing plant or facility to process, transform or convert tangible personal property by physical, chemical or other means into a different form, composition or character from that in which it originally existed. Integrated production operations shall include: (i) Production line operations, including packaging operations; (ii) preproduction operations to handle, store and treat raw materials; (iii) post production handling, storage, warehousing and distribution operations; and (iv) waste, pollution and environmental control operations, if any;
(B) ``production line'' means the assemblage of machinery and equipment at a manufacturing or processing plant or facility where the actual transformation or processing of tangible personal property occurs;
(C) ``manufacturing or processing plant or facility'' means a single, fixed location owned or controlled by a manufacturing or processing business that consists of one or more structures or buildings in a contiguous area where integrated production operations are conducted to manufacture or process tangible personal property to be ultimately sold at retail. A business may operate one or more manufacturing or processing plants or facilities at different locations to manufacture or process a single product of tangible personal property to be ultimately sold at retail;
(D) ``manufacturing or processing business'' means a business that utilizes an integrated production operation to manufacture, process, fabricate, finish, or assemble items for wholesale and retail distribution as part of what is commonly regarded by the general public as an industrial manufacturing or processing operation or an agricultural commodity processing operation. (i) Industrial manufacturing or processing operations include, by way of illustration but not of limitation, the fabrication of automobiles, airplanes, machinery or transportation equipment, the fabrication of metal, plastic, wood, or paper products, electricity power generation, water treatment, petroleum refining, chemical production, wholesale bottling, newspaper printing, ready mixed concrete production, and the remanufacturing of used parts for wholesale or retail sale. Such processing operations shall include operations at an oil well, gas well, mine or other excavation site where the oil, gas, minerals, coal, clay, stone, sand or gravel that has been extracted from the earth is cleaned, separated, crushed, ground, milled, screened, washed, or otherwise treated or prepared before its transmission to a refinery or before any other wholesale or retail distribution. (ii) Agricultural commodity processing operations include, by way of illustration but not of limitation, meat packing, poultry slaughtering and dressing, processing and packaging farm and dairy products in sealed containers for wholesale and retail distribution, feed grinding, grain milling, frozen food processing, and grain handling, cleaning, blending, fumigation, drying and aeration operations engaged in by grain elevators or other grain storage facilities. (iii) Manufacturing or processing businesses do not include, by way of illustration but not of limitation, nonindustrial businesses whose operations are primarily retail and that produce or process tangible personal property as an incidental part of conducting the retail business, such as retailers who bake, cook or prepare food products in the regular course of their retail trade, grocery stores, meat lockers and meat markets that butcher or dress livestock or poultry in the regular course of their retail trade, contractors who alter, service, repair or improve real property, and retail businesses that clean, service or refurbish and repair tangible personal property for its owner;
(E) ``repair and replacement parts and accessories'' means all parts and accessories for exempt machinery and equipment, including, but not limited to, dies, jigs, molds, patterns and safety devices that are attached to exempt machinery or that are otherwise used in production, and parts and accessories that require periodic replacement such as belts, drill bits, grinding wheels, grinding balls, cutting bars, saws, refractory brick and other refractory items for exempt kiln equipment used in production operations;
(F) ``primary'' or ``primarily'' mean more than 50% of the time.
(3) For purposes of this subsection, machinery and equipment shall be deemed to be used as an integral or essential part of an integrated production operation when used:
(A) To receive, transport, convey, handle, treat or store raw materials in preparation of its placement on the production line;
(B) to transport, convey, handle or store the property undergoing manufacturing or processing at any point from the beginning of the production line through any warehousing or distribution operation of the final product that occurs at the plant or facility;
(C) to act upon, effect, promote or otherwise facilitate a physical change to the property undergoing manufacturing or processing;
(D) to guide, control or direct the movement of property undergoing manufacturing or processing;
(E) to test or measure raw materials, the property undergoing manufacturing or processing or the finished product, as a necessary part of the manufacturer's integrated production operations;
(F) to plan, manage, control or record the receipt and flow of inventories of raw materials, consumables and component parts, the flow of the property undergoing manufacturing or processing and the management of inventories of the finished product;
(G) to produce energy for, lubricate, control the operating of or otherwise enable the functioning of other production machinery and equipment and the continuation of production operations;
(H) to package the property being manufactured or processed in a container or wrapping in which such property is normally sold or transported;
(I) to transmit or transport electricity, coke, gas, water, steam or similar substances used in production operations from the point of generation, if produced by the manufacturer or processor at the plant site, to that manufacturer's production operation; or, if purchased or delivered from offsite, from the point where the substance enters the site of the plant or facility to that manufacturer's production operations;
(J) to cool, heat, filter, refine or otherwise treat water, steam, acid, oil, solvents or other substances that are used in production operations;
(K) to provide and control an environment required to maintain certain levels of air quality, humidity or temperature in special and limited areas of the plant or facility, where such regulation of temperature or humidity is part of and essential to the production process;
(L) to treat, transport or store waste or other byproducts of production operations at the plant or facility; or
(M) to control pollution at the plant or facility where the pollution is produced by the manufacturing or processing operation.
(4) The following machinery, equipment and materials shall be deemed to be exempt even though it may not otherwise qualify as machinery and equipment used as an integral or essential part of an integrated production operation: (A) Computers and related peripheral equipment that are utilized by a manufacturing or processing business for engineering of the finished product or for research and development or product design; (B) machinery and equipment that is utilized by a manufacturing or processing business to manufacture or rebuild tangible personal property that is used in manufacturing or processing operations, including tools, dies, molds, forms and other parts of qualifying machinery and equipment; (C) oil and gas drilling services and supplies, and drilling, pumping and monitoring equipment, used at a well site or in oil and gas exploration; (D) portable plants for aggregate concrete, bulk cement and asphalt including mobile cement mixer trucks; (E) industrial fixtures, devices, support facilities and special foundations necessary for manufacturing and production operations, and materials and other tangible personal property sold for the purpose of fabricating such fixtures, devices, facilities and foundations. An exemption certificate for such purchases shall be signed by the manufacturer or processor. If the fabricator purchases such material, the fabricator shall also sign the exemption certificate; and (F) a manufacturing or processing business' laboratory equipment that is not located at the plant or facility, but that would otherwise qualify for exemption under subsection (3)(E).
