April 28, 2000

Journal of the Senate

SIXTY-FOURTH DAY
______
Senate Chamber, Topeka, Kansas
Friday, April 28, 2000--10:00 a.m.
 The Senate was called to order by President Dick Bond.

 The roll was called with forty senators present.

 Invocation by Chaplain Fred S. Hollomon:

     Heavenly Father,

     Every day the roll is called

 And forty names are sounded out.

 Most of them we hear respond,

 While Rich and Ben leave no doubt!

     This may be the last time

 Some of their names are called.

 Some have announced they won't return,

 Others may know this Fall.

     Our President will not be back

 And others will be missed.

 New names will soon be added

 To the Senate family list.

     The Senate is a family

 And families sometimes fight.

 But when tragedy or illness strikes,

 We close our ranks real tight.

     So when the Senate reconvenes

 Some friends will not be here.

 Bless them, Lord, where e're they go,

 In our memories they'll be near.

     I pray in the Name of Christ,

     AMEN

RECOGNITION OF PRESIDENT BOND
 Senator Feleciano rose on a point of personal privilege to honor retiring Senate President
Dick Bond and to acknowledge his wife Sue.

 In recognition of President Bond's retirement from the Kansas Senate, Senator Feleciano
read two poems written by Reverend Fred Hollomon honoring President Bond and his wife.



The man presiding in the chair
Is the Bond we're accustomed to.
But another Bond we all admire
Is the one we know as Sue.		President Bond concludes his term
And retires from the Kansas Senate;
And the man who inspired this rhyme for him
Is the senior Democrat in it!


She fulfills her role with dignity
And inspires her husband Dick.
She strides arm in arm beside him
At home, at work, in politics.		Paul came to Fred and asked him
To compose for Dick a tribute,
And also one for Sue his wife,
Since they both deserve a salute.


They say behind successful men
Are surprised mother-in-laws;
But this lady is not BEHIND her man;
She's BESIDE him deserving applause.		Surely everyone has recognized
The ability this man has
To preside with respect for one and all
Can hardly be surpassed.


We in the Senate salute Sue Bond,
And wish her the best in life.
Dick Bond must know he's fortunate
to be blessed with such a wife!		We wish you well on the home stretch, Dick,
Knowing full well it's true
You'll continue to be a smashing success
In whatever you seek to do!


 Members of the Senate presented President Bond with a painting by artist Jim Hamil, a
guest of the Senate, along with his wife Sharon. Mrs. Bond was given a bouquet of fresh
flowers.

 Members of the Senate, along with staff and guests, gave the Bonds a standing ovation.

REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
 The following bill and resolution were referred to Committees as indicated:

   Committee of the Whole: SR 1849.

 Ways and Means: HB 3052. 

MESSAGE FROM THE HOUSE
 Announcing, the House concurs in Senate amendments to Senate Substitute HB 2082
and requests the Senate to return the bill.

 The House adopts the conference committee report on SB 12.

 The House adopts the conference committee report on SB 574.

 Announcing passage of HB 3054.

 Having reconsidered the adoption of the conference committee report on Substitute HB
2683, the House not adopts the conference committee report on Substitute HB 2683,
requests a conference and appoints Representatives O'Neal, Carmody and Pauls as
conferees on the part of the House.

INTRODUCTION OF HOUSE BILLS AND CONCURRENT RESOLUTIONS
 HB 3054 was thereupon introduced and read by title.

REFERENCE OF HOUSE BILLS
 The President referred HB 3054 to the Committee of the Whole.

ORIGINAL MOTION
 Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: SB 380,
510.

CONSIDERATION OF MOTIONS TO CONCUR OR NONCONCUR
 Senator Lawrence moved the Senate concur in house amendments to SB 380.

 SB 380, An act concerning postsecondary educational institutions; relating to certain
tuition, fees and financial assistance; authorizing certain tuition and fee waivers for certain
national fellowship recipients; revising the definition of eligible institution and affecting the
amount of awards made under the Kansas ethnic minority scholarship program; amending
K.S.A. 74-3284, 74-3287, 74-3288, 74-3289 and 76-719c and K.S.A. 1999 Supp. 74-3286
and repealing the existing sections.

 On roll call, the vote was: Yeas 39, Nays 0, Present and Passing 1, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

 Present and Passing: Huelskamp.

 The Senate concurred.


EXPLANATION OF VOTE
 Mr. President: I must abstain from voting on SB 380, because my children are potential
recipients of this scholarship.--Tim Huelskamp

   Senator Praeger moved the Senate concur in house amendments to SB 510.

 SB 510, An act concerning the dental practices act; relating to licenses; amending K.S.A.
65-1421, 65-1422, 65-1428, 65-1430, 65-1433, 65-1435, 65-1441, 65-1457, 65-1458, 65-
1459, 74-1406 and 74-1407 and K.S.A. 1999 Supp. 65-1423, 65-1424, 65-1431, 65-1447, 65-
1455, 65-1456 and 65-1466 and repealing the existing sections.

 On roll call, the vote was: Yeas 39, Nays 1, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 Nays: Pugh.

 The Senate concurred.

ORIGINAL MOTION
 Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: SB 12,
190, 574; HB 2017.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 12, submits the following report:

      The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee of the Whole
amendments, as follows:

      On page 1, by striking all in lines 17 through 43;

      By striking all on pages 2 through 4 and inserting the following:

      ``Section  1. K.S.A. 1999 Supp. 74-2433 is hereby amended to read as follows: 74-2433.
(a) There is hereby created a state board of tax appeals, referred to in this act as the board.
The board shall be composed of five members who shall be appointed by the governor,
subject to confirmation by the senate as provided in K.S.A. 75-4315b, and amendments
thereto. After January 15, 1999, three of such members shall: (1) Have been regularly
admitted to practice law in the state of Kansas; and (2) for a period of at least five years,
have engaged in the active practice of law as a lawyer, judge of a court of record or any
other court in this state, or as a certified public accountant who has maintained registration
as an active attorney with the Kansas supreme court, or any combination thereof. Except
as provided by K.S.A. 1999 Supp. 46-2601, no person appointed to the board shall exercise
any power, duty or function as a member of the board until confirmed by the senate. Not
more than three members of the board shall be of the same political party. Members of the
board shall be residents of the state. Subject to the provisions of K.S.A. 75-4315c, and
amendments thereto, one shall be appointed from each of the congressional districts of
Kansas and the remainder from the state at large. The members of the board shall be
selected with special reference to training and experience for duties imposed by this act and
shall be individuals with legal, accounting or appraisal training and experience. Members
shall be subject to the supreme court rules of judicial conduct applicable to all judges of
the district court. The board shall be bound by the doctrine of stare decisis limited to
published decisions of an appellate court other than a district court. Members shall hold
office for terms of four years and until their successors are appointed and confirmed. Such
terms of office shall expire on January 15 of the last year of such term. If a vacancy occurs
on the board, the governor shall appoint a successor to fill the vacancy for the unexpired
term. The governor shall select one of its members to serve as chairperson. The votes of
three members shall be required for any action to be taken by the board. Meetings may be
called by the chairperson and shall be called on request of a majority of the members of
the board and when otherwise prescribed by statute.

      (b) Any member of the state board of tax appeals may be removed by the governor for
cause, after public hearing conducted in accordance with the provisions of the Kansas
administrative procedure act.

      (c) The state board of tax appeals shall appoint, subject to approval by the governor, an
executive director of the board, to serve at the pleasure of the board. The executive director
shall: (1) Be in the unclassified service under the Kansas civil service act; (2) devote full
time to the executive director's assigned duties; (3) receive such compensation as determined
by the board, subject to the limitations of appropriations thereof; and (4) have familiarity
with the tax appeals process sufficient to fulfill the duties of the office of executive director.
The executive director shall perform such duties as directed by the board.

      (d) Appeals decided by the state board of tax appeals which are deemed of sufficient
importance to be published shall be prepared and delivered to the director of printing, who
shall as speedily as possible print and publish such number of copies as shall be specified
published by the board.

      (e) After appointment, members of the state board of tax appeals shall complete the
following course requirements: (1) A tested appraisal course of not less than 30 clock hours
of instruction consisting of the fundamentals of real property appraisal with an emphasis on
the cost and sales approaches to value; (2) a tested appraisal course of not less than 30 clock
hours of instruction consisting of the fundamentals of real property appraisal with an
emphasis on the income approach to value; (3) a tested appraisal course of not less than 30
clock hours of instruction with an emphasis on mass appraisal; (4) an appraisal course with
an emphasis on Kansas property tax laws and; (5) an appraisal course on the techniques and
procedures for the valuation of state assessed properties with an emphasis on unit valuation;
and (6) a tested appraisal course on the techniques and procedures for the valuation of land
devoted to agricultural use pursuant to K.S.A. 79-1476, and amendments thereto. The
executive director shall adopt rules and regulations prescribing a timetable for the
completion of the course requirements and prescribing continued education requirements
for members of the board.

      (f) The state board of tax appeals shall have no capacity or power to sue or be sued.

      Sec.  2. K.S.A. 1999 Supp. 74-2433f is hereby amended to read as follows: 74-2433f.
On and after January 1, 1999, (a) There shall be a division of the state board of tax appeals
known as the small claims division. Hearing officers appointed by the executive director
shall have authority to hear and decide cases heard in the small claims division.

      (b) The small claims division shall have jurisdiction over hearing and deciding
applications for the refund of protested taxes under the provisions of K.S.A. 79-2005, and
amendments thereto, and hearing and deciding appeals from decisions rendered pursuant
to the provisions of K.S.A. 79-1448, and amendments thereto, and of article 16 of chapter
79 of the Kansas Statutes Annotated, and acts amendatory thereof or supplemental thereto,
with regard to single-family residential property. The filing of an appeal with the small
claims division shall be a prerequisite for filing an appeal with the state board of tax appeals
for appeals involving single-family residential property.
      (c) At the election of the taxpayer, the small claims division shall have jurisdiction over:
(1) Any appeal of a decision, finding, order or ruling of the director of taxation, except an
appeal, finding, order or ruling relating to an assessment issued pursuant to K.S.A. 79-5201
et seq., and amendments thereto, in which the amount of tax in controversy does not exceed
$15,000; (2) hearing and deciding applications for the refund of protested taxes under the
provisions of K.S.A. 79-2005, and amendments thereto, where the value of the property,
other than property devoted to agricultural use, is less than $2,000,000 as reflected on the
valuation notice or the property constitutes single family residential property; or (3) hearing
and deciding appeals from decisions rendered pursuant to the provisions of K.S.A. 79-1448,
and amendments thereto, and of article 16 or 17 of chapter 79 of the Kansas Statutes
Annotated, and acts amendatory thereof or supplemental thereto, other than those relating
to land devoted to agricultural use, wherein the value of the property is less than $2,000,000
as reflected on the valuation notice or the property constitutes single family residental
property.

      (c) (d) In accordance with the provisions of K.S.A. 74-2438, and amendments thereto,
any party may elect to appeal any application or decision referenced in subsection (b) to
the state board of tax appeals. Except as provided in subsection (b) regarding single-family
residential property, the filing of an appeal with the small claims division shall not be a
prerequisite for filing an appeal with the state board of tax appeals under this section. Final
decisions of the small claims division may be appealed to the state board of tax appeals. An
appeal of a decision of the small claims division to the state board of tax appeals shall be de
novo.

      (d) (e) A taxpayer shall commence a proceeding in the small claims division by filing a
notice of appeal in the form prescribed by the rules of the state board of tax appeals which
shall state the nature of the taxpayer's claim. Notice of appeal shall be provided to the
appropriate unit of government named in the notice of appeal by the taxpayer. In any
valuation appeal or tax protest commenced pursuant to articles 14 and 20 of chapter 79 of
the Kansas Statutes Annotated, and amendments thereto, the hearing shall be conducted in
the county where the property is located or a county adjacent thereto. In any appeal from
a final determination by the secretary of revenue, the hearing shall be conducted in the
county in which the taxpayer resides or a county adjacent thereto.

      (e) (f) The hearing in the small claims division shall be informal. The hearing officer
may hear any testimony and receive any evidence the hearing officer deems necessary or
desirable for a just determination of the case. A hearing officer shall have the authority to
administer oaths in all matters before the hearing officer. All testimony shall be given under
oath. A party may appear personally or may be represented by an attorney, a certified public
accountant, a certified general appraiser, a tax representative or agent, a member of the
taxpayer's immediate family or an authorized employee of the taxpayer. A county or unified
government may be represented by the county appraiser, designee of the county appraiser,
county attorney or counselor or other representatives so designated. No transcript of the
proceedings shall be kept.

      (f) (g) The hearing in the small claims division shall be conducted within 60 days after
the appeal is filed in the small claims division unless such time period is waived by the
taxpayer. A decision shall be rendered by the hearing officer within 30 days after the hearing
is concluded and, in cases arising from appeals described by subsections (b) and (c)(2) and
(3), shall be accompanied by a written explanation of the reasoning upon which such decision
is based. Documents provided by a taxpayer or county or district appraiser shall be returned
to the taxpayer or the county or district appraiser by the hearing officer and shall not become
a part of the board's permanent records. Documents provided to the hearing officer shall
be confidential and may not be disclosed, except as otherwise specifically provided.

      (g) (h) With regard to any matter properly submitted to the division relating to the
determination of valuation of property for taxation purposes, it shall be the duty of the
county appraiser to initiate the production of evidence to demonstrate, by a preponderance
of the evidence, the validity and correctness of such determination. No presumption shall
exist in favor of the county appraiser with respect to the validity and correctness of such
determination.

      Sec.  3. K.S.A. 1999 Supp. 79-201 is hereby amended to read as follows: 79-201. The
following described property, to the extent herein specified, shall be and is hereby exempt
from all property or ad valorem taxes levied under the laws of the state of Kansas:

      First. All buildings used exclusively as places of public worship and all buildings used
exclusively by school districts and school district interlocal cooperatives organized under the
laws of this state, with the furniture and books therein contained and used exclusively for
the accommodation of religious meetings or for school district or school district interlocal
cooperative purposes, whichever is applicable, together with the grounds owned thereby if
not leased or otherwise used for the realization of profit, except that: (a) (1) Any school
building, or portion thereof, together with the grounds upon which the building is located,
shall be considered to be used exclusively by the school district for the purposes of this
section when leased by the school district to any political or taxing subdivision of the state,
including a school district interlocal cooperative, or to any association, organization or
nonprofit corporation entitled to tax exemption with respect to such property; and (2) any
school building, together with the grounds upon which the building is located, shall be
considered to be used exclusively by a school district interlocal cooperative for the purposes
of this section when being acquired pursuant to a lease-purchase agreement; and (b) any
building, or portion thereof, used as a place of worship, together with the grounds upon
which the building is located, shall be considered to be used exclusively for the religious
purposes of this section when used as a not-for-profit day care center for children which is
licensed pursuant to K.S.A. 65-501 et seq., and amendments thereto, or when used to house
an area where the congregation of a church society and others may purchase tracts, books
and other items relating to the promulgation of the church society's religious doctrines.

      Second. All real property, and all tangible personal property, actually and regularly used
exclusively for literary, educational, scientific, religious, benevolent or charitable purposes,
including property used exclusively for such purposes by more than one agency or
organization for one or more of such exempt purposes. Except with regard to real property
which is owned by a religious organization, is to be used exclusively for religious purposes
and is not used for a nonexempt purpose prior to its exclusive use for religious purposes
which property shall be deemed to be actually and regularly used exclusively for religious
purposes for the purposes of this paragraph, this exemption shall not apply to such property,
not actually used or occupied for the purposes set forth herein, nor to such property held
or used as an investment even though the income or rentals received therefrom is used
wholly for such literary, educational, scientific, religious, benevolent or charitable purposes.
In the event any such property which has been exempted pursuant to the preceding sentence
is not used for religious purposes prior to its conveyance which results in its use for
nonreligious purposes, there shall be a recoupment of property taxes in an amount equal to
the tax which would have been levied upon such property except for such exemption for all
taxable years for which such exemption was in effect. Such recoupment tax shall become
due and payable in such year as provided by K.S.A. 79-2004, and amendments thereto. A
lien for such taxes shall attach to the real property subject to the same on November 1 in
the year such taxes become due and all such taxes remaining due and unpaid after the date
prescribed for the payment thereof shall be collected in the manner provided by law for
the collection of delinquent taxes. Moneys collected from the recoupment tax hereunder
shall be credited by the county treasurer to the several taxing subdivisions within which
such real property is located in the proportion that the total tangible property tax levies
made in the preceding year for each such taxing subdivision bear to the total of all such
levies made in that year by all such taxing subdivisions. Such moneys shall be credited to
the general fund of the taxing subdivision or if such taxing subdivision is making no property
tax levy for the support of a general fund such moneys may be credited to any other tangible
property tax fund of general application of such subdivision. This exemption shall not be
deemed inapplicable to property which would otherwise be exempt pursuant to this
paragraph because an agency or organization: (a) Is reimbursed for the provision of services
accomplishing the purposes enumerated in this paragraph based upon the ability to pay by
the recipient of such services; or (b) is reimbursed for the actual expense of using such
property for purposes enumerated in this paragraph; or (c) uses such property for a
nonexempt purpose which is minimal in scope and insubstantial in nature if such use is
incidental to the exempt purposes of this paragraph; or (d) charges a reasonable fee for
admission to cultural or educational activities or permits the use of its property for such
activities by a related agency or organization, if any such activity is in furtherance of the
purposes of this paragraph.

      Third. All moneys and credits belonging exclusively to universities, colleges, academies
or other public schools of any kind, or to religious, literary, scientific or benevolent and
charitable institutions or associations, appropriated solely to sustain such institutions or
associations, not exceeding in amount or in income arising therefrom the limit prescribed
by the charter of such institution or association.

      Fourth. The reserve or emergency funds of fraternal benefit societies authorized to do
business under the laws of the state of Kansas.

      Fifth. All buildings of private nonprofit universities or colleges which are owned and
operated by such universities and colleges as student union buildings, presidents' homes
and student dormitories.

      Sixth. All real and tangible personal property actually and regularly used exclusively by
the alumni association associated by its articles of incorporation with any public or nonprofit
Kansas college or university approved by the Kansas board of regents to confer academic
degrees or with any community college approved by its board of trustees to grant certificates
of completion of courses or curriculum, to provide accommodations and services to such
college or university or to the alumni, staff or faculty thereof.