(5) ``Machinery and equipment used as an integral or essential part of an integrated production operation'' shall not include:
(A) Machinery and equipment used for nonproduction purposes, including, but not limited to, machinery and equipment used for plant security, fire prevention, first aid, accounting, administration, record keeping, advertising, marketing, sales or other related activities, plant cleaning, plant communications, and employee work scheduling;
(B) machinery, equipment and tools used primarily in maintaining and repairing any type of machinery and equipment or the building and plant;
(C) transportation equipment not primarily used in a production, warehousing or material handling operation at the plant or facility;
(D) office machines and equipment including computers and related periheral equipment not used directly and primarily to control or measure the manufacturing process;
(E) furniture and other furnishings;
(F) buildings, other than exempt machinery and equipment that is permanently affixed to or becomes a physical part of the building, and any other part of real estate that is not otherwise exempt;
(G) building fixtures that are not integral to the manufacturing operation, such as utility systems for heating, ventilation, air conditioning, communications, plumbing or electrical;
(H) machinery and equipment used for general plant heating, cooling and lighting;
(I) motor vehicles that are registered for operation on public highways; or
(J) employee apparel, except safety and protective apparel that is purchased by an employer and furnished gratuitously to employees who are involved in production or research activities.
(6) Subsections (3) and (5) shall not be construed as exclusive listings of the machinery and equipment that qualify or do not qualify as an integral or essential part of an integrated production operation. When machinery or equipment is used as an integral or essential part of production operations part of the time and for nonproduction purpose at other times, the primary use of the machinery or equipment shall determine whether or not such machinery or equipment qualifies for exemption.
(7) The secretary of revenue shall adopt rules and regulations necessary to administer the provisions of this subsection;
(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
conducting programs for the improvement of public health;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides,
germicides, pesticides and fungicides; and services, purchased and used for the purpose of
producing 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
advertising 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 production of oil or gasmaterial handling equipment, racking systems and other related machinery and equipment that is used for the handling, movement or storage of tangible personal property in a warehouse or distribution facility in this state; all sales of installation, repair and maintenance services performed on such machinery and equipment; and all sales of repair and replacement parts for such machinery and equipment. For purposes of this subsection, a warehouse or distribution facility means a single, fixed location that consists of buildings or structures in a contiguous area where storage or distribution operations are conducted that are separate and apart from the business' retail operations, if any, and which do not otherwise qualify for exemption as occurring at a manufacturing or processing plant or facility. Material handling and storage equipment shall include aeration, dust control, cleaning, handling and other such equipment that is used in a public grain warehouse or other grain storage facility, whether used for grain handling, grain storage, grain refining or processing, or other grain treatment operation;
(qq) all sales of tangible personal property and services purchased by a nonprofit
museum 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
federal 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
broadcasting 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
organizations 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
services 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
persons 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
eliminating diabetes through medical research, public education focusing on disease
prevention and education, patient education including information on coping with diabetes,
and professional 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
Alzheimer's disease, and their families and caregivers; and
(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such
organization.;
(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501 (c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 50501 (c)(3) of the federal internal revenue
code of 1986 contracted with to operate such zoo 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
nonprofit zoo which would be exempt from taxation under the provisions of this section if
purchased directly by such nonprofit zoo or the entity operating such zoo. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery,
equipment or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any nonprofit zoo. When any
nonprofit zoo shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the
state and furnish to the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for 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 contractor shall furnish to the nonprofit zoo
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. All invoices shall be
held by the contractor for a period of five years and shall be subject to audit by the director
of taxation. If any materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials which will not be so
incorporated in the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the close of the month
in which it shall be determined that such materials will not be used for the purpose for
which such certificate was issued, the nonprofit zoo 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 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;
(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property by or on behalf of
such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air, free access radio
or television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by a religious
organization which is exempt from federal income taxation pursuant to section 501 (c)(3)
of the federal internal revenue code, and used exclusively for religious purposes; and
(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof.
Sec. 6. K.S.A. 1998 Supp. 79-4217 is hereby amended to read as follows: 79-4217. (a)
There is hereby imposed an excise tax upon the severance and production of coal, oil or gas
from the earth or water in this state for sale, transport, storage, profit or commercial use,
subject to the following provisions of this section. Such tax shall be borne ratably by all
persons within the term ``producer'' as such term is defined in K.S.A. 79-4216, and
amendments thereto, in proportion to their respective beneficial interest in the coal, oil or
gas severed. Such tax shall be applied equally to all portions of the gross value of each barrel
of oil severed and subject to such tax and to the gross value of the gas severed and subject
to such tax. The rate of such tax shall be 8% of the gross value of all oil or gas severed from
the earth or water in this state and subject to the tax imposed under this act. The rate of
such tax with respect to coal shall be $1 per ton. For the purposes of the tax imposed
hereunder the amount of oil or gas produced shall be measured or determined: (1) In the
case of oil, by tank tables compiled to show 100% of the full capacity of tanks without
deduction for overage or losses in handling; allowance for any reasonable and bona fide
deduction for basic sediment and water, and for correction of temperature to 60 degrees
Fahrenheit will be allowed; and if the amount of oil severed has been measured or
determined by tank tables compiled to show less than 100% of the full capacity of tanks,
such amount shall be raised to a basis of 100% for the purpose of the tax imposed by this
act; and (2) in the case of gas, by meter readings showing 100% of the full volume expressed
in cubic feet at a standard base and flowing temperature of 60 degrees Fahrenheit, and at
the absolute pressure at which the gas is sold and purchased; correction to be made for
pressure according to Boyle's law, and used for specific gravity according to the gravity at
which the gas is sold and purchased, or if not so specified, according to the test made by
the balance method.
(b) The following shall be exempt from the tax imposed under this section:
(1) The severance and production of gas which is: (A) Injected into the earth for the
purpose of lifting oil, recycling or repressuring; (B) used for fuel in connection with the
operation and development for, or production of, oil or gas in the lease or production unit
where severed; (C) lawfully vented or flared; (D) severed from a well having an average
daily production during a calendar month having a gross value of not more than $87 per
day, which well has not been significantly curtailed by reason of mechanical failure or other
disruption of production; in the event that the production of gas from more than one well
is gauged by a common meter, eligibility for exemption hereunder shall be determined by
computing the gross value of the average daily combined production from all such wells and
dividing the same by the number of wells gauged by such meter; (E) inadvertently lost on
the lease or production unit by reason of leaks, blowouts or other accidental losses; (F) used
or consumed for domestic or agricultural purposes on the lease or production unit from
which it is severed; or (G) placed in underground storage for recovery at a later date and
which was either originally severed outside of the state of Kansas, or as to which the tax
levied pursuant to this act has been paid;
(2) the severance and production of oil which is: (A) From a lease or production unit
whose average daily production is five barrels or less per producing well, which well or wells
have not been significantly curtailed by reason of mechanical failure or other disruption of
production; (B) from a lease or production unit, the producing well or wells upon which
have a completion depth of 2,000 feet or more, and whose average daily production is six
barrels or less per producing well or, if the price of oil as determined pursuant to subsection
(d) is $16 or less, whose average daily production is seven barrels or less per producing well,
or, if the price of oil as determined pursuant to subsection (d) is $15 or less, whose average
daily production is eight barrels or less per producing well, or, if the price of oil as
determined pursuant to subsection (d) is $14 or less, whose average daily production is nine
barrels or less per producing well, or, if the price of oil as determined pursuant to subsection
(d) is $13 or less, whose average daily production is 10 barrels or less per producing well,
which well or wells have not been significantly curtailed by reason of mechanical failure or
other disruption of production; (C) from a lease or production unit, whose production results
from a tertiary recovery process. ``Tertiary recovery process'' means the process or processes
described in subparagraphs (1) through (9) of 10 C.F.R. 212.78(c) as in effect on June 1,
1979; (D) from a lease or production unit, the producing well or wells upon which have a
completion depth of less than 2,000 feet and whose average daily production resulting from
a water flood process, is six barrels or less per producing well, which well or wells have not
been significantly curtailed by reason of mechanical failure or other disruption of production;
(E) from a lease or production unit, the producing well or wells upon which have a
completion depth of 2,000 feet or more, and whose average daily production resulting from
a water flood process, is seven barrels or less per producing well or, if the price of oil as
determined pursuant to subsection (d) is $16 or less, whose average daily production is eight
barrels or less per producing well, or, if the price of oil as determined pursuant to subsection
(d) is $15 or less, whose average daily production is nine barrels or less per producing well,
or, if the price of oil as determined pursuant to subsection (d) is $14 or less, whose average
daily production is 10 barrels or less per producing well, which well or wells have not been
significantly curtailed by reason of mechanical failure or other disruption of production; (F)
test, frac or swab oil which is sold or exchanged for value; or (G) inadvertently lost on the
lease or production unit by reason of leaks or other accidental means;
(3) (A) any taxpayer applying for an exemption pursuant to subsection (b)(2)(A) and
(B) shall make application annually to the director of taxation therefor. Exemptions granted
pursuant to subsection (b)(2)(A) and (B) shall be valid for a period of one year following
the date of certification thereof by the director of taxation; (B) any taxpayer applying for an
exemption pursuant to subsection (b)(2)(D) or (E) shall make application annually to the
director of taxation therefor. Such application shall be accompanied by proof of the approval
of an application for the utilization of a water flood process therefor by the corporation
commission pursuant to rules and regulations adopted under the authority of K.S.A. 55-152
and amendments thereto and proof that the oil produced therefrom is kept in a separate
tank battery and that separate books and records are maintained therefor. Such exemption
shall be valid for a period of one year following the date of certification thereof by the
director of taxation; and (C) notwithstanding the provisions of paragraph (A) or (B), any
exemption in effect on the effective date of this act affected by the amendments to
subsection (b)(2) by this act shall be redetermined in accordance with such amendments.
Any such exemption, and any new exemption established by such amendments and applied
for after the effective date of this shall be valid for a period commencing with May 1, 1998,
and ending on April 30, 1999.
(4) the severance and production of gas or oil from any pool from which oil or gas was
first produced on or after April 1, 1983, as determined by the state corporation commission
and certified to the director of taxation, and continuing for a period of 24 months from the
month in which oil or gas was first produced from such pool as evidenced by an affidavit of
completion of a well, filed with the state corporation commission and certified to the director
of taxation. Exemptions granted for production from any well pursuant to this paragraph
shall be valid for a period of 24 months following the month in which oil or gas was first
produced from such pool. The term ``pool'' means an underground accumulation of oil or
gas in a single and separate natural reservoir characterized by a single pressure system so
that production from one part of the pool affects the reservoir pressure throughout its extent;
(5) the severance and production of oil or gas from a three-year inactive well, as
determined by the state corporation commission and certified to the director of taxation,
for a period of 10 years after the date of receipt of such certification. As used in this
paragraph, ``three-year inactive well'' means any well that has not produced oil or gas in
more than one month in the three years prior to the date of application to the state
corporation commission for certification as a three-year inactive well. An application for
certification as a three-year inactive well shall be in such form and contain such information
as required by the state corporation commission, and shall be made prior to July 1, 1996.
The commission may revoke a certification if information indicates that a certified well was
not a three-year inactive well or if other lease production is credited to the certified well.
Upon notice to the operator that the certification for a well has been revoked, the exemption
shall not be applied to the production from that well from the date of revocation;
(6) (A) The incremental severance and production of oil or gas which results from a
production enhancement project begun on or after July 1, 1998, shall be exempt for a period
of seven years from the startup date of such project. As used in this paragraph (6):
(1) ``Incremental severance and production'' means the amount of oil or natural gas
which is produced as the result of a production enhancement project which is in excess of
the base production of oil or natural gas, and is determined by subtracting the base
production from the total monthly production after the production enhancement projects
is completed.
(2) ``Base production'' means the average monthly amount of production for the twelve-
month period immediately prior to the production enhancement project beginning date,
minus the monthly rate of production decline for the well or project for each month
beginning 180 days prior to the project beginning date. The monthly rate of production
decline shall be equal to the average extrapolated monthly decline rate for the well or project
for the twelve-month period immediately prior to the production enhancement project
beginning date. Such monthly rate of production decline shall be continued as the decline
that would have occurred except for the enhancement project. The calculation of the base
production amount shall be evidenced by an affidavit and supporting documentation filed
by the applying taxpayer with the state corporation commission.
(3) ``Workover'' means any downhole operation in an existing oil or gas well that is
designed to sustain, restore or increase the production rate or ultimate recovery of oil or
gas, including but not limited to acidizing, reperforation, fracture treatment, sand/paraffin/
scale removal or other wellbore cleanouts, casing repair, squeeze cementing, initial
installation, or enhancement of artificial lifts including plunger lifts, rods, pumps,
submersible pumps and coiled tubing velocity strings, downsizing existing tubing to reduce
well loading, downhole commingling, bacteria treatments, polymer treatments, upgrading
the size of pumping unit equipment, setting bridge plugs to isolate water production zones,
or any combination of the aforementioned operations; ``workover'' shall not mean the routine
maintenance, routine repair, or like for-like replacement of downhole equipment such as
rods, pumps, tubing packers or other mechanical device.
(4) ``Production enhancement project'' means performing or causing to be performed
the following:
(i) Workover;
(ii) recompletion to a different producing zone in the same well bore, except
recompletions in formations and zones subject to a state corporation commission proration
order;
(iii) secondary recovery projects;
(iv) addition of mechanical devices to dewater a gas or oil well;
(v) replacement or enhancement of surface equipment;
(vi) installation or enhancement of compression equipment, line looping or other
techniques or equipment which increases production from a well or a group of wells in a
project;
(vii) new discoveries of oil or gas which are discovered as a result of the use of new
technology, including, but not limited to, three dimensional seismic studies.
(B) The state corporation commission shall adopt rules and regulations necessary to
efficiently and properly administer the provisions of this paragraph (6) including rules and
regulations for the qualification of production enhancement projects, the procedures for
determining the monthly rate of production decline, criteria for determining the share of
incremental production attributable to each well when a production enhancement project
includes a group of wells, criteria for determining the start up date for any project for which
an exemption is claimed, and determining new qualifying technologies for the purposes of
paragraph (6)(A)(4)(vii).