      Seventh. All parsonages owned by a church society and actually and regularly occupied
and used predominantly as a residence by a minister or other clergyman of such church
society who is actually and regularly engaged in conducting the services and religious
ministrations of such society, and the land upon which such parsonage is located to the
extent necessary for the accommodation of such parsonage.

      Eighth. All real property, all buildings located on such property and all personal property
contained therein, actually and regularly used exclusively by any individually chartered
organization of honorably discharged military veterans of the United States armed forces or
auxiliary of any such organization, which is exempt from federal income taxation pursuant
to section 501(c)(19) of the federal internal revenue code of 1986, for clubhouse, place of
meeting or memorial hall purposes, and real property to the extent of not more than two
acres, and all buildings located on such property, actually and regularly used exclusively by
any such veterans' organization or its auxiliary as a memorial park.

      Ninth. All real property and tangible personal property actually and regularly used by a
community service organization for the predominant purpose of providing humanitarian
services, which is owned and operated by a corporation organized not for profit under the
laws of the state of Kansas or by a corporation organized not for profit under the laws of
another state and duly admitted to engage in business in this state as a foreign not-for-profit
corporation if: (a) The directors of such corporation serve without pay for such services; (b)
the corporation is operated in a manner which does not result in the accrual of distributable
profits, realization of private gain resulting from the payment of compensation in excess of
a reasonable allowance for salary or other compensation for services rendered or the
realization of any other form of private gain; (c) no officer, director or member of such
corporation has any pecuniary interest in the property for which exemption is claimed; (d)
the corporation is organized for the purpose of providing humanitarian services; (e) the
actual use of property for which an exemption is claimed must be substantially and
predominantly related to the purpose of providing humanitarian services, except that, the
use of such property for a nonexempt purpose which is minimal in scope and insubstantial
in nature shall not result in the loss of exemption if such use is incidental to the purpose of
providing humanitarian services by the corporation; (f) the corporation is exempt from
federal income taxation pursuant to section 501(c)(3) of the internal revenue code of 1986
and; (g) contributions to the corporation are deductible under the Kansas income tax act.
As used in this clause, ``humanitarian services'' means the conduct of activities which
substantially and predominantly meet a demonstrated community need and which improve
the physical, mental, social, cultural or spiritual welfare of others or the relief, comfort or
assistance of persons in distress or any combination thereof including but not limited to
health and recreation services, child care, individual and family counseling, employment
and training programs for handicapped persons and meals or feeding programs.
Notwithstanding any other provision of this clause, motor vehicles shall not be exempt
hereunder unless such vehicles are exclusively used for the purposes described therein,
except that the use of any such vehicle for the purpose of participating in a coordinated
transit district in accordance with the provisions of K.S.A. 75-5032 through 75-5037, and
amendments thereto, or K.S.A. 75-5051 through 75-5058, and amendments thereto, shall be
deemed as exclusive use.

      Tenth. For all taxable years commencing after December 31, 1986, any building, and the
land upon which such building is located to the extent necessary for the accommodation of
such building, owned by a church or nonprofit religious society or order which is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue
code of 1986, and actually and regularly occupied and used exclusively for residential and
religious purposes by a community of persons who are bound by vows to a religious life and
who conduct or assist in the conduct of religious services and actually and regularly engage
in religious, benevolent, charitable or educational ministrations or the performance of health
care services.

      Eleventh. For all taxable years commencing after December 31, 1998, all real property
upon which is located facilities which utilize renewable energy resources or technologies for
the purpose and as the primary means to produce and generate electricity and which is used
predominantly for such purpose, to the extent necessary to accommodate such facilities,
and all tangible personal property which comprises such facilities actually and regularly
used predominantly to produce and generate electricity utilizing renewable energy resources
or technologies. For purposes of this section, ''renewable energy resources or technologies``
shall include wind, solar, thermal, photovoltaic, biomass, hydropower, geothermal and
landfill gas resources or technologies. For purposes of valuation of property subject to
valuation under K.S.A. 79-5a01 et seq., and amendments thereto, the value of the exempt
property set forth in this clause shall be removed from the unit value prior to apportionment
under K.S.A. 79-5a25, and amendments thereto.

      The provisions of this section, except as otherwise more specifically provided, shall apply
to all taxable years commencing after December 31, 1995.

      Sec.  4. K.S.A. 1999 Supp. 79-201j is hereby amended to read as follows: 79-201j. 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) All farm machinery and equipment. The term ``farm machinery and equipment''
means that personal property actually and regularly used in any farming or ranching
operation. The term ``farm machinery and equipment'' shall include: (1) Machinery and
equipment comprising a natural gas distribution system which is owned and operated by a
nonprofit public utility described by K.S.A. 66-104c, and amendments thereto, and which
is operated predominantly for the purpose of providing fuel for the irrigation of land devoted
to agricultural use; and (2) any greenhouse which is not permanently affixed to real estate
and which is used for a farming or ranching operation. The term ``farming or ranching
operation'' shall include the operation of a feedlot and, the performing of farm or ranch
work for hire and the planting, cultivating and harvesting of nursery or greenhouse products,
or both, for sale or resale. The term ``farm machinery and equipment'' shall not include any
passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a farm
trailer, as the terms are defined by K.S.A. 8-126 and amendments thereto.

      The provisions of this subsection shall apply to all taxable years commencing after
December 31, 1998 1999.

      (b)  (1) All aquaculture machinery and equipment. The term ``aquaculture machinery
and equipment'' means that personal property actually and regularly used in any aquaculture
operation. The term ``aquaculture operation'' shall include the feeding out of aquatic plants
and animals; breeding, growing or rearing aquatic plants and animals; and selling or
transporting aquatic plants and animals. The term ``aquaculture machinery and equipment''
shall not include any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer.

      (2) All Christmas tree machinery and equipment. The term ``Christmas tree machinery
and equipment'' means that personal property actually and regularly used in any Christmas
tree operation. The term ``Christmas tree operation'' shall include the planting, cultivating
and harvesting of Christmas trees; and selling or transporting Christmas trees. The term
``Christmas tree machinery and equipment'' shall not include any passenger vehicle, truck,
truck tractor, trailer, semitrailer or pole trailer.

      The provisions of this subsection shall apply to all taxable years commencing after
December 31, 1992.

      Sec.  5. K.S.A. 1999 Supp. 79-1448 is hereby amended to read as follows: 79-1448. Any
taxpayer may complain or appeal to the county appraiser from the classification or appraisal
of the taxpayer's property by giving notice to the county appraiser within 30 days subsequent
to the date of mailing of the valuation notice required by K.S.A. 79-1460, and amendments
thereto, for real property, and on or before May 15 for personal property. The county
appraiser or the appraiser's designee shall arrange to hold an informal meeting with the
aggrieved taxpayer with reference to the property in question. At such meeting it shall be
the duty of the county appraiser or the county appraiser's designee to initiate production of
evidence to substantiate the valuation of such property, including the affording to the
taxpayer of the opportunity to review the data sheet of comparable sales utilized in the
determination of such valuation. The county appraiser may extend the time in which the
taxpayer may informally appeal from the classification or appraisal of the taxpayer's property
for just and adequate reasons. Except as provided in K.S.A. 79-1404, and amendments
thereto, no informal meeting regarding real property shall be scheduled to take place after
May 15, nor shall a final determination be given by the appraiser after May 20. Any final
determination shall be accompanied by a written explanation of the reasoning upon which
such determination is based when such determination is not in favor of the taxpayer. Any
taxpayer who is aggrieved by the final determination of the county appraiser may appeal to
the hearing officer or panel appointed pursuant to K.S.A. 79-1611, and amendments thereto,
and such hearing officer, or panel, for just cause shown and recorded, is authorized to change
the classification or valuation of specific tracts or individual items of real or personal property
in the same manner provided for in K.S.A. 79-1606, and amendments thereto. In lieu of
appealing to a hearing officer or panel appointed pursuant to K.S.A. 79-1611, and
amendments thereto, any taxpayer aggrieved by the final determination of the county
appraiser, except with regard to land devoted to agricultural use, wherein the value of the
property, is less than $2,000,000, as reflected on the valuation notice, or the property
constitutes single family residential property, may appeal to the small claims division of the
state board of tax appeals within the time period prescribed by K.S.A. 79-1606, and
amendments thereto. Any taxpayer who is aggrieved by the final determination of a hearing
officer or panel may appeal to the state board of tax appeals as provided in K.S.A. 79-1609,
and amendments thereto. An informal meeting with the county appraiser or the appraiser's
designee shall be a condition precedent to an appeal to the county or district hearing panel.

      Sec.  6. K.S.A. 1999 Supp. 79-1606 is hereby amended to read as follows: 79-1606. (a)
The county or district appraiser, hearing officer or panel and arbitrator shall adopt, use and
maintain the following records, the form and method of use of which shall be prescribed
by the director of property valuation: (1) Appeal form, (2) hearing docket, and (3) record
of cases, including the disposition thereof.

      (b) The county clerk shall furnish appeal forms to any taxpayer who desires to appeal
the final determination of the county or district appraiser as provided in K.S.A. 79-1448,
and amendments thereto. Any such appeal shall be in writing and filed with the county clerk
within 18 days of the date that the final determination of the appraiser was mailed to the
taxpayer.

      (c) The hearing officer or panel shall hear and determine any appeal made by any
taxpayer or such taxpayer's agent or attorney. All such hearings shall be held in a suitable
place in the county or district. Sufficient evening and Saturday hearings shall be provided
as shall be necessary to hear all parties making requests for hearings at such times.

      (d) Every appeal so filed shall be set for hearing by the hearing officer or panel, which
hearing shall be held on or before July 1, and the hearing officer or panel shall have no
authority to be in session thereafter, except as provided in K.S.A. 79-1404, and amendments
thereto. The county clerk shall notify each appellant and the county or district appraiser of
the date for hearing of the taxpayer's appeal at least 10 days in advance of such hearing. It
shall be the duty of the county or district appraiser to initiate the production of evidence to
demonstrate, by a preponderance of the evidence, the validity and correctness of the
classification or appraisal of residential property or real property used for commercial and
industrial purposes, except that no such duty shall accrue with regard to leased commercial
and industrial property unless the property owner has furnished to the county or district
appraiser a complete income and expense statement for the property for the three years
next proceeding the year of appeal. No presumption shall exist in favor of the county or
district appraiser with respect to the validity or correctness of any such classification or
valuation. Every such appeal shall be determined by order of the hearing officer or panel,
and such which shall be accompanied by a written explanation of the reasoning upon which
such order is based. Such order shall be recorded in the minutes of such hearing officer or
panel on or before July 5. Such recorded orders and minutes shall be open to public
inspection. Notice as to disposition of the appeal shall be mailed by the county clerk to the
taxpayer and the county or district appraiser within five days after the determination.

      Sec.  7. K.S.A. 1999 Supp. 79-1476 is hereby amended to read as follows: 79-1476. The
director of property valuation is hereby directed and empowered to administer and supervise
a statewide program of reappraisal of all real property located within the state. Except as
otherwise authorized by K.S.A. 19-428, and amendments thereto, each county shall
comprise a separate appraisal district under such program, and the county appraiser shall
have the duty of reappraising all of the real property in the county pursuant to guidelines
and timetables prescribed by the director of property valuation and of updating the same
on an annual basis. In the case of multi-county appraisal districts, the district appraiser shall
have the duty of reappraising all of the real property in each of the counties comprising the
district pursuant to such guidelines and timetables and of updating the same on an annual
basis. Commencing in 2000, every parcel of real property shall be actually viewed and
inspected by the county or district appraiser once every six years. Any county or district
appraiser shall be deemed to be in compliance with the foregoing requirement in any year
if 17% or more of the parcels in such county or district are actually viewed and inspected.

      Compilation of data for the initial preparation or updating of inventories for each parcel
of real property and entry thereof into the state computer system as provided for in K.S.A.
79-1477, and amendments thereto, shall be completed not later than January 1, 1989.
Whenever the director determines that reappraisal of all real property within a county is
complete, notification thereof shall be given to the governor and to the state board of tax
appeals.

      Valuations shall be established for each parcel of real property at its fair market value in
money in accordance with the provisions of K.S.A. 79-503a, and amendments thereto.

      In addition thereto valuations shall be established for each parcel of land devoted to
agricultural use upon the basis of the agricultural income or productivity attributable to the
inherent capabilities of such land in its current usage under a degree of management
reflecting median production levels in the manner hereinafter provided. A classification
system for all land devoted to agricultural use shall be adopted by the director of property
valuation using criteria established by the United States department of agriculture soil
conservation service. For all taxable years commencing after December 31, 1989, all land
devoted to agricultural use which is subject to the federal conservation reserve program
shall be classified as cultivated dry land for the purpose of valuation for property tax purposes
pursuant to this section. For all taxable years commencing after December 31, 1999, all land
devoted to agricultural use which is subject to the federal wetlands reserve program shall
be classified as native grassland for the purpose of valuation for property tax purposes
pursuant to this section. Productivity of land devoted to agricultural use shall be determined
for all land classes within each county or homogeneous region based on an average of the
eight calendar years immediately preceding the calendar year which immediately precedes
the year of valuation, at a degree of management reflecting median production levels. The
director of property valuation shall determine median production levels based on
information available from state and federal crop and livestock reporting services, the soil
conservation service, and any other sources of data that the director considers appropriate.

      The share of net income from land in the various land classes within each county or
homogeneous region which is normally received by the landlord shall be used as the basis
for determining agricultural income for all land devoted to agricultural use except pasture
or rangeland. The net income normally received by the landlord from such land shall be
determined by deducting expenses normally incurred by the landlord from the share of the
gross income normally received by the landlord. The net rental income normally received
by the landlord from pasture or rangeland within each county or homogeneous region shall
be used as the basis for determining agricultural income from such land. The net rental
income from pasture and rangeland which is normally received by the landlord shall be
determined by deducting expenses normally incurred from the gross income normally
received by the landlord. Commodity prices, crop yields and pasture and rangeland rental
rates and expenses shall be based on an average of the eight calendar years immediately
preceding the calendar year which immediately precedes the year of valuation. Net income
for every land class within each county or homogeneous region shall be capitalized at a rate
determined to be the sum of the contract rate of interest on new federal land bank loans in
Kansas on July 1 of each year averaged over a five-year period which includes the five years
immediately preceding the calendar year which immediately precedes the year of valuation,
plus a percentage not less than .75% nor more than 2.75%, as determined by the director
of property valuation.

      Based on the foregoing procedures the director of property valuation shall make an annual
determination of the value of land within each of the various classes of land devoted to
agricultural use within each county or homogeneous region and furnish the same to the
several county appraisers who shall classify such land according to its current usage and
apply the value applicable to such class of land according to the valuation schedules prepared
and adopted by the director of property valuation under the provisions of this section.

      It is the intent of the legislature that appraisal judgment and appraisal standards be
followed and incorporated throughout the process of data collection and analysis and
establishment of values pursuant to this section.

      For the purpose of the foregoing provisions of this section the phrase ``land devoted to
agricultural use'' shall mean and include land, regardless of whether it is located in the
unincorporated area of the county or within the corporate limits of a city, which is devoted
to the production of plants, animals or horticultural products, including but not limited to:
Forages; grains and feed crops; dairy animals and dairy products; poultry and poultry
products; beef cattle, sheep, swine and horses; bees and apiary products; trees and forest
products; fruits, nuts and berries; vegetables; nursery, floral, ornamental and greenhouse
products. Land devoted to agricultural use shall not include those lands which are used for
recreational purposes, other than that land established as a controlled shooting area pursuant
to K.S.A. 32-943, and amendments thereto, which shall be deemed to be land devoted to
agricultural use, suburban residential acreages, rural home sites or farm home sites and yard
plots whose primary function is for residential or recreational purposes even though such
properties may produce or maintain some of those plants or animals listed in the foregoing
definition.

      The term ``expenses'' shall mean those expenses typically incurred in producing the plants,
animals and horticultural products described above including management fees, production
costs, maintenance and depreciation of fences, irrigation wells, irrigation laterals and real
estate taxes, but the term shall not include those expenses incurred in providing temporary
or permanent buildings used in the production of such plants, animals and horticultural
products.

      The provisions of this act shall not be construed to conflict with any other provisions of
law relating to the appraisal of tangible property for taxation purposes including the
equalization processes of the county and state board of tax appeals.

      Sec.  8. K.S.A. 1999 Supp. 74-2433, 74-2433f, 79-201, 79-201j, 79-5a01b, 79-1448, 79-
1476 and 79-1606 are hereby repealed.

      Sec.  9. This act shall take effect and be in force from and after its publication in the
statute book.'';

      In the title, in line 12, by striking all after the semicolon; by striking all in lines 13 and
14 and inserting ``amending K.S.A. 1999 Supp. 74-2433, 74-2433f, 79-201, 79-201j, 79-1448,
79-1476 and 79-1606 and repealing the existing sections; also repealing K.S.A. 1999 Supp.
79-5a01b.'';

                                                                                          \ And your committee on conference recommends the adoption of this report.