(C) Any taxpayer applying for an exemption pursuant to this paragraph (6) shall make
application to the director of taxation. Such application shall be accompanied by a state
corporation commission certification that the production for which an exemption is sought
results from a qualified production enhancement project and certification of the base
production for the enhanced wells or group of wells, and the rate of decline to be applied
to that base production. The secretary of revenue shall provide credit for any taxes paid
between the project startup date and the certification of qualifications by the commission.
(D) The exemptions provided for in this paragraph (6) shall not apply for 12 months
beginning July 1 of the year subsequent to any calendar year during which: (1) In the case
of oil, the secretary of revenue determines that the weighted average price of Kansas oil at
the wellhead has exceeded $20.00 per barrel; or (2) in the case of natural gas the secretary
of revenue determines that the weighted average price of Kansas gas at the wellhead has
exceeded $2.50 per Mcf.
(E) The provisions of this paragraph (6) shall not affect any other exemption allowable
pursuant to this section; and
(7) the severance and production of oil occurring on and after July 1, 1999; and
(7)(8) for the calendar year 1988, and any year thereafter, the severance or production
of the first 350,000 tons of coal from any mine as certified by the state geological survey.
(c) No exemption shall be granted pursuant to subsection (b)(3) or (4) to any person
who does not have a valid operator's license issued by the state corporation commission,
and no refund of tax shall be made to any taxpayer attributable to any production in a period
when such taxpayer did not hold a valid operator's license issued by the state corporation
commission.
(d) On April 15, 1988, and on April 15 of each year thereafter, the secretary of revenue
shall determine from statistics compiled and provided by the United States department of
energy, the average price per barrel paid by the first purchaser of crude oil in this state for
the six-month period ending on December 31 of the preceding year. Such price shall be
used for the purpose of determining exemptions allowed by subsection (b)(2)(B) or (E) for
the twelve-month period commencing on May 1 of such year and ending on April 30 of the
next succeeding year.
Sec. 7. On and after July 1, 1999, K.S.A. 1998 Supp. 79-3602 and 79-3606 are hereby
repealed.
Sec. 8. K.S.A. 1998 Supp. 79-201w, 79-32,206 and 79-4217 are hereby repealed.'';
By renumbering the existing section accordingly;
In the title, in line 9, by striking all after ``ACT''; by striking all in line 10 and inserting
``enacting the Kansas commerce and industry tax reform and reduction act of 1999;
amending K.S.A. 1998 Supp. 79-201w, 79-32,206, 79-3602, 79-3606 and 79-4217 and
repealing the existing sections.''; and the bill be passed as amended.
The Committee on Transportation recommends SB 51, as amended by Senate
Committee of the Whole, be amended on page 1, following line 17, by inserting the
following:
``New Section 1. (a) On and after July 1, 1999, any owner of one or more passenger
vehicles or trucks registered for a gross weight of not more than 20,000 pounds who is a
resident of Kansas, upon compliance with the provisions of this section, may be issued one
children's trust fund license plate for each such passenger vehicle or truck. Such license
plates shall be issued for the same time as other license plates upon proper registration and
payment of the regular license fee as provided in K.S.A. 8-143, and amendments thereto,
and the presentation of the annual logo use authorization statement provided for in
subsection (b).
(b) The advisory committee on children and families established in K.S.A. 38-1901, and
amendments thereto, may authorize the use of their logo to be affixed on license plates as
provided by this section. Any royalty payment to such committee derived from this section
shall be credited to the family and children trust account of the family and children
investment fund, established in K.S.A. 38-1808, and amendments thereto, and, shall be used
in accordance with the provisions of paragraph (2) of subsection (c) of K.S.A. 38-1808, and
amendments thereto. Any motor vehicle owner may annually apply to the committee for
the use of such logo. Upon annual application and payment to the committee in an amount
of not less than $25 nor more than $100 as a logo use royalty payment for each children's
trust fund plate to be issued, the committee shall issue to the motor vehicle owner, without
further charge, a logo use authorization statement, which shall be presented by the motor
vehicle owner at the time of registration.
(c) Any applicant for a children's trust fund license plate may make application for such
plates not less than 60 days prior to such person's renewal of registration date, on a form
prescribed and furnished by the director of motor vehicles, and any applicant for the
children's trust fund license plates shall provide the annual logo use authorization statement
provided for in subsection (b). Application for registration of a passenger or truck and
issuance of the license plate under this section shall be made by the owner in a manner
prescribed by the director of vehicles upon forms furnished by the director.
(d) No registration or children's trust fund license plate issued under this section shall
be transferable to any other person.
(e) Renewals of registration under this section shall be made annually, upon payment
of the fee prescribed in subsection (a), in the manner prescribed in subsection (b) of K.S.A.
8-132, and amendments thereto. No renewal of registration shall be made to any applicant
until such applicant provides the annual logo use authorization statement provided for in
subsection (b). If such logo use authorization statement is not presented at the time of
registration, the applicant shall be required to comply with K.S.A. 8-143, and amendments
thereto, and return the children's trust fund license plate to the county treasurer of such
person's residence.
(f) The advisory committee on children and families shall:
(1) Pay the initial cost of silk-screening for such children's trust fund license plates; and
(2) provide to all county treasurers a toll-free telephone number where applicants can
call the children's trust fund for information concerning the application process or the status
of their license plate application.
(g) The advisory committee on children and families, with the approval of the director
of vehicles and subject to the availability of materials and equipment, shall design a plate
to be issued under the provisions of this section.'';
Also on page 1, in line 18, by striking ``Section 1.'' and inserting ``Sec. 2. On and after
July 1, 1999,'';
By renumbering sections accordingly;
On page 3, in line 27, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 4, in line 11, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 5, in line 12, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,''; in
line 29, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 6, in line 26, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 7, in line 32, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 8, in line 32, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 9, following line 21, by inserting the following:
``Sec. 10. On and after July 1, 1999, K.S.A. 1998 Supp. 8-1,141 is hereby amended to
read as follows: 8-1,141. (a) Any new distinctive license plate authorized for issuance on and
after July 1, 1994, shall be subject to the personalized license plate fee prescribed by
subsection (c) of K.S.A. 8-132, and amendments thereto. This section shall not apply to any
distinctive license plate authorized prior to July 1, 1994.
(b) The director of vehicles shall not issue any new distinctive license plate authorized
for issuance on and after July 1, 1995, unless there is a guarantee of an initial issuance of
at least 500 license plates.
(c) The provisions of this section shall not apply to distinctive license plates issued under
the provisions of K.S.A. 1998 Supp. 8-1,145, and amendments thereto.
(d) The provisions of subsection (a), shall not apply to distinctive license plates issued under the provisions of section 1.'';
By renumbering sections accordingly;
Also on page 9, in line 22, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 11, in line 8, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,''; in
line 41, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
On page 12, following line 32, by inserting the following:
``Sec. 14. On and after July 1, 1999, K.S.A. 8-235d is hereby amended to read as follows:
8-235d. (a) Drivers' license examiners of the division shall accept original applications for
drivers' licenses and instruction permits, as distinguished from applications for renewals of
licenses, on forms prescribed by the division and also shall issue instruction permits. Drivers'
license examiners of the division shall examine every applicant for a driver's license who is
required by the provisions of the motor vehicle drivers' license act to be examined. Such
examination shall be held in the county where the applicant resides or at a place adjacent
thereto reasonably convenient to the applicant or at a location established by the secretary
for the issuance of a commercial driver's license. Such examination shall include a test of
the applicant's eyesight, the applicant's ability to read and understand highway signs
regulating, warning and directing traffic, the applicant's knowledge of the traffic laws of this
state and shall include an actual demonstration of ability to exercise ordinary and reasonable
control in the operation of motor vehicles which the class of license applied for would entitle
the applicant to drive. At the conclusion of the examination the examiner shall issue a license
to the applicant, if the applicant has successfully passed the examination with the class of
license the applicant has applied for.
(b) In addition to the requirements of subsection (a), any person who is under the age of 18 years, who is applying for a driver's license for the first time, not including an instruction permit, shall submit a signed affidavit of either a parent or guardian, stating that the applicant has completed at least 50 hours of adult supervised driving with at least 10 of those hours being at night. The required adult supervised driving required in this subsection shall be conducted by an adult who is at least 21 years of age and is the holder of a valid commercial driver's license, class A, B or C driver's license.
Evidence of failure of any licensee who was required to complete the 50 hours of adult supervised driving under this subsection shall not be admissible in any action for the purpose of determining any aspect of comparative negligence or mitigation of damages.
Sec. 15. On and after July 1, 1999, K.S.A. 1998 Supp. 8-237 is hereby amended to read
as follows: 8-237. The division of vehicles shall not issue any driver's license to any person:
(a) Who is under the age of 16 years, except that the division may issue a restricted
class C or M license, as provided in this act, to any person who: (1) Is at least 15 years of
age; (2) has successfully completed an approved course in driver training; (3) submits a signed affidavit of either a parent or guardian, stating that the applicant has completed at least 50 hours of adult supervised driving with at least 10 of those hours being at night; and (3)(4) upon the written application of the person's parent or guardian. The required adult supervised driving required in clause (3) above shall be conducted by an adult who is at least 21 years of age and is the holder of a valid commercial driver's license, class A, B or C driver's license. Except as hereafter provided, the application of the parent or guardian
shall be submitted to the division. The governing body of any city, by ordinance, may require
the application of any person who is under 16 years of age and who resides within the city
to be first submitted to the chief law enforcement officer of the city. The board of county
commissioners of any county, by resolution, may require the application of any person who
is under 16 years of age and who resides within the county and outside the corporate limits
of any city to be first submitted to the chief law enforcement officer of the county. No
ordinance or resolution authorized by this subsection shall become effective until a copy of
it is transmitted to the division of vehicles. The chief law enforcement officer of any city or
county which has adopted the ordinance or resolution authorized by this subsection shall
make a recommendation on the application as to the necessity for the issuance of the
restricted license, and the recommendation shall be transmitted, with the application, to
the division of vehicles. If the division finds that it is necessary to issue the restricted license,
it shall issue a driver's license to the person.
A restricted class C license issued under this subsection shall entitle the licensee, while
possessing the license, to operate any motor vehicle in class C, as designated in K.S.A. 8-
234b, and amendments thereto. A restricted class M license shall entitle the licensee, while
possessing such license, to operate a motorcycle. The restricted license shall entitle the
licensee to operate the appropriate vehicle at any time:
(1) While going to or from or in connection with any job, employment or farm-related
work;
(2) on days while school is in session, over the most direct and accessible route between
the licensee's residence and school of enrollment for the purposes of school attendance;
(3) when the licensee is operating a passenger car, at any time when accompanied by
an adult who is the holder of a valid commercial driver's license, class A, B or C driver's
license and who is actually occupying a seat beside the driver; or
(4) when the licensee is operating a motorcycle, at any time when accompanied by an
adult who is the holder of a valid class M driver's license and who is operating a motorcycle
in the general proximity of the licensee.
Any licensee issued a restricted license under this subsection shall not operate any motor
vehicle with nonsibling minor passengers and any conviction for violating this provision shall be construed as a moving traffic violation for the purpose of K.S.A. 8-255, and amendments thereto.
A restricted driver's license issued under this subsection is subject to suspension or
revocation in the same manner as any other driver's license. In addition, the division may
suspend the restricted driver's license upon receiving satisfactory evidence that: (1) The
licensee has violated the restriction of the license, (2) the licensee has been involved in two
or more accidents chargeable to the licensee or (3) the recommendation of the chief law
enforcement officer of any city or county requiring the recommendation has been
withdrawn. The suspended license shall not be reinstated for one year or until the licensee
reaches the age of 16, whichever period is longer.
Any licensee issued a restricted license under this subsection who is under the age of 16 years and is convicted of two or more moving traffic violations committed on separate occasions shall not be eligible to receive a driver's license which is not restricted in accordance with the provisions of this subsection until the person reaches 17 years of age.
Evidence of failure of any licensee who was required to complete the 50 hours of adult supervised driving under this subsection shall not be admissible in any action for the purpose of determining any aspect of comparative negligence or mitigation of damages.
(b) Who is under the age of 18 years, except as provided in K.S.A. 1998 Supp. 8-2,147,
and amendments thereto, for the purpose of driving a commercial or class A or B motor
vehicle.
(c) Whose license is currently revoked, suspended or canceled in this or any other state,
except as provided in K.S.A. 8-256, and amendments thereto.
(d) Who is a habitual drunkard, habitual user of narcotic drugs or habitual user of any
other drug to a degree which renders the user incapable of safely driving a motor vehicle.
(e) Who has previously been adjudged to be afflicted with or suffering from any mental
disability or disease and who, at the time of making application for a driver's license, has
not been restored to capacity in the manner provided by law. Application of this limitation
to any person known to have suffered any seizure disorder is subject to the provisions of
paragraph (7) of subsection (e) of K.S.A. 8-247, and amendments thereto.
(f) Who is required by the motor vehicle drivers' license act to take an examination,
unless the person has successfully passed the examination.
(g) Who is at least 16 years of age and less than 17 years of age, who is applying for a
driver's license for the first time since reaching 16 years of age and who, three times or
more, has been adjudged to be a traffic offender under the Kansas juvenile code or a juvenile
offender under the Kansas juvenile justice code, by reason of violation of one or more
statutes regulating the movement of traffic on the roads, streets or highways of this state,
except that, in the discretion of the director, the person may be issued a driver's license
which is restricted in the manner the division deems to be appropriate. No person described
by this subsection shall be eligible to receive a driver's license which is not restricted until
the person has reached the age of 17 years.