                                                                                    Susan Wagle

                                                                                    Clay Aurand

                                                                                    Melvin G. Minor
 Conferees on the part of House
                                                                                   

                                                                                    Audrey Langworthy

                                                                                    David R. Corbin

                                                                                    Janis K. Lee
 Conferees on part of Senate


   Senator Langworthy moved the Senate adopt the Conference Committee Report on SB
12.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 190, submits the following report:

      The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee amendments,
as follows:

      On page 1, in line 19, by striking ``1998'' and inserting ``1999'';

      On page 4, in line 18, by striking ``1998'' and inserting ``1999''; in line 39, by striking all
after ``(b)''; in line 40, by striking ``sued,'';

      On page 5, in line 8, by striking ``1998'' and inserting ``1999'';

      On page 6, in line 1, by striking ``1998'' and inserting ``1999'';

      On page 7, after line 6, by inserting the following:

      ``(c) Notwithstanding the provisions of subsection (b), an institutional license may be
renewed once for two years if the holder was issued an institutional license prior to May 8,
1997, has successfully completed two years of postgraduate training in the United States
and has submitted evidence of satisfactory completion of a program of continuing education
required by the board.'';

      Also on page 7, in line 7, by striking ``(c)'' and inserting ``(d)''; in line 9, by striking ``1998''
and inserting ``1999''; in line 21, after the period, by inserting: ``The board shall revoke a
licensee's license following conviction of a felony occurring after July 1, 2000, unless a 2/3
majority of the board members present and voting determine by clear and convincing
evidence that such licensee will not pose a threat to the public in such person's capacity as
a licensee and that such person has been sufficiently rehabilitated to warrant the public
trust. In the case of a person who has been convicted of a felony and who applies for an
original license or to reinstate a canceled license, the application for a license shall be denied
unless a 2/3 majority of the board members present and voting on such application determine
by clear and convincing evidence that such person will not pose a threat to the public in
such person's capacity as a licensee and that such person has been sufficiently rehabilitated
to warrant the public trust.''; in line 39, by striking ``the branch of''; in line 40, by striking
``for which the licensee is licensed''; in line 41, after ``of'' by inserting ``physical or mental'';
also in line 41, after ``illness'' by inserting ``or condition''; also in line 41, by striking
``alcoholism, excessive'' and inserting ``or''; in line 42, after ``of'' where it appears for the first
time, by inserting ``alcohol,''; also in line 42, by striking the comma after ``drugs'' and
inserting ``or''; also in line 42, by striking all after ``substances''; in line 43, by striking all
before the period;

      On page 8, in line 5, before the period, by inserting: ``either in the course of an
investigation or a disciplinary proceeding''; in line 12, by striking ``, and the'' and inserting:
``or to a presiding officer authorized pursuant to K.S.A. 77-514 and amendments thereto.
The'';

      On page 9, in line 11, after ``inform'' by inserting ``in writing''; in line 13, by striking
``specified''; by striking all in lines 14 through 34; in line 35, by striking all before the period
and inserting: ``recognized by licensees of the same profession in the same or similar
communities as being acceptable under like conditions and circumstances'';

      On page 11, in line 20, by striking ``1998'' and inserting ``1999''; in line 23, by striking
``1998'' and inserting ``1999''; after line 23, by inserting the following:

      ``Sec.  6. K.S.A. 1999 Supp. 65-2837 is hereby amended to read as follows: 65-2837. As
used in K.S.A. 65-2836, and amendments thereto, and in this section:

      (a) ``Professional incompetency'' means:

      (1) One or more instances involving failure to adhere to the applicable standard of care
to a degree which constitutes gross negligence, as determined by the board.

      (2) Repeated instances involving failure to adhere to the applicable standard of care to
a degree which constitutes ordinary negligence, as determined by the board.

      (3) A pattern of practice or other behavior which demonstrates a manifest incapacity or
incompetence to practice medicine.

      (b) ``Unprofessional conduct'' means:

      (1) Solicitation of professional patronage through the use of fraudulent or false
advertisements, or profiting by the acts of those representing themselves to be agents of the
licensee.

      (2) Representing to a patient that a manifestly incurable disease, condition or injury can
be permanently cured.

      (3) Assisting in the care or treatment of a patient without the consent of the patient,
the attending physician or the patient's legal representatives.

      (4) The use of any letters, words, or terms, as an affix, on stationery, in advertisements,
or otherwise indicating that such person is entitled to practice a branch of the healing arts
for which such person is not licensed.

      (5) Performing, procuring or aiding and abetting in the performance or procurement
of a criminal abortion.

      (6) Willful betrayal of confidential information.

      (7) Advertising professional superiority or the performance of professional services in a
superior manner.

      (8) Advertising to guarantee any professional service or to perform any operation
painlessly.

      (9) Participating in any action as a staff member of a medical care facility which is
designed to exclude or which results in the exclusion of any person licensed to practice
medicine and surgery from the medical staff of a nonprofit medical care facility licensed in
this state because of the branch of the healing arts practiced by such person or without just
cause.

      (10) Failure to effectuate the declaration of a qualified patient as provided in subsection
(a) of K.S.A. 65-28,107, and amendments thereto.

      (11) Prescribing, ordering, dispensing, administering, selling, supplying or giving any
amphetamines or sympathomimetic amines, except as authorized by K.S.A. 65-2837a, and
amendments thereto.

      (12) Conduct likely to deceive, defraud or harm the public.

      (13) Making a false or misleading statement regarding the licensee's skill or the efficacy
or value of the drug, treatment or remedy prescribed by the licensee or at the licensee's
direction in the treatment of any disease or other condition of the body or mind.

      (14) Aiding or abetting the practice of the healing arts by an unlicensed, incompetent
or impaired person.

      (15) Allowing another person or organization to use the licensee's license to practice
the healing arts.

      (16) Commission of any act of sexual abuse, misconduct or exploitation related to the
licensee's professional practice.

      (17) The use of any false, fraudulent or deceptive statement in any document connected
with the practice of the healing arts including the intentional falsifying or fraudulent altering
of a patient or medical care facility record.

      (18) Obtaining any fee by fraud, deceit or misrepresentation.

      (19) Directly or indirectly giving or receiving any fee, commission, rebate or other
compensation for professional services not actually and personally rendered, other than
through the legal functioning of lawful professional partnerships, corporations or
associations.

      (20) Failure to transfer patient records to another licensee when requested to do so by
the subject patient or by such patient's legally designated representative.

      (21) Performing unnecessary tests, examinations or services which have no legitimate
medical purpose.

      (22) Charging an excessive fee for services rendered.

      (23) Prescribing, dispensing, administering, distributing a prescription drug or
substance, including a controlled substance, in an excessive, improper or inappropriate
manner or quantity or not in the course of the licensee's professional practice.

      (24) Repeated failure to practice healing arts with that level of care, skill and treatment
which is recognized by a reasonably prudent similar practitioner as being acceptable under
similar conditions and circumstances.

      (25) Failure to keep written medical records which accurately describe the services
rendered to the patient, including patient histories, pertinent findings, examination results
and test results.

      (26) Delegating professional responsibilities to a person when the licensee knows or has
reason to know that such person is not qualified by training, experience or licensure to
perform them.

      (27) Using experimental forms of therapy without proper informed patient consent,
without conforming to generally accepted criteria or standard protocols, without keeping
detailed legible records or without having periodic analysis of the study and results reviewed
by a committee or peers.

      (28) Prescribing, dispensing, administering or distributing an anabolic steroid or human
growth hormone for other than a valid medical purpose. Bodybuilding, muscle enhancement
or increasing muscle bulk or strength through the use of an anabolic steroid or human growth
hormone by a person who is in good health is not a valid medical purpose.

      (29) Referring a patient to a health care entity for services if the licensee has a significant
investment interest in the health care entity, unless the licensee informs the patient in
writing of such significant investment interest and that the patient may obtain such services
elsewhere.

      (30) Failing to properly supervise, direct or delegate acts which constitute the healing
arts to persons who perform professional services pursuant to such licensee's direction,
supervision, order, referral, delegation or practice protocols.

      (31) Violating K.S.A. 65-6703 and amendments thereto.

      (c) ``False advertisement'' means any advertisement which is false, misleading or
deceptive in a material respect. In determining whether any advertisement is misleading,
there shall be taken into account not only representations made or suggested by statement,
word, design, device, sound or any combination thereof, but also the extent to which the
advertisement fails to reveal facts material in the light of such representations made.

      (d) ``Advertisement'' means all representations disseminated in any manner or by any
means, for the purpose of inducing, or which are likely to induce, directly or indirectly, the
purchase of professional services.

      (e) ``Licensee'' for purposes of this section and K.S.A. 65-2836, and amendments
thereto, shall mean all persons issued a license, permit or special permit pursuant to article
28 of chapter 65 of the Kansas Statutes Annotated.

      (f) ``License'' for purposes of this section and K.S.A. 65-2836, and amendments thereto,
shall mean any license, permit or special permit granted under article 28 of chapter 65 of
the Kansas Statutes Annotated.

      (g) ``Health care entity'' means any corporation, firm, partnership or other business
entity which provides services for diagnosis or treatment of human health conditions and
which is owned separately from a referring licensee's principle practice.

      (h) ``Significant investment interest'' means ownership of at least 10% of the value of
the firm, partnership or other business entity which owns or leases the health care entity,
or ownership of at least 10% of the shares of stock of the corporation which owns or leases
the health care entity.'';

      And by renumbering sections accordingly;

      Also on page 11, in line 24, by striking ``1998'' and inserting ``1999''; also in line 24, after
``65-2836,'' by inserting ``65-2837, 65-2837b,'';

      In the title, in line 13, after the semicolon, by inserting: ``concerning licensure of certain
persons;''; in line 14, by striking ``1998'' and inserting ``1999''; in line 15, after ``65-2836,''
by inserting ``65-2837,''; in line 16, before the period, by inserting: ``; also repealing K.S.A.
1999 Supp. 65-2837b'';

                                                                                          \ And your committee on conference recommends the adoption of this report.

                                                                                    Garry Boston

                                                                                    Gerald G. Geringer

                                                                                    Jerry Henry
 Conferees on the part of House
                                                                                   

                                                                                    Sandy Praeger

                                                                                    Larry D. Salmans

                                                                                    Chris Steineger
 Conferees on part of Senate


   Senator Praeger moved the Senate adopt the Conference Committee Report on SB 190.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 574, submits the following report:

      The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee amendments,
as follows:

      On page 3, in line 9, by striking ``this act'' and inserting ``sections 1 through 4''; also in
line 9, following ``application'' by inserting ``thereof''; by striking lines 12 and 13 and inserting
new material to read as follows:

      ``New Sec.  6. Sections 1 through 5 shall be known as the Kansas discount card deceptive
practice act.

      Sec.  7. K.S.A. 1999 Supp. 40-240 is hereby amended to read as follows: 40-240. (a) Any
person desiring as agent to engage in the insurance business, as herein set out, shall apply
to the commissioner of insurance of this state, in the manner hereinafter prescribed, for an
insurance agent's license, authorizing such agent to engage in and transact such business.
The applicant for such license shall file with the commissioner of insurance such applicant's
written application for a license authorizing the applicant to engage in the insurance business
and the applicant shall make sworn answers to such interrogatories as the commissioner of
insurance may require on uniform forms and supplements prepared by the commissioner.
A nonrefundable fee in the amount of $30 shall accompany such application. Such applicant,
if an individual, shall establish:

      (1) That the applicant certifies, by evidence satisfactory to the commissioner, that the
applicant is a graduate of an accredited four-year high school or its equivalent. This
requirement shall not apply to any person holding a valid agent's license as of July 1, 1971,
or a full-time student enrolled in an accredited high school in this state while and to the
extent such student is participating in an insurance project sponsored by a bona fide junior
achievement program; and

      (2) that the applicant is of good business reputation and is worthy of a license.

      (b) Corporations, associations, partnerships, sole proprietorships and other legal entities
acting as insurance agents and holding a direct agency appointment from an insurance
company or companies or health maintenance organization are required to obtain an
insurance agent's license. Application for such license shall be made to the commissioner
on a form prescribed by such commissioner. Before granting the license, the commissioner
shall determine that:

      (1) Each officer, director, partner and employee of the applicant who is acting as an
insurance agent is licensed as an insurance agent;

      (2) the applicant has disclosed to the insurance department all officers, directors and
partners whether or not they are licensed as insurance agents;

      (3) the applicant has disclosed to the insurance department all officers, directors,
partners and employees who are licensed as insurance agents; and

      (4) the applicant has designated a licensed officer, employee, partner or other person
to be responsible for the organization's compliance with the insurance laws and rules and
regulations of this state.

      (c) The insurance department may require any documents reasonably necessary to
verify the information contained in the application.

      (d)  (1) Agents licensed pursuant to subsection (b) shall advise the commissioner of any
officers, directors, partners or employees who are licensed as individual insurance agents
and are not disclosed at the time application is made for a license within 30 working days
of their affiliation with the licensee. Failure to provide the commissioner with such
information shall subject the licensee to a monetary penalty of $10 per day for each working
day the required information is late subject to a maximum of $50 per person per licensing
year.

      (2) Officers, directors, partners or employees disclosed at the time of the original
application or reported thereafter whose affiliation with the licensee is terminated shall be
reported to the commissioner within 30 days of the effective date of termination. Failure
to report such termination shall subject the licensee to the penalty prescribed in paragraph
(1) of this subsection.

      (e) An applicant whose application for a license is denied shall be given an opportunity
for a hearing in accordance with the provisions of the Kansas administrative procedure act.

      Sec.  8. K.S.A. 1999 Supp. 40-2c01 is hereby amended to read as follows: 40-2c01. As
used in this act:

      (a) ``Adjusted RBC report'' means an RBC report which has been adjusted by the
commissioner in accordance with K.S.A. 1999 Supp. 40-2c04, and amendments thereto.

      (b) ``Corrective order'' means an order issued by the commissioner specifying corrective
actions which the commissioner has determined are required to address a RBC level event.

      (c) ``Domestic insurer'' means any insurance company or risk retention group which is
licensed and organized in this state.

      (d) ``Foreign insurer'' means any insurance company or risk retention group not
domiciled in this state which is licensed or registered to do business in this state pursuant
to article 41 of chapter 40 of the Kansas Statutes Annotated or K.S.A. 40-209, and
amendments thereto.

      (e) ``NAIC'' means the national association of insurance commissioners.

      (f) ``Life and health insurer'' means any insurance company licensed under article 4 or
5 of chapter 40 of the Kansas Statutes Annotated or a licensed property and casualty insurer
writing only accident and health insurance.

      (g) ``Property and casualty insurer'' means any insurance company licensed under
articles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the Kansas Statutes Annotated, but shall
not include monoline mortgage guaranty insurers, financial guaranty insurers and title
insurers.

      (h) ``Negative trend'' means, with respect to a life and health insurer, a negative trend
over a period of time, as determined in accordance with the ``trend test calculation'' included
in the RBC instructions defined in subsection (j).

      (i) ``RBC'' means risk-based capital.

      (j) ``RBC instructions'' mean the risk-based capital instructions promulgated by the
NAIC, which are in effect on December 31, 1998 1999, and adopted as rules and regulations
by the commissioner.

      (k) ``RBC level'' means an insurer's company action level RBC, regulatory action level
RBC, authorized control level RBC, or mandatory control level RBC where:

      (1) ``Company action level RBC'' means, with respect to any insurer, the product of 2.0
and its authorized control level RBC;

      (2) ``regulatory action level RBC'' means the product of 1.5 and its authorized control
level RBC;

      (3) ``authorized control level RBC'' means the number determined under the risk-based
capital formula in accordance with the RBC instructions; and

      (4) ``mandatory control level RBC'' means the product of .70 and the authorized control
level RBC.

      (l) ``RBC plan'' means a comprehensive financial plan containing the elements specified
in K.S.A. 1999 Supp. 40-2c06, and amendments thereto. If the commissioner rejects the
RBC plan, and it is revised by the insurer, with or without the commissioner's
recommendation, the plan shall be called the ``revised RBC plan.''

      (m) ``RBC report'' means the report required by K.S.A. 1999 Supp. 40-2c02, and
amendments thereto.

      (n) ``Total adjusted capital'' means the sum of:

      (1) An insurer's capital and surplus or surplus only if a mutual insurer; and

      (2) such other items, if any, as the RBC instructions may provide.

      (o) ``Commissioner'' means the commissioner of insurance.

      New Sec.  9. As used in this act:

      (a) ``Attorney-in-fact'' means the person designated and authorized by subscribers as
having authority to obligate them on reciprocal insurance contracts.

      (b) ``Commissioner'' means the commissioner of insurance.

      (c) ``Person'' means any association, aggregate of individuals, business, company,
corporation, individual, joint-stock company, Lloyds-type of organization, organization,
cooperative, partnership, receiver, trustee or society, with power to enter into contractual
undertakings within or without the state.

      (d) ``Reciprocal'' means an aggregation of subscribers under a common name.

      (e) ``Reciprocal insurance'' means insurance resulting from the mutual exchange of
insurance contracts among persons in an unincorporated association under a common name
through an attorney-in-fact having authority to obligate each person both as insured and
insurer.

      (f) ``Subscriber'' means a person obligated under a reciprocal insurance agreement.

      New Sec.  10. Every reciprocal shall have and use a business name that includes the
word ``reciprocal,'' ``interinsurer,'' ``interinsurance,'' ``exchange,'' ``underwriters'' or
``underwriting.'' The name of the reciprocal shall not be so similar to any other name or
title previously adopted by a similar organization, or by any other insurance company or
association, as in the opinion of the commissioner of insurance is calculated to result in
confusion or deception.

      New Sec.  11. The board of directors exercising the subscribers' rights in a domestic
reciprocal shall be selected under rules adopted by the subscribers. At least 3/4 of the board
of directors of a domestic reciprocal shall be composed of subscribers or representatives of
subscribers, other than the attorney-in-fact or any person employed by, representing or
having a financial interest in the attorney-in-fact. An individual shall not be considered to
be employed by, representing or having a financial interest in the attorney-in-fact if such
individual is a subscriber or a representative of a subscriber of the reciprocal. The board of
directors shall supervise the finances of the reciprocal and the reciprocal's operations to the
extent required to assure their conformity with the subscriber's agreement and power of
attorney and shall exercise any other powers conferred on it by the subscriber's agreement.
The board of directors may also be referred to as a subscribers advisory committee, board
of trustees or by such other name as the board chooses.

      New Sec.  12. (a) Every subscriber of a domestic reciprocal may execute a subscriber's
agreement and power of attorney setting forth the rights, privileges and obligations of the
subscriber as an underwriter and as a policyholder, and the powers and duties of the
attorney-in-fact. If a domestic reciprocal does not require execution of a subscriber's
agreement and power of attorney, the reciprocal shall include on its policies a statement
that the subscriber shall be bound by the terms and conditions of the then current
subscriber's agreement and power of attorney on file with the attorney-in-fact and the
commissioner of insurance, and each subscriber shall by operation of law be bound by such
subscriber's agreement and power of attorney as if individually executed. Without additional
execution, notice or acceptance, every subscriber of a reciprocal agrees to be bound by any
modification of the terms of the power of attorney and subscriber's agreement which is
jointly made by the attorney-in-fact and the board of directors pursuant to K.S.A. 40-1616,
and amendments thereto, and which shall be on file with the attorney-in-fact and the
commissioner of insurance. The subscriber's agreement and power of attorney shall contain
in substance the following provisions:

      (1) A designation and appointment of the attorney-in-fact to act for and bind the
subscriber in all transactions relating to or arising out of the operations of the reciprocal;

      (2) a provision empowering the attorney-in-fact:

      (A) To accept service of process on behalf of the reciprocal; and

      (B) to appoint the commissioner as an agent of the reciprocal upon whom may be served
all lawful process against or notice to the reciprocal; and

      (3) the maximum amount to be deducted from advance premiums or deposits to be
paid the attorney-in-fact, and the items of expense, in addition to losses, to be paid by the
reciprocal.

      (b) The subscriber's agreement may:

      (1) Provide for the right of substitution of the attorney-in-fact and revocation of the
power of attorney;

      (2) impose any restrictions upon the exercise of the power agreed upon by the
subscribers;

      (3) provide for the exercise of any right reserved to the subscribers directly or through
the board of directors; or

      (4) contain other lawful provisions deemed to be advisable.

      New Sec.  13. Any modification of the terms of the power of attorney and subscriber's
agreement of a domestic reciprocal shall be made jointly by the attorney-in-fact and the
board of directors. Any such modification shall be filed with the attorney-in-fact and the
commissioner of insurance. By operation of law any such filing shall bind all subscribers the
same as if each subscriber individually had adopted and executed the modified, altered or
amended subscriber's agreement and power of attorney. No modification shall be effective
retroactively, nor shall such modification affect any insurance contract issued prior to the
date of such modification.

      New Sec.  14. A reciprocal may return to its subscribers any savings or credit which
accrues to such subscriber's accounts.

      New Sec.  15. Upon the liquidation of a domestic reciprocal, the assets remaining after
discharge of its indebtedness and policy obligations, the return of any contributions of the
attorney-in-fact or any other person made as provided in K.S.A. 40-1606, and amendments
thereto, and the return of any unused deposits, savings or credits, shall be distributed. The
distribution shall be made to the persons who were its subscribers within the 12 months
prior to the final termination of such reciprocal's license in accordance with a formula
approved by the commissioner of insurance or the court.

      New Sec.  16. No reciprocal shall issue any assessable insurance policies. The subscribers
of a reciprocal shall not be personally liable for the payment of the reciprocal's debts or
obligations. Any judgment against a reciprocal shall be binding only upon the reciprocal and
not upon each of the reciprocal's subscribers.

      Sec.  17. K.S.A. 40-1601 is hereby amended to read as follows: 40-1601. Individuals,
partnerships and corporations Persons of this state, hereby designated subscribers, are
hereby authorized to exchange reciprocal or interinsurance contracts with each other, or
with individuals, partnerships and corporations persons of other states and countries,
providing indemnity among themselves from any loss which may be the subject of legal
insurance, excepting life insurance.

      Sec.  18. K.S.A. 40-1602 is hereby amended to read as follows: 40-1602. Such Reciprocal
insurance contracts may be executed by an attorney in fact, herein designated attorney
attorney-in-fact, duly authorized and acting for such the subscribers of a reciprocal, and
such attorney attorney-in-fact may be a corporation. The office or offices of such attorney
attorney-in-fact may be maintained at such place or places as may be designated by the
subscribers in the power of attorney. Such contracts and the exchange thereof and such
subscribers, their attorneys and representatives shall be regulated by this article and by no
other law relating to insurance unless such law is referred to in this article, and no law
hereafter enacted shall apply to them unless they be expressly designated therein.

      Sec.  19. K.S.A. 40-1603 is hereby amended to read as follows: 40-1603. Such attorney
(a) The attorney-in-fact of a domestic reciprocal shall file with the commissioner of
insurance of this state a declaration verified by the oath of such attorney attorney-in-fact,
or when such attorney attorney-in-fact is a corporation by the oath of a chief officer thereof,
setting forth:

      (a) (1) The name of the attorney attorney-in-fact, and the name or title of the office
under which such contracts are to be issued. Said name or title shall not be so similar to
any other name or title previously adopted by a similar organization, or by any insurance
company or association, as in the opinion of the commissioner of insurance is calculated to
result in confusion or deception. The office or offices through which such indemnity
contracts shall be exchanged shall be classified as reciprocal or interinsurance exchanges of
the domestic reciprocal.

      (b) (2) The kind or kinds of insurance to be effected or exchanged.

      (c) A copy of the form of policy contract or agreement under or by which such insurance
is to be effected or exchanged and which comprises the standard provisions, as provided in
the law of this state. Such contract or agreement shall, in lieu of complying with the language
and form prescribed, be held to conform thereto in substance if such contract or agreement
includes a provision or endorsement reciting that the policy shall be construed as if in the
language and form prescribed by law. The attorney may insert in the policy prescribed by
the laws of this state any provision or condition which is required by the plan of reciprocal
or interinsurance.
      (d) (3) A copy of the form of power of attorney and subscriber's agreement or other
authority of such attorney attorney-in-fact under which such insurance is to be effected or
exchanged.

      (e) (4) The location of the office or offices from which such contracts or agreements
are to be issued.

      (f) (5) That except as to the kinds of insurance hereinafter specifically mentioned in this
subdivision, applications shall have been made for indemnity upon at least one hundred 100
separate risks aggregating not less than one and one-half million dollars $1,500,000,
represented by executed contracts or bona fide applications to become concurrently
effective. In the case of employers' liability or workmen's workers compensation insurance,
applications shall have been made for indemnity upon at least one hundred 100 separate
risks, covering a total annual payroll of not less than two and one-half million dollars
$2,500,000, as represented by executed contracts or bona fide applications to become
concurrently effective. In the case of automobile insurance, applications shall have been
made for indemnity upon at least one thousand motor vehicles, represented by executed
contracts or bona fide applications to become concurrently effective on any or all classes of
automobile insurance effected by such subscribers through said attorney.

      (g) (6) That there is in the possession of such attorney attorney-in-fact, and available
for the payment of losses, assets conforming to the requirements of section 40-1605 hereof
K.S.A. 40-1605 and amendments thereto.

      (h) (7) A financial statement in form prescribed for the annual statement.

      (i) (8) An instrument authorizing service of process as provided in this article.

      (b) No declaration shall be required under this section for any reciprocal organized in
this state as a result of a conversion under the provisions of K.S.A. 40-1620 and amendments
thereto.

      Sec.  20. K.S.A. 40-1604 is hereby amended to read as follows: 40-1604. There shall be
filed with the commissioner of insurance of this state a statement under oath by the attorney
attorney-in-fact giving the maximum amount of indemnity upon any single risk, and such
attorney shall attorney-in-fact, whenever and as often as he such attorney-in-fact shall be
required, shall file with the commissioner of insurance a statement verified by his such
attorney-in-fact's oath, to the effect that the exchange reciprocal has not assumed on any
one risk an amount greater than ten (10) percentum 10% of its surplus, unless the excess
shall be reinsured (1) in some other insurance company duly authorized to transact similar
business in this state or as otherwise provided in the insurance code; or (2) as provided by
the laws of the state in which the principal office of the attorney reciprocal is located.

      Sec.  21. K.S.A. 40-1605 is hereby amended to read as follows: 40-1605. There shall be
maintained at all times, unearned premiums or (a) At all times, each reciprocal shall maintain
the same unearned premium and loss or claim reserves, in cash or securities authorized by
the laws of the state in which the principal office of the attorney is located, for the investment
of similar funds of insurance companies doing the same kind of business, in an amount equal
to a pro rata amount of the premium or deposits collected from subscribers on all unexpired
risks. In addition to the assets previously provided in this section there shall also be
maintained as a claim or loss reserve, cash or such securities sufficient to discharge all
liability on all outstanding losses arising under policies issued, the same to be calculated in
accordance with the laws of the state relating to similar reserves for companies insuring
similar risks. Any reciprocal exchange the reciprocal is domiciled, as required for domestic
stock and mutual companies writing the same classes of insurance.
      (b) No reciprocal shall be licensed to transact the business of insurance in this state
unless such reciprocal shall have and maintain a surplus equal to the capital and surplus
required of a domestic stock insurance company transacting the same kinds of insurance
and may provide for the issuance of a nonassessable policy. Any reciprocal exchange issuing
nonassessable policies

      (c) Each reciprocal shall have lawful securities on deposit, for the protection of all
subscribers or creditors, or both, of the exchange reciprocal, with the department of
insurance of this or any other state in the United States in an amount equal to the minimum
capital stock required of a domestic stock insurance company transacting the same kinds of
insurance. Until May 1, 1989, companies which were authorized to do business in Kansas
after January 1, 1969, but before January 1, 1984, shall be required to have surplus and
deposit equal to that which was required by this section prior to the passage of this act.
After May 1, 1989, such companies shall comply with the paid-up capital stock, surplus and
deposit requirements provided by this act.
      Until May 1, 1989, companies doing business in this state on January 1, 1969, shall be
required to have a surplus and deposit equal to that required of such companies prior to
the passage of this act. On and after May 1, 1989, companies doing business in this state on
January 1, 1969, shall be required to have a surplus and deposit equal to that required of
all other companies to whom this section applies immediately prior to the passage of this
act.
      On and after May 1, 1994, companies doing business in this state on January 1, 1969,
shall comply with the surplus and deposit requirements provided by this act.
      No reciprocal exchange shall issue any assessable insurance policies.

      Sec.  22. K.S.A. 40-1606 is hereby amended to read as follows: 40-1606. If at any time
it appears that the amount of funds required in section 40-1605 K.S.A. 40-1605, and
amendments thereto, has not been accumulated or maintained, then the subscribers or their
attorney for them shall immediately advance such sums as are needed to comply with the
provisions of this section, and the attorney-in-fact or any other interested party may advance
to a reciprocal any funds required in such reciprocal's operations. The funds so advanced
shall not be treated as a liability at the exchange, and shall not be withdrawn of the reciprocal
and interest shall not be paid or funds repaid except with the approval of the supervising
insurance official of the state wherein the exchange is domiciled, and such advances in which
the reciprocal is domiciled. Any such advance and interest shall be repaid only out of the
surplus funds of the exchange reciprocal.

      Sec.  23. K.S.A. 40-1607 is hereby amended to read as follows: 40-1607. Concurrently
with the filing of the declaration provided for by the terms of K.S.A. 40-1603 and any
amendments thereto, the attorney attorney-in-fact shall file with the commissioner of
insurance an instrument in writing, executed by him such attorney-in-fact for the subscribers
reciprocal conditioned that upon the issuance of the certificate of authority provided for in
K.S.A. 40-1610, and amendments thereto, service of process may be had upon the
commissioner of insurance in all suits in this state arising out of such policies, contracts or
agreements, which service shall be valid and binding upon all subscribers exchanging at any
time reciprocal or interinsurance contracts through such attorney. Three copies of such
process shall be served, accompanied by a fee of three dollars, and shall require the
defendant to answer by a certain day, not less than forty days from its date, and the
commissioner of insurance shall file one copy, forward one copy to the said attorney, and
return one copy with his admission of service. Subscribers of any reciprocal or interinsurance
exchange the reciprocal. Such service of process shall be executed in accordance with the
provisions of K.S.A. 40-218 and amendments thereto. Any reciprocal operating under the
laws of this state may sue or be sued in the declared name of such exchange the reciprocal.

      Sec.  24. K.S.A. 40-1608 is hereby amended to read as follows: 40-1608. The attorney
in fact attorney-in-fact of a reciprocal, or any employee having the care and handling of the
funds and securities of any reciprocal exchange a reciprocal, shall give maintain a good and
sufficient bond running to the governing committee board of directors of the reciprocal
conditioned for the faithful accounting and disbursement of all money that may come into
his such attorney-in-fact's or employee's hands; such bond may be executed by a surety
company or may be a personal bond approved by the commissioner of insurance of the state
where such exchange is domiciled; and such bond to. Such bond shall be in an amount fixed
in an amount and to be approved by the advisory committee board of directors or other
governing body of such exchange reciprocal. In lieu of filing the bond, the attorney-in-fact
may maintain on deposit with the commissioner an equivalent amount in approved securities
which are subject to the same conditions as the bond.

      Sec.  25. K.S.A. 40-1610 is hereby amended to read as follows: 40-1610. Each attorney
by whom or through whom are issued any policies of or contracts for indemnity of the
character specified in this article reciprocal shall procure from the commissioner of
insurance annually a certificate of authority, stating that all of the requirements of this article
have been complied with, and upon. Upon such compliance and the payment of the fees
required by this article, the commissioner of insurance shall issue such certificate of
authority. The commissioner of insurance may revoke or suspend any certificate of authority
issued hereunder in case of breach of any of the conditions imposed by this article after
reasonable notice has been given said attorney, to the reciprocal in writing, so that he such
reciprocal may appear and show cause why such action should not be taken. Any attorney
who may have procured a certificate of authority hereunder may renew such certificate
annually thereafter: Provided, however, That any The certificate of authority shall continue
in full force and effect until such certificate is suspended or revoked or the a new certificate
of authority be is issued or specifically refused.

      Sec.  26. K.S.A. 40-1611 is hereby amended to read as follows: 40-1611. Such attorney
Each reciprocal shall pay to the commissioner of insurance levies and taxes in the amount
and as specified in K.S.A. 40-252, 40-1703, 40-1704 and 75-1508, and amendments thereto.
The premium taxes which are set out in subsection 3, of subsection B, of K.S.A. 40-252 ,
for mutual insurance companies organized under the laws of any other state, territory or
country writing similar lines of insurance, shall be applicable to such attorney-in-fact of a
reciprocal or interinsurance exchange doing business or seeking authority to do business in
this state. All such levies and taxes on premiums shall be applicable to premiums received
on or after January 1, 1957. The above fees, levies and taxes shall be in lieu of all license
fees and taxes of whatever character in this state and such attorney-in-fact in calculating all
such levies and taxes such reciprocal shall be permitted to deduct therefrom premiums
returned on account of cancellations, all premiums received for reinsurance from any other
company authorized to do business in this state, and savings paid or credited to subscriber
policyholders.

      Sec.  27. K.S.A. 40-1612 is hereby amended to read as follows: 40-1612. In addition to
the laws hereinbefore referred to in provisions of this article, the requirements and
provisions set out forth in the following sections of articles 2 and 20 of the Kansas Statutes
Annotated, or any and amendments thereto, which govern other types of insurance
companies shall apply to reciprocal or interinsurance exchanges reciprocals to the extent
that such provisions do not conflict with the provisions of this article: Sections 40-208, 40-
209, 40-214, 40-215, 40-216, 40-218, 40-220, 40-221 40-221a, 40-222, 40-223, 40-224, 40-
225, 40-226, 40-227, 40-228, 40-229, 40-229a, 40-231, 40-233, 40-234, 40-234a, 40-235, 40-
236, 40-237, 40-238, 40-239, 40-240, 40-241, 40-242, 40-243, 40-244, 40-245, 40-246 except
as to contracts written through traveling salaried representatives to whom no commissions
are paid, 40-246a, 40-247, 40-248, 40-249, 40-250, 40-251, 40-253, 40-254, 40-256, 40-281,
40-2,125, 40-2,126, 40-2,127, 40-2,128, 40-2,156, 40-2,156a, 40-2,157, 40-2,159, 40-952,
40-2001, 40-2002, 40-2003, 40-2004, 40-2005 and 40-2006. All of the requirements,
provisions and regulations set out in the foregoing sections of articles 2 and 20 and which
apply to insurance companies are hereby made to apply to reciprocal or interinsurance
exchanges and such reciprocal or interinsurance exchanges shall comply with and be
governed and regulated by the provisions of such foregoing sections, 40-2006 and 40-2404
and article 2a of the Kansas statutes annotated, and amendments thereto, and any other
provision of law pertaining to insurance which specifically refers to reciprocals.

      Sec.  28. K.S.A. 40-1613 is hereby amended to read as follows: 40-1613. Reciprocal or
interinsurance exchanges may, pursuant to Under authority given by the commissioner of
insurance, a reciprocal may engage in the business of writing fidelity and surety bonds but
only upon the condition that such reciprocal or interinsurance exchange shall have and
maintain a an amount of surplus equal to the total of capital and surplus required of domestic
stock insurance companies transacting the same kind of business and any such reciprocal or
interinsurance exchange shall be deemed a stock insurance company for the purposes of
sections K.S.A. 40-214, 40-239 to 40-247, both sections inclusive, 40-252, 40-1107 and 40-
1108 of the Kansas Statutes Annotated or any and amendments thereto. No fidelity or surety
bond shall be issued by any such reciprocal or interinsurance exchange until the form thereof
of such bond shall have been submitted to and accepted by the commissioner of insurance.
Any fidelity or surety bonds executed pursuant to this act shall be received and accepted as
company, corporation or corporate bonds.

      Sec.  29. K.S.A. 1999 Supp. 40-1620 is hereby amended to read as follows: 40-1620. (a)
Any insurance company may convert to a Kansas insurance reciprocal in accordance with a
plan for the conversion of the insurance company into an insurance reciprocal filed with
and approved by the commissioner.

      (b) The commissioner may establish reasonable requirements and procedures for the
submission and approval of a conversion plan authorized by subsection (a).

      (c) No conversion plan shall be approved under this section unless such conversion plan
includes:

      (1) A provision for the conversion of existing stockholder or policyholder interests in
the insurance company into reciprocal or exchange subscriber interests in the insurance
reciprocal so that each subscriber's interest in the resulting Kansas insurance reciprocal shall
be fairly proportionate to such subscriber's interest in the insurance company;

      (2) a provision for the amendment of the insurance company's existing articles of
incorporation or other chartering document to a subscriber's agreement which complies
with the provisions of K.S.A. 40-1602 and 40-1603, 40-1603 and section 12 and amendments
thereto;

      (3) a copy of the proposed subscriber's agreement;

      (4) proof of the approval or adoption of the conversion plan by not less than 75% 2/3 of
the shares or policyholders entitled to vote, represented either in person or by proxy, at a
duly called regular or special meeting of the stockholders or policyholders of the insurance
company at which a quorum, as determined by the bylaws or other chartering documents
of the insurance company, is present:;

      (5) a transition plan for the change of governance of the insurance company from the
board of directors and officer structure of the insurance company to the insurance reciprocal
which shall be governed by article 16 of chapter 40 of the Kansas Statutes Annotated and
amendments thereto; and

      (6) any other information required by the commissioner.