Sec. 16. On and after July 1, 1999, K.S.A. 1998 Supp. 8-239 is hereby amended to read
as follows: 8-239. (a) Any person who is at least 14 years of age may apply to the division
for an instruction permit. The division may in its discretion, after the applicant has
successfully passed all parts of the examination other than the driving test, issue to the
applicant an instruction permit which shall entitle the applicant while having such permit
in such person's immediate possession to drive a passenger car upon the public highways
for a period of one year subject to the restrictions herein contained. The division may issue
an instruction or restricted instruction permit to any person who is at least 14 years of age
and under the age of 16 years only upon the written application of a parent or guardian of
the minor. The one having the instruction permit may operate a passenger car at any time
when accompanied by an adult who is the holder of a valid commercial driver's license, class A, B or C driver's license, who has had at least one year of driving experience and who is
occupying a seat beside the driver. Any person who is at least 14 years of age may apply for
an instruction permit to operate a motorcycle either separate from or in conjunction with
an instruction permit to operate a passenger car, and such permit shall entitle the permittee
to operate a motorcycle if such person is accompanied by an adult who is the holder of a
valid class M driver's license, who has had at least one year of driving experience and who
is riding a motorcycle in the general proximity of the permittee.
(b) The division upon receiving proper application may issue in its discretion a restricted
instruction permit effective for a school year or for a more restricted period to an applicant
who is at least 14 years of age and who is enrolled in a driver-education program which
includes practice driving and which is approved by the division, even though the applicant
has not reached the legal age to be eligible for a driver's license. Such instruction permit
shall entitle the permittee when the person has such permit in such person's immediate
possession to operate a passenger car only on a designated highway or within a designated
area but only when an approved instructor is occupying a seat beside the permittee or when
such permit has been endorsed by an approved instructor to operate a passenger car with
a parent or guardian who is the holder of a valid commercial driver's license, class A, B or
C driver's license, who has had at least one year of driving experience and who is occupying
a seat beside the driver.
(c) The division, in its discretion, may issue a temporary driver's permit to an applicant
for a classified driver's license permitting the applicant to operate a motor vehicle within
such classification while the division is completing its investigation and determination of all
facts relative to such applicant's right to receive a driver's license. The division may issue
such a temporary driver's permit to any applicant whose employer certifies that such permit
is necessary to complete seasonal agricultural operations of the employer. Any such
temporary driver's permit issued pursuant to this subsection shall be in the immediate
possession of the permittee while operating a motor vehicle, and it shall be invalid on the
date specified thereon, which shall not be more than 15 days after its issuance, or when the
applicant's license has been issued or for good cause has been refused.
Sec. 17. On and after July 1, 1999, K.S.A. 1998 Supp. 8-296 is hereby amended to read
as follows: 8-296. (a) Any person who is less than 16 years of age but is at least 14 years of
age and who resides upon a farm in this state or is employed for compensation upon a farm
in this state may apply to the division of vehicles for a farm permit authorizing such person,
while possessing the permit, to operate any motor vehicle in class C, as designated in K.S.A.
8-234b, and amendments thereto. The farm permit shall entitle the licensee to operate such
motor vehicles at any time:
(1) While going to or from or in connection with any farm job, employment or other
farm-related work;
(2) on days while school is in session, over the most direct and accessible route between
the licensee's residence and school of enrollment for the purpose of school attendance; or
(3) when the licensee is operating a passenger car at any time when accompanied by an
adult who is the holder of a valid commercial driver's license, class A, B or C driver's license
and who is actually occupying a seat beside the driver.
(b) A farm permit shall be issued only if:
(1) The applicant can prove that such applicant resides or works on a farm;
(2) the applicant has successfully completed the examination requirements in K.S.A. 8-
235d, and amendments thereto; and
(3) the applicant submits the signed affidavit of either a parent or guardian, stating that
the applicant lives on a farm or, if the applicant does not live on a farm but works on a farm,
the applicant submits the signed affidavit of the applicant's employer and parent or guardian,
attesting to such employment.
(c) Any licensee issued a farm permit under this section shall not operate any motor
vehicle with nonsibling minor passengers and any conviction for violating this provision shall be construed as a moving traffic violation for the purpose of K.S.A. 8-255, and amendments thereto.
(d) As used in this section, ``farm'' means any parcel of land larger than 20 acres which
is used in agricultural operations.
(e) A farm permit issued under this section is subject to suspension or revocation in the
same manner as any other driver's license. A person who has been issued a farm permit and
who violates this section by driving beyond the scope allowed in subsection (a) shall lose
the farm permit and shall be issued no other driver's license for a period of one year or
until the person reaches 16 years of age, whichever period is longer.
(f) Any licensee issued a farm permit under this section on and after July 1, 1999, shall provide prior to reaching 16 years of age, a signed affidavit of either a parent or guardian, stating that the applicant has completed at least 50 hours of adult supervised driving with at least 10 of those hours being at night. The adult supervised driving required by this paragraph shall be conducted by an adult who is at least 21 years of age and is the holder of a valid commercial driver's license, class A, B or C driver's license.
Evidence of failure of any licensee who was required to complete the 50 hours of adult supervised driving under this subsection shall not be admissible in any action for the purpose of determining any aspect of comparative negligence or mitigation of damages.
(g) Any licensee issued a farm permit under this section who is under the age of 16 years and is convicted of two or more moving traffic violations committed on separate occasions shall not be eligible to receive a driver's license which is not restricted in accordance with the provisions of subsection (a), until the person reaches 17 years of age.
Sec. 18. On and after July 1, 1999, K.S.A. 1998 Supp. 8-1014 is hereby amended to
read as follows: 8-1014. (a) Except as provided by subsection (d)(e) and K.S.A. 8-2,142,
and amendments thereto, if a person refuses a test, the division, pursuant to K.S.A. 8-1002,
and amendments thereto, shall suspend the person's driving privileges for one year.
(b) Except as provided by subsection (d)subsections (c) and (e) and K.S.A. 8-2,142, and
amendments thereto, if a person fails a test or has an alcohol or drug-related conviction in
this state, the division shall:
(1) On the person's first occurrence, suspend the person's driving privileges for 30 days,
then restrict the person's driving privileges as provided by K.S.A. 8-1015, and amendments
thereto, for an additional 330 days; and
(2) on the person's second or a subsequent occurrence, suspend the person's driving
privileges for one year.