      (d) The commissioner shall approve the conversion plan if the commissioner finds that
the proposed conversion will:

      (1) Not be detrimental to the interests of the stockholders or policyholders of the
insurance company;

      (2) not be detrimental to the interests of the state of Kansas; and

      (3) not render the insurer incapable of fulfilling the insurer's contractual obligations.

      (e) Upon approval of a conversion plan under this section, the commissioner shall issue
a new or amended certificate of authority, which shall be deemed to be the final act of
conversion at which time the insurance company shall concurrently become an insurance
reciprocal. The insurance reciprocal shall be deemed to be a continuation of the insurance
company and deemed to have been organized at the time the converted insurance company
was organized.

      (f) Each insurance reciprocal created pursuant to this section shall comply with all
provisions of K.S.A. 40-1612, and amendments thereto.

      (g) Any conversion of an insurance company to a reciprocal shall not be subject to the
provisions of K.S.A. 40-3304, and amendments thereto.

      (h) For the purposes of this section:
      (1) ``Commissioner'' means the commissioner of insurance.
      (2), ``insurance company'' means a stock or mutual insurance company.
      (3) ``Insurance reciprocal'' means a reciprocal or interinsurance exchange established to
exchange reciprocal or interinsurance contracts with subscribers to provide indemnity
among themselves.

      Sec.  30. K.S.A. 1999 Supp. 40-1622 is hereby amended to read as follows: 40-1622.
The provisions of K.S.A. 1999 Supp. 40-1620 and 40-1621, and sections 9, 10, 11, 12, 13,
14, 15 and 16 and amendments thereto, shall be supplemental to article 16 of chapter 40
of the Kansas Statutes Annotated and amendments thereto.

      Sec.  31. K.S.A. 1999 Supp. 40-3502 is hereby amended to read as follows: 40-3502. As
used in this act the following terms shall have the meanings respectively ascribed to them
herein:

      (a) ``Mortgage guaranty insurance company'' means any corporation, company,
association, reciprocal exchange, persons or partnerships writing contracts of mortgage
guaranty insurance and shall be governed by the provisions of this act and the other
provisions of chapter 40 of the Kansas Statutes Annotated applicable to companies organized
or operating under the provisions of K.S.A. 40-1101 et seq., and amendments thereto, to
the extent such other provisions are not inconsistent with the requirements of this act.

      (b) ``Mortgage guaranty insurance'' means and includes: (1) Insurance against financial
loss by reason of nonpayment of principal, interest or other sums agreed to be paid under
the terms of any note or bond or other evidence of indebtedness secured by a mortgage,
deed of trust, or other instrument constituting a lien or charge on real estate, when the
improvement on such real estate is a residential building or a condominium or townhouse
unit or buildings designed for occupancy by not more than four families;

      (2) insurance against financial loss by reason of nonpayment of principal, interest or
other sums agreed to be paid under the terms of any note or bond or other evidence of
indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien
or charge on real estate, when the improvement on such real estate is a building or buildings
designed for occupancy by five or more families or designed to be occupied for industrial
or commercial purposes; or

      (3) insurance against financial loss by reason of nonpayment of rent or other sums
agreed to be paid under the terms of a written lease for the possession, use or occupancy
of real estate, when the improvement on such real estate is a building or buildings designed
to be occupied for industrial or commercial purposes.

      (c) ``Authorized real estate security'' means an amortized note, bond or other evidence
of indebtedness, not exceeding (97%) (100%) of the fair market value of the real estate,
secured by a mortgage, deed of trust, or other instrument which constitutes, or is equivalent
to, a first lien or charge on real estate, when: (1) The real estate loan secured in such manner
is one of a type which a bank, savings and loan association, or an insurance company, which
is supervised and regulated by a department of this state or an agency of the federal
government, is authorized to make, or would be authorized to make, disregarding any
requirement applicable to such an institution that the amount of the loan not exceed a
certain percentage of the value of the real estate;

      (2) the improvement on such real estate is a building or buildings designed for
occupancy as specified by paragraphs (1) or (2) of subsection (b); and

      (3) the lien on such real estate may be subject to and subordinate to the following:

      (i) The lien of any public bond, assessment or tax, when no installment, call or payment
of or under such bond, assessment or tax is delinquent; and

      (ii) outstanding mineral, oil, water or timber rights, rights-of-way, easements or rights-
of-way of support, sewer rights, building restrictions or other restrictions or covenants,
conditions or regulations of use, or outstanding leases upon such real property under which
rents or profits are reserved to the owner thereof.

      (d) ``Contingency reserve'' means an additional premium reserve established to protect
policyholders against the effect of adverse economic cycles.

      (e) ``Single risk'' means the insurance provided with respect to each separate loan or
lease covered by an individual policy of mortgage guaranty insurance or an individual
certificate issued pursuant to K.S.A. 40-3511, and amendments thereto.

      Sec.  32. K.S.A. 40-1601, 40-1602, 40-1603, 40-1604, 40-1605, 40-1606, 40-1607, 40-
1608, 40-1610, 40-1611, 40-1612, 40-1613 and 40-1614 and K.S.A. 1999 Supp. 40-240, 40-
2c01, 40-1620, 40-1622 and 40-3502 are hereby repealed.

      Sec.  33. This act shall take effect and be in force from and after its publication in the
statute book.'';

      In the title, in line 11, after ``cards'', by inserting ``; relating to licensure of agents; relating
to risk-based capital requirements; relating to reciprocal insurance companies; relating to
mortgage insurance guaranty companies; amending K.S.A. 40-1601, 40-1602, 40-1603, 40-
1604, 40-1605, 40-1606, 40-1607, 40-1608, 40-1610, 40-1611, 40-1612 and 40-1613 and
K.S.A. 1999 Supp. 40-240, 40-2c01, 40-1620, 40-1622 and 40-3502 and repealing the existing
sections; also repealing K.S.A. 40-1614'';

                                                                                    \ And your committee on conference recommends the adoption of this report.

                                                                                    Robert Tomlinson

                                                                                    Don Myers

                                                                                    Eber Phelps
 Conferees on the part of House
                                                                                   

                                                                                    Don Steffes

                                                                                    Sandy Praeger

                                                                                    Paul Feleciano, Jr.
 Conferees on part of Senate


   Senator Steffes moved the Senate adopt the Conference Committee Report on SB 574.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2017, submits the following report:

      The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:

      On page 8, after line 11, by inserting the following:

      ``New Sec.  6. (a) Any research foundation is authorized to initiate and complete capital
improvement projects on state-owned property of the state educational institution that the
research foundation is organized and operated to benefit if the capital improvement projects
have received prior approval by the state board of regents and the plans and specifications
for such capital improvement projects have received prior approval by the secretary of
administration. Each such capital improvement project shall be totally financed from
nonstate moneys of the research foundation. The buildings and facilities constructed and
the repairs, remodeling and renovations of state buildings and facilities conducted under
such capital improvement projects shall become the property of the state of Kansas upon
completion and acceptance by the secretary of administration. No such capital improvement
project shall be approved by the state board of regents without having first advised and
consulted with the joint committee on state building construction.

      (b) As used in this section:

      (1) ``Capital improvement project'' means a project to construct one or more buildings
or facilities for a state educational institution or to repair, remodel or renovate one or more
state buildings or facilities of a state educational institution and, in any such case, which has
a total cost of $1,000,000 or less;

      (2) ``research foundation'' means any not-for-profit research foundation organized and
operated for the primary purpose of encouraging, fostering and conducting scholarly
investigation and other types of research for the benefit of a state educational institution;

      (3) ``nonstate moneys'' means moneys received from any source except the state of
Kansas or any agency thereof; and

      (4) ``state educational institution'' has the meaning ascribed thereto by K.S.A. 76-711
and amendments thereto.

      Sec.  7. K.S.A. 76-833 is hereby amended to read as follows: 76-833. (a) As used in this
act: section,

      (1) ``Capital improvement project'' means a project which has a total cost of $500,000
$1,000,000 or less.;

      (2) ``private moneys'' means moneys from nongovernmental sources.; and
      (3) ``state educational institution'' has the meaning ascribed thereto by K.S.A. 76-711
and amendments thereto.
      (b) The university of Kansas medical center Each state educational institution is
authorized to construct buildings and facilities on state-owned property of the university of
Kansas medical center state educational institution from private moneys granted or given
to such institution if the capital improvement projects for such buildings and facilities have
received prior approval by the state board of regents and the plans and specifications for
such projects have received prior approval by the secretary of administration. Such capital
improvement projects shall be inspected by the division of architectural services. Such
capital improvement projects financed totally from private moneys shall be exempt from
the provisions of K.S.A. 75-3739, 75-3740, 75-3740a, 75-3741, 75-3741a, 75-3741b, 75-3742,
75-3743 and 75-3744, and amendments thereto. Such capital improvement projects shall
be totally financed from private moneys and the buildings and facilities constructed shall
become the property of the state of Kansas upon completion and acceptance by the secretary
of administration. No such capital improvement project for a building or facility shall be
approved by the state board of regents without having first advised and consulted with the
joint committee on state building construction.

      (c) The university of Kansas medical center Each state educational institution is
authorized to repair, remodel or renovate state buildings and facilities of the university of
Kansas medical center state educational institution from private moneys granted or given
to such institution if the capital improvement projects for such repairs, remodeling or
renovations have received prior approval by the state board of regents and the plans and
specifications of such projects have received prior approval by the secretary of
administration. Such capital improvement projects shall be inspected by the division of
architectural services. Such capital improvement projects financed totally from private
moneys shall be exempt from the provisions of K.S.A. 75-3739, 75-3740, 75-3740a, 75-3741,
75-3741a, 75-3741b, 75-3742, 75-3743 and 75-3744, and amendments thereto. Such capital
improvement projects shall be totally financed from private moneys and the improvements
shall become the property of the state of Kansas upon completion and acceptance by the
secretary of administration. No such capital improvement project to repair, remodel or
renovate any such state building or facility shall be approved by the state board of regents
without having first advised and consulted with the joint committee on state building
construction.

      (d) The provisions of this section shall expire on June 30, 2001.'';

      And renumbering remaining sections accordingly;

      On page 8, in line 12, by striking ``and'' and inserting a comma; in line 13, after ``3352'',
by inserting ``and 76-833'';

      On page 1, in the title, in line 21, by striking the first ``and'' and inserting ``, 75-3351,'';
in line 22, before ``repealing'', by inserting ``76-833 and'';

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Nick Jordan

                                                                                    Stephen R. Morris

                                                                                    Janis K. Lee
 Conferees on the part of Senate
                                                                                   

                                                                                    David Adkins

                                                                                    Melvin J. Neufeld

                                                                                    Rocky Nichols
 Conferees on part of House


   Senator Jordan moved the Senate adopt the Conference Committee Report on HB 2017.

 On roll call, the vote was: Yeas 38, Nays 2, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Clark, Corbin, Donovan, Downey, Emert,
Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley, Jones, Jordan,
Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson, Salisbury,
Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

 Nays: Brownlee, Huelskamp.

 The Conference Committee report was adopted.

INTRODUCTION OF ORIGINAL MOTIONS AND SENATE RESOLUTIONS
 Senators Oleen, Corbin and Lee introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1850--

A  RESOLUTION congratulating and commending Kansas State University Goldwater
scholarship winners.
      WHEREAS,  Four students at Kansas State University, Stephanie Russell, Jacob Taussig,
Brandon Grossardt, and Christopher Keller, were nominated to receive Goldwater
scholarships, and all four were selected to receive a scholarship. Commencing with the Fall
2000 semester, this prestigious scholarship provides $7,500 a year for college expenses until
graduation for the selected winners; and

      WHEREAS,  These Kansas State University students were among the 309 students
nationwide picked to win a scholarship from a total of 1,176 mathematics, science and
engineering students; and

      WHEREAS,  Stephanie Russell, Manhattan, is a sophomore in biology, biochemistry and
chemical science. Her parents are Phil and Jackie Russell; and

      WHEREAS,  Jacob Taussig, Manhattan, is a junior in biochemistry and chemical science.
His parents are Mark and Susan Taussig; and

      WHEREAS,  Brandon Grossardt, Claflin, is a junior in mathematics. His parents are
Roger and Connie Grossardt; and

      WHEREAS,  Christopher Keller, Douglass, is a junior in microbiology, international
studies and premedicine. His parents are James and Sherry Keller; and

      WHEREAS,  Kansas State University students have won 40 Goldwater scholarships since
the program began in 1989. Kansas State University is ranked first in the nation among
public universities in the number of Goldwater winners. Among all colleges and universities
in the nation, only Princeton, with 43 winners and Harvard, with 41, have produced more
Goldwater scholars: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we congratulate and commend
these Kansas State University students, all Kansans, upon winning Goldwater scholarships
and note with pride the success of Kansas State University in this endeavor; and

      Be it further resolved: That the Secretary of the Senate be directed to provide five
enrolled copies of this resolution to Dr. Jon Wefald, President, Kansas State University, 110
Anderson Hall, Manhattan, Kansas 66508-7083.

 On emergency motion of Senator Oleen SR 1850 was adopted unanimously.

   Senator Hensley introduced the following Senate resolution, which was read:

SENATE RESOLUTION No. 1851--

A  RESOLUTION in memory of Bishop I.B. Brown.
      WHEREAS,  Bishop I.B. Brown, a fixture in the Topeka religious community, died
Saturday, March 18, 2000, at a Topeka hospital. He was 100 years old; and

      WHEREAS,  Bishop Brown, who was born in Arkansas and grew up in the Methodist
Church, joined the Church of God in Christ in 1925. He began preaching in 1926 and in
1927 became the pastor for churches in Bonner Springs and Kansas City. He came to Topeka
in 1936 to be the pastor of Topeka's First Church of God in Christ. In 1967 he became a
bishop overseeing the activities of about 25 churches in Kansas while continuing as pastor
of the Topeka church. He stated he had an urge, a calling, and knew when he was 12 or 13
he would be a preacher. Over 80 years later he exclaimed there was no retirement from the
army he had joined; and

      WHEREAS,  Bishop Brown had the voice of a preacher. His voice could swell with
volume and then go soft and quiet. As a member of his congregation stated, ``He's not just
talking. He's preaching.''; and

      WHEREAS,  Bishop Brown was the youngest of four boys born to Lee and Sally Brown.
He recalled a joyous childhood filled with church, school and playing baseball. He was a
pitcher and stated he had a ``terrible'' sinker pitch; and

      WHEREAS,  Bishop Brown stated he had never experienced prejudice. His message was
to get along with other people and to do what is right; and

      WHEREAS,  Bishop Brown's first wife, Charlie, died in 1974 after 56 years of marriage,
his second wife, Naomi, died in 1994 after 18 years of marriage and his third wife, Avalon,
survives: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we honor the life of I.B. Brown
and express our appreciation for his many years of service as a minister and bishop for the
Church of God in Christ; and

      Be it further resolved: That the Secretary of the Senate be directed to send an enrolled
copy of this resolution to Mrs. I.B. Brown, 1635 S.E. Hudson, Topeka, Kansas 66607 and
to Bishop Howard Cunningham, Pastor, First Church of God in Christ, 614 S.E. California,
Topeka, Kansas 66607.

 On emergency motion of Senator Hensley SR 1851 was adopted unanimously.

 Senator Hensley introduced Mrs. Avalon Brown, acknowledging Bishop Brown's many
years of service as a minister and bishop for the Church of God in Christ. Accompanying
Mrs. Brown was her sister Lorene Powell.

   Senator Hensley introduced the following Senate resolution, which was read:

SENATE RESOLUTION No. 1852--

A  RESOLUTION congratulating and commending Lester Lewis.
      WHEREAS,  Lester Lewis, 73, of Topeka, retired September 30, 1999, after completing
more than 53 years of service to the state of Kansas and with the longest length of service
of any state employee; and

      WHEREAS,  After graduating from Highland Park High School, Lester Lewis reported
for duty on May 3, 1946, as a part-time custodian at the state capitol. Within two months
his attitude and attention to detail placed him in a clerk's position in the then Revenue and
Taxation Department. Lewis worked for the Revenue Department for the next 33 years
being promoted seven times. In 1979 he transferred to the Department of Social and
Rehabilitation Services to work with the weatherization assistance program. In this work
Lester Lewis found his niche: ``I went from 'dogging' people to pay their taxes, to helping
them.'' He truly enjoyed this work and spent the next 20 years traveling the state of Kansas
helping Kansans find ways to lower their energy bills. He also helped communities apply
for and receive emergency shelter grants for the homeless; and

      WHEREAS,  The housing program became a program for the Kansas Division of
Housing, which later was blended with the Commerce Department to become the Kansas
Department of Commerce and Housing. Lewis' position upon retirement was as an
Economic Development Representative II with this latter department; and

      WHEREAS,  Lester Lewis and his wife, Norma, were married the same month he started
working for the state. In his retirement he hopes to finish some house projects and to catch
some big fish: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we congratulate and commend
Lester Lewis upon his retirement from 53 years of honorable service to the state of Kansas;
and

      Be it further resolved: That the Secretary of the Senate be directed to provide an
enrolled copy of this resolution to Mr. and Mrs. Lester Lewis, 2704 S.E. Jefferson, Topeka,
KS 66605.

 On emergency motion of Senator Hensley SR 1852 was adopted unanimously.