(c) Except as provided by subsection (e) and K.S.A. 8-2,142, and amendments thereto, if a person who is less than 21 years of age fails a test or has an alcohol or drug-related conviction in this state, the division shall:
(1) Suspend the person's driving privileges for one year; or
(2) if such person has entered a diversion agreement under K.S.A. 12-4412 et seq., and amendments thereto, or K.S.A. 22-2906 et seq., and amendments thereto, suspend the person's driving privileges for the term of such diversion agreement.
(c)(d) Whenever the division is notified by an alcohol and drug safety action program
that a person has failed to complete any alcohol and drug safety action education or
treatment program ordered by a court for a conviction of a violation of K.S.A. 8-1567, and
amendments thereto, the division shall suspend the person's driving privileges until the
division receives notice of the person's completion of such program.
(d)(e) Except as provided in K.S.A. 8-2,142, and amendments thereto, if a person's
driving privileges are subject to suspension pursuant to this section for a test refusal, test
failure or alcohol or drug-related conviction arising from the same arrest, the period of such
suspension shall not exceed the longest applicable period authorized by subsection (a) or,
(b) or (c), and such suspension periods shall not be added together or otherwise imposed
consecutively. In addition, in determining the period of such suspension as authorized by
subsection (a) or, (b) or (c), such person shall receive credit for any period of time for which
such person's driving privileges were suspended while awaiting any hearing or final order
authorized by this act.
If a person's driving privileges are subject to restriction pursuant to this section for a test
failure or alcohol or drug-related conviction arising from the same arrest, the restriction
periods shall not be added together or otherwise imposed consecutively. In addition, in
determining the period of restriction, the person shall receive credit for any period of
suspension imposed for a test refusal arising from the same arrest.
(e)(f) If the division has taken action under subsection (a) for a test refusal or under
subsection (b) or (c) for a test failure and such action is stayed pursuant to K.S.A. 8-259,
and amendments thereto, or if temporary driving privileges are issued pursuant to subsection
(k) of K.S.A. 8-1002, and amendments thereto, the stay or temporary driving privileges shall
not prevent the division from taking the action required by subsection (b) or (c) for an
alcohol or drug-related conviction.
(f)(g) Upon restricting a person's driving privileges pursuant to this section, the division
shall issue without charge a driver's license which shall indicate on the face of the license
that restrictions have been imposed on the person's driving privileges and that a copy of the
order imposing the restrictions is required to be carried by the person for whom the license
was issued any time the person is operating a motor vehicle on the highways of this state.
Sec. 19. On and after July 1, 1999, K.S.A. 1998 Supp. 8-1567a is hereby amended to
read as follows: 8-1567a. (a) It shall be unlawful for any person less than 21 years of age to
operate or attempt to operate a vehicle in this state with a breath or blood alcohol content
of .02 or greater.
(b) Whenever a law enforcement officer determines that a breath or blood alcohol test
is to be required of a person less than 21 years of age pursuant to K.S.A. 8-1001 or K.S.A.
8-2,142 and amendments thereto, in addition to any other notices required by law, the law
enforcement officer shall provide written and oral notice that: (1) It is unlawful for any
person less than 21 years of age to operate or attempt to operate a vehicle in this state with
a breath or blood alcohol content of .02 or greater; and (2) if the person is less than 21 years
of age at the time of the test request and submits to and completes the test or tests and the
test results show an alcohol concentration of .02 or greater, the person's driving privileges
will be suspended for at least 30 days upon the first occurrence and for at least 90 days
upon a second or subsequent occurrence.
(c) Any suspension and restriction of driving privileges pursuant to this section shall be
in addition to any disqualification from driving a commercial motor vehicle pursuant to
K.S.A. 8-2,142 and amendments thereto.
(d) Whenever a breath or blood alcohol test is requested pursuant to K.S.A. 8-1001 and
amendments thereto, from a person less than 21 years of age, and results in a test result of
.02 or greater, but less than .08, a law enforcement officer's certification under this section
shall be prepared. The certification required by this section shall be signed by one or more
officers to certify that:
(1) (A) There existed reasonable grounds to believe the person was operating a vehicle
while under the influence of alcohol or drugs, or both, or to believe that the person had
been driving a commercial motor vehicle, as defined in K.S.A. 8-2,128 and amendments
thereto, while having alcohol or other drugs in such person's system; (B) the person had
been placed under arrest, was in custody or had been involved in a vehicle accident or
collision; (C) a law enforcement officer had presented the person with the oral and written
notice required by K.S.A. 8-1001 and amendments thereto, and the oral and written notice
required by this section; (D) that the person was less than 21 years of age at the time of the
test request; and (E) the result of the test showed that the person had an alcohol
concentration of .02 or greater in such person's blood or breath.
(2) With regard to a breath test, in addition to those matters required to be certified
under subsection (d)(1), that: (A) The testing equipment used was certified by the Kansas
department of health and environment; (B) the testing procedures used were in accordance
with the requirements set out by the Kansas department of health and environment; and
(C) the person who operated the testing equipment was certified by the Kansas department
of health and environment to operate such equipment.
(e) If a hearing is requested as a result of a law enforcement officer's certification under
this section, the scope of the hearing shall be limited to whether: (1) A law enforcement
officer had reasonable grounds to believe the person was operating a vehicle while under
the influence of alcohol or drugs, or both, or to believe that the person had been driving a
commercial motor vehicle, as defined in K.S.A. 8-2,128 and amendments thereto, while
having alcohol or other drugs in such person's system; (2) the person was in custody or
arrested for an alcohol or drug related offense or was involved in a motor vehicle accident
or collision resulting in property damage, personal injury or death; (3) a law enforcement
officer had presented the person with the oral and written notice required by K.S.A. 8-1001
and amendments thereto, and the oral and written notice required by this section; (4) the
testing equipment used was reliable; (5) the person who operated the testing equipment
was qualified; (6) the testing procedures used were reliable; (7) the test result determined
that the person had an alcohol concentration of .02 or greater in such person's blood or
breath; (8) the person was operating a vehicle; and (9) the person was less than 21 years of
age at the time a test was requested.
(f) If a person less than 21 years of age submits to a breath or blood alcohol test
requested pursuant to K.S.A. 8-1001 or K.S.A. 8-2,142 and amendments thereto, and
produces a test result of .02 or greater, but less than .08, the person's driving privileges upon the first occurrence shall be suspended for 30 days and upon a second or subsequent occurrence shall be suspended for 90 daysone year or if such person has entered a diversion agreement under K.S.A. 12-4412, et seq., and amendments thereto, or K.S.A. 22-2906, et seq., and amendments thereto, for the term of such diversion agreement.
(g) Except where there is a conflict between this section and K.S.A. 8-1001 and 8-1002
and amendments thereto, the provisions of K.S.A. 8-1001 and 8-1002 and amendments
thereto, shall be applicable to proceedings under this section.