   Senators Hensley, Barone, Biggs, Downey, Feleciano, Gilstrap, Gooch, Goodwin, Jones,
Lee, Petty, Steineger and Stephens introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1853--

A  RESOLUTION celebrating the 200th anniversary of the birthdate of John Brown.
      WHEREAS,  John Brown, the abolitionist, was born May 9, 1800, at Torrington,
Connecticut, the son of Owen and Ruth (Mills) Brown. His father was an abolitionist and
an agent of the underground railroad; and

      WHEREAS,  John Brown spent his boyhood in Hudson, Ohio, an anti-slavery stronghold
where he had little formal education but learned the tanner's trade while working for his
father. In 1825 he moved to Richmond, Pennsylvania, which was the first of ten migrations
in which he established and sold tanneries, speculated unsuccessfully in land and incurred
debts. Always an abolitionist, his homes were way stations for the underground railroad.
Late in his life the thought of freeing slaves by force dominated his mind; and

      WHEREAS,  In the spring of 1855 five of John Brown's sons moved to Osawatomie where
John's half-sister, Florella Adair, lived. At that time the Kansas territory was in the midst of
the struggle as to whether Kansas would be free or slave. In May of 1855 John Brown joined
his sons at Osawatomie bringing a wagon full of guns and ammunition. He quickly became
the leader of the local militia. During May of 1856 after proslavery forces sacked Lawrence,
John Brown led a group that killed five proslavery men living along Pottawatomie Creek.
His actions he justified as being ordered directly by God; and

      WHEREAS,  He then formulated a plan to incite a massive slave insurrection. To further
this idea in early 1859 he moved to a rented farm near Harpers Ferry, West Virginia. In
October of 1859 he led 21 followers on a raid against the federal arsenal at Harpers Ferry.
He succeeded in occupying the arsenal but was soon trapped therein by federal forces under
the command of Robert E. Lee. In his trial for treason he vigorously condemned slavery
and defended his actions as ordained by God. He was, however, found guilty and hung
December 2, 1859. He is buried at the North Elba, New York, farm which had been
maintained by his second wife, May Ann (Day) Brown: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we note the actions of John
Brown in helping Kansas enter the union as a free state and his efforts to quell the institution
of slavery.

 On emergency motion of Senator Hensley SR 1853 was adopted unanimously.

   Senator Gooch introduced the following Senate resolution, which was read:

      SENATE RESOLUTION No. 1854--

A  RESOLUTION congratulating and commending Donna Elaine Sweet, M.D.
      WHEREAS,  Dr. Donna Elaine Sweet, Professor of Medicine at the University of Kansas
School of Medicine--Wichita, was honored on March 20, 2000, when she was presented as
a ``Pride In The Profession Honoree'' at the American Medical Association Leadership
Conference in Miami, Florida, for her work as a leader in the care of patients with HIV
and AIDS; and

      WHEREAS,  Dr. Sweet was one of only 130 researchers and clinicians nation-wide
invited to take part in the first White House Conference on HIV and AIDS. She also received
the ``Award of Courage'' from the American Foundation for AIDS Research on World AIDS
Day 1992 and was recognized on World AIDS Day 1993 by the Health Care Financing
Administration with an ``Administrators Citation'' for her willingness to treat HIV infected
individuals without regard to their ability to pay for service; and

      WHEREAS,  Dr. Sweet is a native of Wichita, Kansas. She attended Wichita State
University where she earned both her Bachelor of Science and Master of Science degrees
in biology. She obtained her Doctor of Medicine degree from the University of Kansas
School of Medicine. She completed her residency in internal medicine at the University of
Kansas-Wichita and affiliated Hospitals in Wichita and was board certified in internal
medicine in 1982; and

      WHEREAS,  Currently, Dr. Sweet has multiple roles in medical education and patient
care at the University of Kansas School of Medicine--Wichita. She is Director of Internal
Medicine Education at Via Christi Regional Medical Center--St. Francis, as well as the
director and principal investigator of the Kansas AIDS Education and Training Center. Dr.
Sweet currently spends over 80 hours a week on patient care, education, and lecturing on
AIDS: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we congratulate and commend
Dr. Sweet for her leadership and dedication in the treatment of HIV and AIDS and for
continued commitment to medical education and patient care; and

      Be it further resolved: That the Secretary of the Senate be directed to provide an
enrolled copy of this resolution to Donna Elaine Sweet, M.D., and to Joseph C. Meek,
M.D., Dean, both at the University of Kansas School of Medicine--Wichita, 1010 N. Kansas,
Wichita, Kansas 67214-3199.

 On emergency motion of Senator Gooch SR 1854 was adopted unanimously.

   Senator Salmans introduced the following Senate resolution, which was read:

      SENATE RESOLUTION No. 1855--

A  RESOLUTION congratulating and commending the Hanston High School football team.
      WHEREAS,  The Hanston High School football team won the 1999 Kansas State High
School Activities Association Class 1A State Football Championship; and

      WHEREAS,  The Hanston High School football team won the state championship with
a thrilling 20-6 victory over Baileyville B & B High School in the state championship game;
and

      WHEREAS,  The Hanston High School ``Elks'' football team, with a 13-0 record, is the
Class 1A State Champion; and

      WHEREAS,  The members of this outstanding football team have received statewide
recognition for their fine sportsmanship and athletic abilities; and

      WHEREAS,  The success of this team is due to excellent teamwork, strong competitive
spirit and determination to win, and the enthusiastic support of the school's administrators,
the faculty, the students, the players' parents and the many area citizens; and

      WHEREAS,  Each player of this team, the coaching staff, the school administrators, the
faculty, the students and every citizen of this proud community who supported and
encouraged the team's success should be recognized and acclaimed for this honor: Now,
therefore,

      Be it resolved by the Senate of the State of Kansas: That the Hanston High School
football team and Coach Slaton be congratulated and commended for winning the 1999
Kansas State High School Activities Association Class 1A State Football Championship in
Kansas; and

      Be it further resolved: That the Secretary of the Senate be directed to send enrolled
copies of this resolution to Superintendent Mark Salmans, Principal and Athletic Director
Daryl Stegman, Coach Jerry Slaton, Assistant Coach Oliver Salmans, and to team members
Dustin Lee, Troy Soukup, Matt Dixon, Wes Lundeen, Asa Stiles, Todd Cossman, Chris
Mefford, Levi Selfridge, Matt Housman, Kaleb Slaton, Eugene Frusher, Luke Salmans,
Lucas Selfridge, Collin Reece, Jarrod Cox, Adam Hann, Josh Holmes, Ross Bauer, Seth
Seiler, Paul Gilliland, Jason Hayes, Dan Burke, Michael Gilliland, and Team Manager Doug
Cure, all in care of Hanston High School, U.S.D. 228, Box 219, Hanston, Kansas, 67849.

 On emergency motion of Senator Salmans SR 1855 was adopted unanimously.

   Senator Petty introduced the following Senate resolution, which was read:

      SENATE RESOLUTION No. 1856--

A  RESOLUTION congratulating and commending Ben Lerner.
      WHEREAS,  Ben Lerner, now a student at Brown University, is commended for his
outstanding leadership in forensics and stellar representation of Kansas in foreign
extemporaneous speaking; and

      WHEREAS,  Ben Lerner was the 1997 national champion in foreign extemporaneous
speaking and a National Forensic League All American in 1996 and 1997. He has the
distinction of being the all time point leader of the National Forensic League being named
the top single competitor in National Forensic League history. He is the only Topeka High
School graduate to qualify all four years as a national qualifier in Lincoln Douglas Debate
and Foreign Extemporaneous Speaking and took 6th in the nation in 1997 in the Lincoln
Douglas Debate; and

      WHEREAS,  Ben Lerner was the class 6A state speech champion in extemporaneous
speaking for 1995, 1996 and 1997 and a member of the Class 6A sweepstakes state
champions for 1995, 1996 and 1997; and

      WHEREAS,  Ben Lerner has demonstrated remarkable skill with language in the realms
of politics, public service, prose and poetry having moderated the Topeka mayoral debates
in 1997, spoken on behalf of environmental causes in Kansas Senate hearings and at the
City Council, was active on the Heritage Panel and was a published poet; and

      WHEREAS,  Ben Lerner was inducted at Brown University into the Society of Royce
Fellows for his record of creativity and leadership; and

      WHEREAS,  Ben Lerner is the son of Steve and Harriet Lerner: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we congratulate and commend
Ben Lerner upon his many successes in forensics and extemporaneous speaking; his
distinguished record of leadership and for the credit he has brought to his family and his
state; and

      Be it further resolved: That the Secretary of the Senate be directed to provide an
enrolled copy of this resolution to Ben Lerner in care of Mr. and Mrs. Steve Lerner, 407
Greenwood, Topeka, Kansas 66606.

 On emergency motion of Senator Petty SR 1856 was adopted unanimously.

   Senators Vratil and Langworthy introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1857--

A  RESOLUTION congratulating and commending Yellow Freight System.
      WHEREAS,  Fortune magazine released its prestigious list of America's Most Admired
Companies in its February 2000 issue; and

      WHEREAS,  Five excellent corporate citizens of the State of Kansas were included
among these most elite companies; and

      WHEREAS,  The Greater Kansas City Chamber of Commerce will formally recognize
the five Kansas companies given special recognition with a reception on May 1, 2000; and

      WHEREAS,  The members of the Kansas Senate have long recognized and valued the
presence of these excellent corporations and the products and services they provide not only
to this state, but to the nation and the world; and

      WHEREAS,  Yellow Freight System had its genesis in Kansas, founded in 1924 as
Yellow Transit Company. It became Yellow Transit Freight Lines, survived a bankruptcy to
expand nationally into Yellow Freight System in 1968 and when the Yellow Corporation
holding company was formed in 1993, Yellow Freight was still its largest component; and

      WHEREAS,  Yellow Freight System, offers comprehensive shipping services,
encompassing ground, air, rail and ocean transportation capabilities; and

      WHEREAS,  Yellow Freight System, operates from a system of more than 380
terminals and distribution centers located in all 50 states, throughout Canada and Mexico;
runs a fleet of some 8,500 tractors and 35,000 trailers; and has amassed the expertise and
resources to provide shipping service to the Pacific, Asia, Europe, Latin America and
throughout North America: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we, the members of the Kansas
Senate of the Year 2000, join together to commend the officers, management and employees
of Yellow Freight System for the standard of excellence set here and abroad, and
congratulate them on receiving the well-deserved honor by Fortune magazine as one of
America's Most Admired Companies.

 On emergency motion of Senator Langworthy SR 1857 was adopted unanimously.

   Senators Vratil and Langworthy introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1858--

A  RESOLUTION congratulating and commending Kansas City Southern Industries.
      WHEREAS,  Fortune magazine released its prestigious list of America's Most Admired
Companies in its February 2000 issue; and

      WHEREAS,  Five excellent corporate citizens of the State of Kansas were included
among these most elite companies; and

      WHEREAS,  The Greater Kansas City Chamber of Commerce will formally recognize
the five Kansas companies given special recognition with a reception on May 1, 2000; and

      WHEREAS,  The members of the Kansas Senate have long recognized and valued the
presence of these excellent corporations and the products and services they provide not only
to this state, but to the nation and the world; and

      WHEREAS,  Kansas City Southern Industries is a publicly held enterprise, with
significant interests in financial services and transportation; and

      WHEREAS,  Kansas City Southern Industries, through its railway entity Kansas City
Southern Railway, provides a lifeline between the United States, Canada and Mexico,
facilitating the exchange of commerce and industry between these nations as part of the
North American Free Trade Agreement; and

      WHEREAS,  Kansas City Southern Industries, by virtue of its impressive stock
performance, is a member of the exclusive S&P 500 and has established itself as one of
America's most successful corporations: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we, the members of the Kansas
Senate of the Year 2000, join together to commend the officers, management and employees
of Kansas City Southern Industries for the standard of excellence set here and abroad,
and congratulate them on receiving the well-deserved honor by Fortune magazine as one
of America's Most Admired Companies.

 On emergency motion of Senator Langworthy SR 1858 was adopted unanimously.

   Senators Vratil and Langworthy introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1859--

A  RESOLUTION congratulating and commending Sprint.
      WHEREAS,  Fortune magazine released its prestigious list of America's Most Admired
Companies in its February 2000 issue; and

      WHEREAS,  Five excellent corporate citizens of the State of Kansas were included
among these most elite companies; and

      WHEREAS,  The Greater Kansas City Chamber of Commerce will formally recognize
the five Kansas companies given special recognition with a reception on May 1, 2000; and

      WHEREAS,  The members of the Kansas Senate have long recognized and valued the
presence of these excellent corporations and the products and services they provide not only
to this state, but to the nation and the world; and

      WHEREAS,  Sprint has led the global charge into wireless communications and the
Internet, has established itself as one of the largest Internet service providers, and has helped
pioneer the integration of local service with long distance and wireless service; and

      WHEREAS,  Sprint, with its vision for the future, was the first to develop and operate
a nationally accessible, digital, fiber optic network; and

      WHEREAS,  Sprint has time and again demonstrated its commitment to our state and
to Johnson County, most recently by locating its massive and beautiful new corporate
campus within our borders: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we, the members of the Kansas
Senate of the Year 2000, join together to commend the officers, management and employees
of Sprint for the standard of excellence set here and abroad, and congratulate them on
receiving the well-deserved honor by Fortune magazine as one of America's Most Admired
Companies.

 On emergency motion of Senator Langworthy SR 1859 was adopted unanimously.

   Senators Vratil and Langworthy introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1860--

A  RESOLUTION congratulating and commending Farmland Industries.
      WHEREAS,  Fortune magazine released its prestigious list of America's Most Admired
Companies in its February 2000 issue; and

      WHEREAS,  Five excellent corporate citizens of the State of Kansas were included
among these most elite companies; and

      WHEREAS,  The Greater Kansas City Chamber of Commerce will formally recognize
the five Kansas companies given special recognition with a reception on May 1, 2000; and

      WHEREAS,  The members of the Kansas Senate have long recognized and valued the
presence of these excellent corporations and the products and services they provide not only
to this state, but to the nation and the world; and

      WHEREAS,  Farmland Industries originated as Union Oil Company in 1929 and has
grown and diversified to raise and process grain, hogs, cattle and catfish, and to produce
and market chemicals used in agriculture and agribusiness; and

      WHEREAS,  Farmland Industries has established a significant regional office presence
in several midwestern states, provides products and services in all 50 states and in almost
90 countries across the globe, and involves more than 600,000 independent family farmers
in 1,400 cooperatives: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we, the members of the Kansas
Senate of the Year 2000, join together to commend the officers, management and employees
of Farmland Industries for the standard of excellence set here and abroad, and
congratulate them on receiving the well-deserved honor by Fortune magazine as one of
America's Most Admired Companies in the Food Industry Category.

 On emergency motion of Senator Langworthy SR 1860 was adopted unanimously.

   Senators Vratil and Langworthy introduced the following Senate resolution, which was
read:

      SENATE RESOLUTION No. 1861--

A  RESOLUTION congratulating and commending Utilicorp.
      WHEREAS,  Fortune magazine released its prestigious list of America's Most Admired
Companies in its February 2000 issue; and

      WHEREAS,  Five excellent corporate citizens of the State of Kansas were included
among these most elite companies; and

      WHEREAS,  The Greater Kansas City Chamber of Commerce will formally recognize
the five Kansas companies given special recognition with a reception on May 1, 2000; and

      WHEREAS,  The members of the Kansas Senate have long recognized and valued the
presence of these excellent corporations and the products and services they provide not only
to this state, but to the nation and the world; and

      WHEREAS,  Utilicorp is a dynamic utility and energy service corporation serving
industrial, commercial and private accounts both nationally and internationally; and

      WHEREAS,  Utilicorp founded its first electrical generator in Solomon Valley, Kansas,
in 1902, and later moved to Alton, Kansas, and then to Concordia, Kansas; and

      WHEREAS,  Utilicorp earned the rank of 132nd in sales on the 1998 Fortune 500 list
and has also been included in Forbes magazine's Platinum 400 list: Now, therefore,

      Be it resolved by the Senate of the State of Kansas: That we, the members of the Kansas
Senate of the Year 2000, join together to commend the officers, management and employees
of Utilicorp for the standard of excellence set here and abroad, and congratulate them on
receiving the well-deserved honor by Fortune magazine as one of America's Most Admired
Companies.

 On emergency motion of Senator Langworthy SR 1861 was adopted unanimously.

REPORTS OF STANDING COMMITTEES
 Committee on Public Health and Welfare recommends Substitute for SB 554, as
amended by House Committee of the Whole, be amended by substituting a new bill to be
designated as ``Substitute for Substitute for SENATE BILL No. 554,'' as follows:

``Substitute for Substitute for SENATE BILL No. 554
By Committee on Public Health and Welfare
``AN  ACT concerning behavioral sciences; relating to professional counselors;
      concerning licensure of psychologists; amending K.S.A. 74-5318, as amended by section
      27 of chapter 117 of the 1999 Session Laws of Kansas, 74-5319, 74-5321 and K.S.A.
      1998 Supp. 65-5802, as amended by section 1 of chapter 117 of the 1999 Session Laws
      of Kansas, and K.S.A. 1999 Supp. 74-5320 and repealing the existing sections.'';

            and the substitute bill be passed.

REPORT ON ENGROSSED BILLS
 SB 366, 432 correctly re-engrossed April 28, 2000.

REPORT ON ENROLLED BILLS
 SR 1845 reported correctly enrolled, properly signed and presented to the Secretary of
the Senate on April 28, 2000.

ORIGINAL MOTION
 Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: SB 673;
S Sub HB 2027; Sub HB 2540; HB 2838.

FINAL ACTION OF BILLS AND CONCURRENT RESOLUTIONS
 On motion of Senator Emert an emergency was declared by a 2/3 constitutional majority,
and SB 673; SR 1848, 1849; S Sub HB 2027; Sub HB 2540; HB 2838 were advanced
to Final Action, subject to amendment, debate and roll call.

   SB 673, An act concerning the state institutions building fund; debt service on revenue
bonds for certain capital improvement projects; amending K.S.A. 76-6b05 and repealing the
existing section, was considered on final action.

 On roll call, the vote was: Yeas 39, Nays 1, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Umbarger,
Vidricksen, Vratil.

 Nays: Tyson.

 The bill passed.

 SR 1848, A resolution establishing a task force on a state education technology-based
network, was considered on final action.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The resolution was adopted.

 SR 1849, A resolution concerning a task force on the Kansas mental health system.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The resolution was adopted.

 S Sub for HB 2027, An act concerning docket fees; establishing the judicial branch
nonjudicial salary initiative fund; relating to compensation for certain nonjudicial employees
in the judicial branch; amending K.S.A. 20-1a04 and K.S.A. 1999 Supp. 8-2107, 20-367, 28-
172a, 60-2001, 61-2501 and 61-2704 and repealing the existing sections; also repealing
K.S.A. 1999 Supp. 20-367a, was considered on final action.

 S Sub for HB 2027 was amended by adoption of the committee report recommending
a substitute bill.

 On roll call, the vote was: Yeas 39, Nays 1, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

 Nays: Huelskamp.

 The substitute bill passed.

 Sub HB 2540, An act concerning Native American Indians; relating to powers and duties
of certain public agencies in relation thereto; amending K.S.A. 12-2903 and 12-2904 and
K.S.A. 1999 Supp. 8-1,141, 74-9803, 74-9804, 74-9805 and 74-9808 and repealing the
existing sections, was considered on final action.

 Sub HB 2540 was amended by adoption of the committee amendments.

 The bill was further amended by motion of Senator Oleen as amended by Senate
Committee, on page 10, following line 11, by inserting the following:

      ``New Sec.  8. (a) As used in this section, ``Native American Indian tribe'' or ``tribe''
means any of the following resident Kansas Native American Indian tribes:

      (1) The Iowa Tribe of Kansas and Nebraska.

      (2) The Kickapoo Tribe in Kansas.

      (3) The Prairie Band Potawatomi Nation of Kansas.

      (4) The Sac and Fox Nation of Missouri in Kansas and Missouri.

      (b) The owner or lessee of one or more passenger vehicles or trucks registered for a
gross weight of not more than 20,000 pounds who is an enrolled member of a Native
American Indian tribe and a resident of Kansas may be issued one distinctive license plate
designed for the specified tribe for each such passenger vehicle or truck. Such license plates
shall be issued for the same period of time as other license plates upon payment of a $5 fee
and upon proper registration as provided in K.S.A. 8-143, and amendments thereto. Such
fee shall be in lieu of the regular licensee fee required by K.S.A. 8-143, and amendments
thereto.

      (c) Any person who is an enrolled member of a Native American Indian tribe and a
resident of Kansas may make application for a distinctive license plate, not less than 60 days
prior to such person's renewal of registration date, on an application form prescribed and
furnished by the tribe. Such application form shall contain all information required by the
division of motor vehicles. Applications approved by the tribe shall be submitted to the
division of motor vehicles for issuance of tags.

      (d) Each tribe, with the approval of the director of vehicles and subject to the availability
of materials and equipment, shall design a distinctive license plate to be issued under the
provisions of this section.

      (e) No registration or distinctive license plate issued under the authority of this section
shall be transferable to any other person.

      (f) Renewals of registration under this section shall be made annually. No renewal of
registration shall be made to any applicant until such applicant has filed with the division
of motor vehicles a form as provided in subsection (c). If such form is not filed, the applicant
shall be required to comply with K.S.A. 8-143, and amendments thereto, and return the
distinctive license plate to the division of motor vehicles.

      (g) Each Native American Indian tribe shall pay the initial cost of silk-screening
distinctive license plates authorized to be issued pursuant to this section.

      (h) Each Native American Indian tribe may impose a fee for the issuance of a distinctive
license plate and registration and for the renewal thereof. Such fee shall be in an amount
determined by each tribe and shall be in addition to any other fee imposed pursuant to this
section. Revenues from such fees shall be used in the manner determined by the tribe
imposing such fee.

      Sec.  9. K.S.A. 1999 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. 1999 Supp. 8-1,145 or section 8, and amendments thereto.

      (d) The provisions of subsection (a), shall not apply to distinctive license plates issued
under the provisions of K.S.A. 1999 Supp. 8-1,146, and amendments thereto, or K.S.A. 1999
Supp. 8-1,148.'';

      And by renumbering sections accordingly;

      Also on page 10, in line 12, following ``Supp.'' by inserting ``8-1,141,'';

      In the title, in line 15, following ``Supp.'' by inserting ``8-1,141,''

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The substitute bill passed, as amended.

 HB 2838, An act concerning children and minors; concerning the health, safety and
welfare thereof; amending K.S.A. 21-3604, 38-102, 38-614, 38-1529 and K.S.A. 1999 Supp.
38-1583 and 38-1585 and repealing the existing sections, was considered on final action.

 HB 2838 be amended by adoption of the committee amendments, be further amended
by motion of Senator Oleen on page 10, before line 11, by inserting (e) Upon request, all
medical records of said infant shall be made available to the Department of Social and
Rehabilitation Services and given to person awarded custody of said infant. The medical
facility providing such records shall be immune from liability for their release.

 On roll call, the vote was: Yeas 39, Nays 1, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 Nays: Pugh.

 The bill passed, as amended.

   On motion of Senator Emert, the Senate recessed until 4:00 p.m.

______
Afternoon Session
 The Senate met pursuant to recess with Vice-President Salisbury in the chair.

COMMUNICATIONS FROM STATE OFFICERS
DEPARTMENT OF ADMINISTRATION
Division of Accounts and Reports
  April 27, 2000
   Dale Brunton, Acting Director, Division of Accounts and Reports, submitted a copy of
the State of Kansas Monthly Financial Perspective for the month of February, 2000 (revised
April, 2000).

 The revised February Monthly Financial Perspective is available on the Internet at the
Financial Reporting Section of the Division of Accounts and Reports web site under Monthly
Financial Perspective.

  DEPARTMENT OF CORRECTIONS
  April 27, 2000
   In accordance with the provisions of K.S.A. 1999 Supp. 60-4117, Charles E. Simmons,
Secretary of Corrections, submitted the report for the Kansas Department of Corrections
State Forfeiture Fund for the period of December 1, 1998 through December 1, 1999.

  COMMISSION ON JUDICIAL QUALIFICATIONS
  April 2000
   Kathryn Carter, Chair, Commission on Judicial Qualifications, submitted the 1999 Annual
Report.

  KANSAS STATE TREASURER
   The annual report of the Kansas State Treasurer's Office for Fiscal Year 1999 was
submitted by Tim Shallenburger, State Treasurer.

   The Vice-President announced the above reports are on file in the office of the Secretary
of the Senate and are available for review at any time.

MESSAGE FROM THE HOUSE
 Announcing, the House concurs in Senate amendments to HB 2328 and requests the
Senate to return the bill.

 The House concurs in Senate amendments to HB 2862 and requests the Senate to return
the bill.

 The House concurs in Senate amendments to HB 3005 and requests the Senate to return
the bill.

 Announcing, the House nonconcurs in Senate amendments to Senate Substitute HB
2027, requests a conference and has appointed Reps. Adkins, J. Peterson and Nichols as
conferees on the part of the House.

 The House nonconcurs in Senate amendments to HB 2838, requests a conference and
has appointed Reps. Powell, Hutchins and Klein as conferees on the part of the House.

 The House adopts the conference committee report on SB 59.

 The House adopts the conference committee report on SB 393.

 The House adopts the conference committee report on HB 2017.

 The House adopts the conference committee report on HB 2929.

ORIGINAL MOTION
 On motion of Senator Emert, the Senate acceded to the request of the House for a
conference on Sub HB 2683.

 The Vice-President appointed Senators Emert, Vratil and Goodwin as second conferees
on the part of the Senate.

ORIGINAL MOTION
 Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bill: H Sub
for SB 219.

CONSIDERATION OF MOTIONS TO CONCUR OR NONCONCUR
 Senator Salisbury moved the Senate concur in house amendments to H Sub for SB 219.

 H Sub for SB 219, An act concerning the workers compensation act; amending K.S.A.
44-510c, 44-516, 44-519, 44-527, 44-557, 44-576, 44-5,104 and 44-5,122 and K.S.A. 1999
Supp. 44-501, 44-508, 44-510b, 44-510d, 44-531, 44-550b, 44-556, 44-557a, 44-567, 44-570,
44-5,120 and 44-5,125 and repealing the existing sections; also repealing K.S.A. 44-513 and
K.S.A. 1999 Supp. 44-501a and 44-510.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Senate concurred.

ORIGINAL MOTION
 Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: SB 59,
393; S Sub for HB 2005; S Sub for Sub HB 2007; S Sub for HB 2624; HB 2641, 2660,
2996.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 59, submits the following report:

      The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House committee amendments
as follows:

      On page 1, by striking all in lines 18 through 43;

      By striking all on pages 2 through 14 and and inserting the following:

      ``Section  1. K.S.A. 1999 Supp. 12-187 is hereby amended to read as follows: 12-187.
(a) (1) No city shall impose a retailers' sales tax under the provisions of this act without the
governing body of such city having first submitted such proposition to and having received
the approval of a majority of the electors of the city voting thereon at an election called and
held therefor. The governing body of any city may submit the question of imposing a
retailers' sales tax and the governing body shall be required to submit the question upon
submission of a petition signed by electors of such city equal in number to not less than
10% of the electors of such city.

      (2) The governing body of any class B city located in any county which does not impose
a countywide retailers' sales tax pursuant to paragraph (5) of subsection (b) may submit the
question of imposing a retailers' sales tax at the rate of.25%,.5%,.75% or 1% and pledging
the revenue received therefrom for the purpose of financing the provision of health care
services, as enumerated in the question, to the electors at an election called and held
thereon. The tax imposed pursuant to this paragraph shall be deemed to be in addition to
the rate limitations prescribed in K.S.A. 12-189, and amendments thereto. As used in this
paragraph, health care services shall include but not be limited to the following: Local health
departments, city, county or district hospitals, city or county nursing homes, preventive
health care services including immunizations, prenatal care and the postponement of entry
into nursing homes by home health care services, mental health services, indigent health
care, physician or health care worker recruitment, health education, emergency medical
services, rural health clinics, integration of health care services, home health services and
rural health networks.

      (b)  (1) The board of county commissioners of any county may submit the question of
imposing a countywide retailers' sales tax to the electors at an election called and held
thereon, and any such board shall be required to submit the question upon submission of
a petition signed by electors of such county equal in number to not less than 10% of the
electors of such county who voted at the last preceding general election for the office of
secretary of state, or upon receiving resolutions requesting such an election passed by not
less than 2/3 of the membership of the governing body of each of one or more cities within
such county which contains a population of not less than 25% of the entire population of
the county, or upon receiving resolutions requesting such an election passed by 2/3 of the
membership of the governing body of each of one or more taxing subdivisions within such
county which levy not less than 25% of the property taxes levied by all taxing subdivisions
within the county.

      (2) The board of county commissioners of Atchison, Barton, Butler, Cowley, Cherokee,
Crawford, Ford, Jefferson, Lyon, Montgomery, Neosho, Osage, Ottawa, Riley, Saline,
Seward, Wabaunsee, Wilson and Wyandotte counties may submit the question of imposing
a countywide retailers' sales tax and pledging the revenue received therefrom for the purpose
of financing the construction or remodeling of a courthouse, jail, law enforcement center
facility or other county administrative facility, to the electors at an election called and held
thereon. The tax imposed pursuant to this paragraph shall expire when sales tax sufficient
to pay all of the costs incurred in the financing of such facility has been collected by retailers
as determined by the secretary of revenue. Nothing in this paragraph shall be construed to
allow the rate of tax imposed by Butler, Cowley, Lyon, Montgomery or, Neosho, Riley or
Wilson county pursuant to this paragraph to exceed or be imposed at any rate other than
the rates prescribed in K.S.A. 12-189, and amendments thereto.

      (3)  (A) Except as otherwise provided in this paragraph, the result of the election held
on November 8, 1988, on the question submitted by the board of county commissioners of
Jackson county for the purpose of increasing its countywide retailers' sales tax by 1% is
hereby declared valid, and the revenue received therefrom by the county shall be expended
solely for the purpose of financing the Banner Creek reservoir project. The tax imposed
pursuant to this paragraph shall take effect on the effective date of this act and shall expire
not later than five years after such date.

      (B) The result of the election held on November 8, 1994, on the question submitted by
the board of county commissioners of Ottawa county for the purpose of increasing its
countywide retailers' sales tax by 1% is hereby declared valid, and the revenue received
therefrom by the county shall be expended solely for the purpose of financing the erection,
construction and furnishing of a law enforcement center and jail facility.

      (4) The board of county commissioners of Finney and Ford counties may submit the
question of imposing a countywide retailers' sales tax at the rate of.25% and pledging the
revenue received therefrom for the purpose of financing all or any portion of the cost to be
paid by Finney or Ford county for construction of highway projects identified as system
enhancements under the provisions of paragraph (5) of subsection (b) of K.S.A. 68-2314,
and amendments thereto, to the electors at an election called and held thereon. Such
election shall be called and held in the manner provided by the general bond law. The tax
imposed pursuant to this paragraph shall expire upon the payment of all costs authorized
pursuant to this paragraph in the financing of such highway projects. Nothing in this
paragraph shall be construed to allow the rate of tax imposed by Finney or Ford county
pursuant to this paragraph to exceed the maximum rate prescribed in K.S.A. 12-189, and
amendments thereto. If any funds remain upon the payment of all costs authorized pursuant
to this paragraph in the financing of such highway projects in Finney county, the state
treasurer shall remit such funds to the treasurer of Finney county and upon receipt of such
moneys shall be deposited to the credit of the county road and bridge fund. If any funds
remain upon the payment of all costs authorized pursuant to this paragraph in the financing
of such highway projects in Ford county, the state treasurer shall remit such funds to the
treasurer of Ford county and upon receipt of such moneys shall be deposited to the credit
of the county road and bridge fund.

      (5) The board of county commissioners of any county may submit the question of
imposing a retailers' sales tax at the rate of.25%,.5%,.75% or 1% and pledging the revenue
received therefrom for the purpose of financing the provision of health care services, as
enumerated in the question, to the electors at an election called and held thereon. Whenever
any county imposes a tax pursuant to this paragraph, any tax imposed pursuant to paragraph
(2) of subsection (a) by any city located in such county shall expire upon the effective date
of the imposition of the countywide tax, and thereafter the state treasurer shall remit to
each such city that portion of the countywide tax revenue collected by retailers within such
city as certified by the director of taxation. The tax imposed pursuant to this paragraph shall
be deemed to be in addition to the rate limitations prescribed in K.S.A. 12-189, and
amendments thereto. As used in this paragraph, health care services shall include but not
be limited to the following: Local health departments, city or county hospitals, city or county
nursing homes, preventive health care services including immunizations, prenatal care and
the postponement of entry into nursing homes by home care services, mental health services,
indigent health care, physician or health care worker recruitment, health education,
emergency medical services, rural health clinics, integration of health care services, home
health services and rural health networks.

      (6) The board of county commissioners of Allen county may submit the question of
imposing a countywide retailers' sales tax at the rate of.5% and pledging the revenue received
therefrom for the purpose of financing the costs of operation and construction of a solid
waste disposal area or the modification of an existing landfill to comply with federal
regulations to the electors at an election called and held thereon. The tax imposed pursuant
to this paragraph shall expire upon the payment of all costs incurred in the financing of the
project undertaken. Nothing in this paragraph shall be construed to allow the rate of tax
imposed by Allen county pursuant to this paragraph to exceed or be imposed at any rate
other than the rates prescribed in K.S.A. 12-189 and amendments thereto.

      (7) The board of county commissioners of Clay, Dickinson and Miami county may
submit the question of imposing a countywide retailers' sales tax at the rate of .50% in the
case of Clay and Dickinson county and at a rate of up to 1% in the case of Miami county,
and pledging the revenue received therefrom for the purpose of financing the costs of
roadway construction and improvement to the electors at an election called and held
thereon. The tax imposed pursuant to this paragraph shall expire after five years from the
date such tax is first collected.

      (8) The board of county commissioners of Sherman county may submit the question of
imposing a countywide retailers' sales tax at the rate of.25%,.5% or.75% and pledging the
revenue therefrom for the purpose of financing the costs of the county roads 64 and 65
construction and improvement project. The tax imposed pursuant to this paragraph shall
expire upon payment of all costs authorized pursuant to this paragraph in the financing of
such project.

      (9) The board of county commissioners of Cowley and, Russell and Woodson county
may submit the question of imposing a countywide retailers' sales tax at the rate of.5% in
the case of Russell and Woodson county and at a rate of up to.25%, in the case of Cowley
county and pledging the revenue received therefrom for the purpose of financing economic
development initiatives or public infrastructure projects. The tax imposed pursuant to this
paragraph shall expire after five years from the date such tax is first collected.

      (10) The board of county commissioners of Franklin county may submit the question of
imposing a countywide retailers' sales tax at the rate of .25% and pledging the revenue
received therefrom for the purpose of financing recreational facilities. The tax imposed
pursuant to this paragraph shall expire upon payment of all costs authorized in financing
such facilities.

      (c) The boards of county commissioners of any two or more contiguous counties, upon
adoption of a joint resolution by such boards, may submit the question of imposing a
retailers' sales tax within such counties to the electors of such counties at an election called
and held thereon and such boards of any two or more contiguous counties shall be required
to submit such question upon submission of a petition in each of such counties, signed by
a number of electors of each of such counties where submitted equal in number to not less
than 10% of the electors of each of such counties who voted at the last preceding general
election for the office of secretary of state, or upon receiving resolutions requesting such
an election passed by not less than 2/3 of the membership of the governing body of each of
one or more cities within each of such counties which contains a population of not less than
25% of the entire population of each of such counties, or upon receiving resolutions
requesting such an election passed by 2/3 of the membership of the governing body of each
of one or more taxing subdivisions within each of such counties which levy not less than
25% of the property taxes levied by all taxing subdivisions within each of such counties.

      (d) Any city retailers' sales tax in the amount of.5% being levied by a city on July 1,
1990, shall continue in effect until repealed in the manner provided herein for the adoption
and approval of such tax or until repealed by the adoption of an ordinance so providing. In
addition to any city retailers' sales tax being levied by a city on July 1, 1990, any such city
may adopt an additional city retailers' sales tax in the amount of.25% or.5%, provided that
such additional tax is adopted and approved in the manner provided for the adoption and
approval of a city retailers' sales tax. Any countywide retailers' sales tax in the amount of.5%
or 1% in effect on July 1, 1990, shall continue in effect until repealed in the manner provided
herein for the adoption and approval of such tax.