(h) Any determination under this section that a person less than 21 years of age had a
test result of .02 or greater, but less than .08, and any resulting administrative action upon
the person's driving privileges, upon the first occurrence of such test result and
administrative action, shall not be considered by any insurance company in determining the
rate charged for any automobile liability insurance policy or whether to cancel any such
policy under the provisions of subsection (4)(a) of K.S.A. 40-277 and amendments thereto.
(i) The provisions of this section shall take effect on and after January 1, 1997.
Sec. 20. K.S.A. 1998 Supp. 74-2012 is hereby amended to read as follows: 74-2012. (a) All records of the division of vehicles shall be subject to the provisions of the open records act, except as otherwise provided under the provisions of this section and by K.S.A. 1998 Supp. 74-2022, and amendments thereto.
(a)(b) All records of the division of vehicles relating to the physical or mental condition
of any person, to expungement or except as provided further, any photographs maintained
by the division of vehicles in connection with the issuance of drivers' licenses shall be
confidential. Photographs or digital images maintained by the division of vehicles in
connection with the issuance of drivers' licenses shall be available to law enforcement
agencies for use in criminal investigations. Records of the division relating to diversion
agreements for the purposes of K.S.A. 8-1567, 12-4415 and 22-2908, and amendments
thereto, shall be confidential and shall be disclosed by direct computer access only to:
(1) A city, county or district attorney, for the purpose of determining a person's eligibility
for diversion;
(2) a municipal or district court, for the purpose of using the record in connection with
any matter before the court;
(3) a law enforcement agency, for the purpose of supplying the record to a person
authorized to obtain it under paragraph (1) or (2) of this subsection; or
(4) an employer when a person is required to retain a commercial driver's license due
to the nature of such person's employment.
All other records of the division of vehicles shall be subject to the provisions of the open records act except as otherwise provided by K.S.A. 1998 Supp. 74-2022 and amendments thereto or this section.
(b)(c) Lists of persons' names and addresses contained in or derived from records of
the division of vehicles shall not be sold, given or received for the purposes prohibited by
K.S.A. 21-3914, and amendments thereto, except that:
(1) The director of vehicles may provide to a requesting party, and a requesting party
may receive, such a list and accompanying information from public records of the division
upon written certification that the requesting party shall use the list solely for the purpose
of:
(A) Assisting manufacturers of motor vehicles in compiling statistical reports or in
notifying owners of vehicles believed to:
(i) Have safety-related defects,
(ii) fail to comply with emission standards; or
(iii) have any defect to be remedied at the expense of the manufacturer;
(B) assisting an insurer authorized to do business in this state, or the insurer's authorized
agent, in processing an application for, or renewal or cancellation of, a motor vehicle liability
insurance policy; or
(C) assisting the selective service system in the maintenance of a list of persons 18 to
26 years of age in this state as required under the provisions of section 3 of the federal
military selective service act.; or
(D) assisting businesses with the verification or reporting of information derived from the title and registration records of the division to prepare and assemble vehicle history reports, except that such vehicle history reports shall not include the names or addresses of any current or previous owners.
(2) Any law enforcement agency of this state which has access to public records of the
division may furnish to a requesting party, and a requesting party may receive, such a list
and accompanying information from such records upon written certification that the
requesting party shall use the list solely for the purpose of assisting an insurer authorized
to do business in this state, or the insurer's authorized agent, in processing an application
for, or renewal or cancellation of, a motor vehicle liability insurance policy.
(c)(d) If a law enforcement agency of this state furnishes information to a requesting
party pursuant to paragraph (2) of subsection (b)(2)(c), the law enforcement agency shall
charge the fee prescribed by the secretary of revenue pursuant to K.S.A. 1998 Supp. 74-
2022, and amendments thereto, for any copies furnished and may charge an additional fee
to be retained by the law enforcement agency to cover its cost of providing such copies.
The fee prescribed pursuant to K.S.A. 1998 Supp. 74-2022, and amendments thereto, shall
be paid monthly to the secretary of revenue and upon receipt thereof shall be deposited in
the state treasury to the credit of the electronic databases fee fund, except for the $1 of the
fee for each record required to be credited to the highway patrol training center fund under
subsection (e)(f).
(d)(e) The secretary of revenue, the secretary's agents or employees, the director of
vehicles or the director's agents or employees shall not be liable for damages caused by any
negligent or wrongful act or omission of a law enforcement agency in furnishing any
information obtained from records of the division of vehicles.
(e)(f) A fee in an amount fixed by the secretary of revenue pursuant to K.S.A. 1998
Supp. 74-2022, and amendments thereto, of not less than $2 for each request for information
in the public records of the division concerning any vehicle or licensed driver shall be
charged by the division, except that the director may charge a lesser fee pursuant to a
contract between the secretary of revenue and any person to whom the director is authorized
to furnish information under paragraph (1) of subsection (b)(c), and such fee shall not be
less than the cost of production or reproduction of any information requested. Except for
the fees charged pursuant to a contract for title and registration records on vehicles
authorized by this subsection, $1 shall be credited to the highway patrol training center
fund for each record.
(f)(g) The secretary of revenue may adopt such rules and regulations as are necessary
to implement the provisions of this section.
Sec. 21. K.S.A. 1998 Supp. 74-2012 is hereby repealed.'';
By renumbering sections accordingly;
Also on page 12, in line 33, preceding ``K.S.A.'' by inserting ``On and after July 1, 1999,'';
also in line 33, by striking ``and 8-1,139'' and inserting ``, 8-1,139 and 8-235d''; in line 34,
preceding ``8-1,142'' by inserting ``8-1,141,''; in line 35, by striking ``and 8-1,146'' and
inserting ``, 8-1,146, 8-237, 8-239, 8-296, 8-1014 and 8-1567a'';
In the title, in line 12, by striking all following the semicolon; in line 13, by striking all
preceding ``amending''; also in line 13, by striking ``and 8-1,139'' and inserting ``, 8-1,139
and 8-235d''; in line 14, preceding ``8-1,142'' by inserting ``8-1,141,''; in line 15, by striking
``and 8-1,146'' and inserting ``, 8-1,146, 8-237, 8-239, 8-296, 8-1014, 8-1567a and 74-2012'';
and the bill be passed as amended.
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 bill was thereupon introduced and read by title:
HB 2558, An act concerning the disposition of tobacco litigation settlement proceeds;
creating the children's trust fund and the children's initiatives fund; establishing the Kansas
children's authority and the children's trust fund board of trustees; prescribing certain
powers, duties and functions; providing for the investment and management of such funds;
abolishing the children's health care programs fund; also repealing K.S.A. 1998 Supp. 38-
2008, by Committee on Appropriations.
REPORT ON ENGROSSED BILLS HB 2048 reported correctly engrossed March 9, 1999.
REPORT ON ENROLLED RESOLUTIONS HR 6013 reported correctly enrolled and properly signed on March 10, 1999.
On motion of Rep. Glasscock, the House adjourned until 11:00 a.m., Thursday, March
11, 1999.