      (e) A class D city shall have the same power to levy and collect a city retailers' sales tax
that a class A city is authorized to levy and collect and in addition, the governing body of
any class D city may submit the question of imposing an additional city retailers' sales tax
in the amount of.125%,.25%,.5% or.75% and pledging the revenue received therefrom for
economic development initiatives, strategic planning initiatives or for public infrastructure
projects including buildings to the electors at an election called and held thereon. Any
additional sales tax imposed pursuant to this paragraph shall expire no later than five years
from the date of imposition thereof, except that any such tax imposed by any class D city
after the effective date of this act shall expire no later than 10 years from the date of
imposition thereof.

      (f) Any city or county proposing to adopt a retailers' sales tax shall give notice of its
intention to submit such proposition for approval by the electors in the manner required by
K.S.A. 10-120, and amendments thereto. The notices shall state the time of the election and
the rate and effective date of the proposed tax. If a majority of the electors voting thereon
at such election fail to approve the proposition, such proposition may be resubmitted under
the conditions and in the manner provided in this act for submission of the proposition. If
a majority of the electors voting thereon at such election shall approve the levying of such
tax, the governing body of any such city or county shall provide by ordinance or resolution,
as the case may be, for the levy of the tax. Any repeal of such tax or any reduction or increase
in the rate thereof, within the limits prescribed by K.S.A. 12-189, and amendments thereto,
shall be accomplished in the manner provided herein for the adoption and approval of such
tax except that the repeal of any such city retailers' sales tax may be accomplished by the
adoption of an ordinance so providing.

      (g) The sufficiency of the number of signers of any petition filed under this section shall
be determined by the county election officer. Every election held under this act shall be
conducted by the county election officer.

      (h) The governing body of the city or county proposing to levy any retailers' sales tax
shall specify the purpose or purposes for which the revenue would be used, and a statement
generally describing such purpose or purposes shall be included as a part of the ballot
proposition.

      Sec.  2. K.S.A. 1999 Supp. 12-188 is hereby amended to read as follows: 12-188. The
following classes of cities are hereby established for the purpose of imposing limitations and
prohibitions upon the levying of sales and excise taxes or taxes in the nature of an excise
upon sales or transfers of personal or real property or the use thereof, or the rendering or
furnishing of services by cities as authorized and provided by article 12, section 5, of the
constitution of the state of Kansas:

      Class A cities. All cities in the state of Kansas which have the authority to levy and collect
excise taxes or taxes in the nature of an excise upon the sales or transfers of personal or real
property or the use thereof, or the rendering or furnishing of services by cities.

      Class B cities. All cities in the state of Kansas which have the authority to levy and collect
excise taxes or taxes in the nature of an excise upon the sales or transfers of personal or real
property or the use thereof, or the rendering or furnishing of services for the purpose of
financing the provision of health care services.

      Class C cities. All cities in the state of Kansas having a population of more than 290,000
located in a county having a population of more than 350,000 which has the authority to
levy and collect excise taxes or taxes in the nature of an excise upon the sales or transfers
of personal or real property or the use thereof, or the rendering or furnishing of services.

      Class D cities. All cities in the state of Kansas located in Cowley, Ellis, Ellsworth, Finney,
Harper, Johnson, Labette, Lyon, Montgomery, Osage or, Reno or Woodson county or in
both Riley and Pottawatomie counties which have the authority to levy and collect excise
taxes or taxes in the nature of an excise upon the sales or transfers of personal or real property
or the use thereof, or the rendering or furnishing of services.

      Sec.  3. K.S.A. 1999 Supp. 12-189 is hereby amended to read as follows: 12-189. Except
as otherwise provided by paragraph (2) of subsection (a) of K.S.A. 12-187, and amendments
thereto, the rate of any class A, class B or class C city retailers' sales tax shall be fixed in
the amount of .25%, .5%, .75% or 1% which amount shall be determined by the governing
body of the city. Except as otherwise provided by paragraph (2) of subsection (a) of K.S.A.
12-187, and amendments thereto, the rate of any class D city retailers' sales tax shall be
fixed in the amount of .25%, .5%, .75%, 1%, 1.125%, 1.25%, 1.5% or 1.75%. The rate of
any countywide retailers' sales tax shall be fixed in an amount of either .25%, .5%, .75% or
1% which amount shall be determined by the board of county commissioners, except that:

      (a) The board of county commissioners of Wabaunsee county, for the purposes of
paragraph (2) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at 1.25%; the board of county commissioners of Osage county, for the purposes of
paragraph (2) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at 1.25% or 1.5%; the board of county commissioners of Cherokee, Crawford, Ford,
Saline, Seward or Wyandotte county, for the purposes of paragraph (2) of subsection (b) of
K.S.A. 12-187, and amendments thereto, may fix such rate at 1.5%, the board of county
commissioners of Atchison county, for the purposes of paragraph (2) of subsection (b) of
K.S.A. 12-187, and amendments thereto, may fix such rate at 1.5% or 1.75% and the board
of county commissioners of Barton, Jefferson or Ottawa county, for the purposes of
paragraph (2) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at 2%;

      (b) the board of county commissioners of Jackson county, for the purposes of paragraph
(3) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such rate at 2%;

      (c) the boards of county commissioners of Finney and Ford counties, for the purposes
of paragraph (4) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at .25%;

      (d) the board of county commissioners of any county for the purposes of paragraph (5)
of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such rate at a
percentage which is equal to the sum of the rate allowed to be imposed by a board of county
commissioners on the effective date of this act plus .25%, .5%, .75% or 1%, as the case
requires;

      (e) the board of county commissioners of Dickinson county, for the purposes of
paragraph (7) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at 1.5%, and the board of county commissioners of Miami county, for the purposes of
paragraph (7) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at 1.25%, 1.5%, 1.75% or 2%;

      (f) the board of county commissioners of Sherman county, for the purposes of paragraph
(8) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such rate at 1.5%,
1.75% or 2%; or

      (g) the board of county commissioners of Russell county for the purposes of paragraph
(9) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such rate at 1.5%;
or
      (h) the board of county commissioners of Franklin county, for the purposes of paragraph
(10) of subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such rate at 1.75%.

      Any county or city levying a retailers' sales tax is hereby prohibited from administering
or collecting such tax locally, but shall utilize the services of the state department of revenue
to administer, enforce and collect such tax. Except as otherwise specifically provided in
K.S.A. 12-189a, and amendments thereto, such tax shall be identical in its application, and
exemptions therefrom, to the Kansas retailers' sales tax act and all laws and administrative
rules and regulations of the state department of revenue relating to the Kansas retailers'
sales tax shall apply to such local sales tax insofar as such laws and rules and regulations may
be made applicable. The state director of taxation is hereby authorized to administer, enforce
and collect such local sales taxes and to adopt such rules and regulations as may be necessary
for the efficient and effective administration and enforcement thereof.

      Upon receipt of a certified copy of an ordinance or resolution authorizing the levy of a
local retailers' sales tax, the state director of taxation shall cause such taxes to be collected
within or without the boundaries of such taxing subdivision at the same time and in the
same manner provided for the collection of the state retailers' sales tax. All moneys collected
by the director of taxation under the provisions of this section shall be credited to a county
and city retailers' sales tax fund which fund is hereby established in the state treasury. Any
refund due on any county or city retailers' sales tax collected pursuant to this act shall be
paid out of the sales tax refund fund and reimbursed by the director of taxation from
collections of local retailers' sales tax revenue. Except for local retailers' sales tax revenue
required to be deposited in the redevelopment bond fund established under K.S.A. 1999
Supp. 74-8927, and amendments thereto, all local retailers' sales tax revenue collected within
any county or city pursuant to this act shall be apportioned and remitted at least quarterly
by the state treasurer, on instruction from the director of taxation, to the treasurer of such
county or city.

      The director of taxation shall provide, upon request by a city or county clerk or treasurer
of any city or county levying a local retailers' sales tax, a monthly report monthly reports
identifying each retailer having a place of business in such city or county and setting forth
the tax liability and the amount of such tax remitted by each retailer during the preceding
month and identifying each business location maintained by the retailer within such city or
county. Such report shall be made available to the clerk or treasurer of such city or county
within a reasonable time after it has been requested from the director of taxation. The
director of taxation shall be allowed to assess a reasonable fee for the issuance of such report.
Information received by any city or county pursuant to this section shall be confidential,
and it shall be unlawful for any officer or employee of such city or county to divulge any
such information in employee is a class B misdemeanor, and such officer or employee shall
be dismissed from office.

      Sec.  4. K.S.A. 1999 Supp. 12-1694 is hereby amended to read as follows: 12-1694. (a)
Any tax levied and collected pursuant to K.S.A. 12-1693, and amendments thereto, shall
become due and payable by the business monthly, on or before the 25th day of the month
immediately succeeding the month in which it is collected, with the first payment due and
payable on or before the 25th day of the month specified in the resolution of the governing
body which levies the tax, but any person filing an annual or quarterly return under the
Kansas retailers' sales tax act, as prescribed in K.S.A. 79-3607, and amendments thereto,
may, with the approval of the secretary of revenue and upon such conditions as the secretary
of revenue may prescribe, pay the tax required by this act on the same basis and at the same
time such person pays the retailer's sales tax. Each business shall make a true report to the
department of revenue, on a form prescribed by the secretary of revenue, providing such
information as may be necessary to determine the amounts to which any such tax shall apply
for all gross rental receipts for the applicable month or months, which report shall be
accompanied by the tax disclosed thereby. Records of gross rental receipts shall be kept
separate and apart from the records of other retail sales made by a business in order to
facilitate the examination of books and records as provided herein.

      (b) The secretary of revenue or the secretary's authorized representative shall have the
right at all reasonable times during business hours to make such examination and inspection
of the books and records of a business as may be necessary to determine the accuracy of
such reports.

      (c) The secretary of revenue is hereby authorized to administer and collect any transient
guest tax levied pursuant to this act and to adopt such rules and regulations as may be
necessary for the efficient and effective administration and enforcement of the collection
thereof. Whenever any business liable to pay any transient guest tax refuses or neglects to
pay the same, the amount, including any penalty, shall be collected in the manner prescribed
for the collection of the retailers' sales tax by K.S.A. 79-3617, and amendments thereto. All
of the taxes collected under the provisions of this act shall be paid into the state treasury
daily by the secretary of revenue, and the state treasurer shall place 2% of all taxes so
collected in the state general fund to defray the expenses of the department in administration
and enforcement of the collection thereof. The remainder of such taxes shall be credited to
the county and city transient guest tax fund, which fund is hereby established. All moneys
in the county and city transient guest tax fund shall be remitted at least quarterly by the
state treasurer, on instruction from the secretary of revenue, to the treasurers of those cities
which, by virtue of their participation in the election provided for in K.S.A. 12-1693, and
amendments thereto, are qualified to receive disbursements from such transient guest tax
fund for the amount collected within such city, and to the treasurer of such county for the
amount collected in the unincorporated areas of such county.

      (d) The director of taxation shall provide, upon request by a city or county clerk or
treasurer of any city or county levying a transient guest tax, a monthly report monthly reports
identifying each person doing business in such city or county to which such tax is applicable
and setting forth the tax liability and the amount of such tax remitted by such business
during the preceding month, and identifying each business location maintained by the person
within such city or county. Such report shall be made available to the clerk or treasurer of
such city or county within a reasonable time after it has been requested from the director
of taxation. The director of taxation shall be allowed to assess a reasonable fee for the
issuance of such report. Information received by any city or county pursuant to this section
shall be kept confidential, and it shall be unlawful for any officer or employee of such city
or county to divulge any such information in any manner. Any violation of this paragraph
by a city or county officer or employee is a class B misdemeanor, and such officer or
employee shall be dismissed from office.

      (e) All such moneys received by the county treasurer or city treasurer from
disbursements from the county and city transient guest tax fund shall be credited to the
tourism and convention promotion fund of such county or city and shall only be expended
for convention and tourism promotion, except that not more than 20% of the moneys
credited to such fund shall be expended for tourism promotion.

      Sec.  5. K.S.A. 1999 Supp. 12-1698 is hereby amended to read as follows: 12-1698. (a)
Any tax levied and collected pursuant to K.S.A. 12-1697, and amendments thereto, shall
become due and payable by the business monthly, on or before the 25th day of the month
immediately succeeding the month in which it is collected, with the first payment due and
payable on or before the 25th day of the month specified in the resolution of the governing
body which levies the tax, but any person filing an annual or quarterly return under the
Kansas retailers' sales tax act, as prescribed in K.S.A. 79-3607, and amendments thereto,
shall, upon such conditions as the secretary of revenue may prescribe, pay the tax required
by this act on the same basis and at the same time such person pays the retailers' sales tax.
Each business shall make a true report to the department of revenue, on a form prescribed
by the secretary of revenue, providing such information as may be necessary to determine
the amounts to which any such tax shall apply for all gross rental receipts for the applicable
month or months, which report shall be accompanied by the tax disclosed thereby. Records
of gross rental receipts shall be kept separate and apart from the records of other retail sales
made by a business in order to facilitate the examination of books and records as provided
herein.

      (b) The secretary of revenue or the secretary's authorized representative shall have the
right at all reasonable times during business hours to make such examination and inspection
of the books and records of a business as may be necessary to determine the accuracy of
such reports.

      (c) The secretary of revenue is hereby authorized to administer and collect any transient
guest tax levied pursuant to this act and to adopt such rules and regulations as may be
necessary for the efficient and effective administration and enforcement of the collection
thereof. Whenever any business liable to pay any transient guest tax refuses or neglects to
pay the same, the amount, including any penalty, shall be collected in the manner prescribed
for the collection of the retailers' sales tax by K.S.A. 79-3617, and amendments thereto. All
of the taxes collected under the provisions of this act shall be paid into the state treasury
daily by the secretary of revenue, and the state treasurer shall place 2% of all taxes so
collected in the state general fund to defray the expenses of the department in administration
and enforcement of the collection thereof. The remainder of such taxes shall be credited to
the county or city transient guest tax fund, which fund is hereby established. All moneys in
the county or city transient guest tax fund shall be remitted at least quarterly by the state
treasurer to the county or city treasurer of each county or city levying a transient guest tax
under the provisions of this act in the proportion, as certified by the director of taxation,
that the amount collected from such tax in each such county or city bears to the total amount
collected from such taxes in all counties or cities for the period covered by the distribution.

      (d) The director of taxation shall provide, upon request by a city or county clerk or
treasurer of any city or county levying a transient guest tax, a monthly report monthly reports
identifying each person doing business in such city or county to which such tax is applicable
and setting forth the tax liability and the amount of such tax remitted by such business
during the preceding month, and identifying each business location maintained by the person
within such city or county. Such report shall be made available to the clerk or treasurer of
such city or county within a reasonable time after it has been requested from the director
of taxation. The director of taxation shall be allowed to assess a reasonable fee for the
issuance of such report. Information received by any city or county pursuant to this section
shall be kept confidential, and it shall be unlawful for any officer or employee of such city
or county to divulge any such information in any manner. Any violation of this paragraph
by a city or county officer or employee is a class B misdemeanor, and such officer or
employee shall be dismissed from office.

      (e) Except as otherwise provided in K.S.A. 12-1774, and amendments thereto, all such
moneys received by the county or city treasurer from disbursements from the county or city
transient guest tax fund shall be credited to the tourism and convention promotion fund of
such county or city and shall only be expended for convention and tourism promotion.

      Sec.  6. K.S.A. 1999 Supp. 12-2536 is hereby amended to read as follows: 12-2536. The
Kansas and Missouri metropolitan culture district compact is hereby enacted into law and
entered into by the state of Kansas with the state of Missouri legally joining therein, in the
form substantially as follows:

Kansas and Missouri Metropolitan
Culture District Compact


Article I.--Agreement and Pledge


      The states of Kansas and Missouri agree to and pledge, each to the other, faithful
cooperation in the future planning and development of the metropolitan culture district,
holding in high trust for the benefit of its people and of the nation, the special blessings
and natural advantages thereof.

Article II.--Policy and Purpose


      The party states, desiring by common action to fully utilize and improve their cultural
facilities, coordinate the services of their cultural organizations, enhance the cultural
activities of their citizens, and achieve solid financial support for such cultural facilities,
organizations and activities, declare that it is the policy of each state to realize such desires
on a basis of cooperation with one another, thereby serving the best interests of their
citizenry and effecting economies in capital expenditures and operational costs. The purpose
of this compact is to provide for the creation of a metropolitan culture district as the means
to implementation of the policy herein declared with the most beneficial and economical
use of human and material resources.

Article III.--Definitions


      As used in this compact, unless the context clearly requires otherwise:

      (a) ``Metropolitan culture district'' means a political subdivision of the states of Kansas
and Missouri which is created under and pursuant to the provisions of this compact and
which is composed of the counties in the states of Kansas and Missouri which act to create
or to become a part of the district in accordance with the provisions of Article IV.

      (b) ``Commission'' means the governing body of the metropolitan culture district.

      (c) ``Cultural activities'' means sports or activities which contribute to or enhance the
aesthetic, artistic, historical, intellectual or social development or appreciation of members
of the general public.

      (d) ``Cultural organizations'' means nonprofit and tax exempt social, civic or community
organizations and associations which are dedicated to the development, provision, operation,
supervision, promotion or support of cultural activities in which members of the general
public may engage or participate.

      (e) ``Cultural facilities'' means facilities operated or used for sports or participation or
engagement in cultural activities by members of the general public.

Article IV.--The District


      (a) The counties in Kansas and Missouri eligible to create and initially compose the
metropolitan culture district shall be those counties which meet one or more of the following
criteria: (1) The county has a population in excess of 300,000, and is adjacent to the state
line; (2) the county contains a part of a city with a population according to the most recent
federal census of at least 400,000; or (3) the county is contiguous to any county described
in provisions (1) or (2) of this subpart (a). The counties of Johnson in Kansas and Jackson
in Missouri shall be sine qua non to the creation and initial composition of the district.
Additional counties in Kansas and Missouri shall be eligible to become a part of the
metropolitan culture district if such counties are contiguous to any one or more of the
counties which compose the district and within 60 miles of the counties required by this
article to establish the district.

      (b)  (1) Whenever the governing body of any county which is eligible to create or
become a part of the metropolitan culture district shall determine that creation of or
participation in the district is in the best interests of the citizens of the county and that the
levy of a tax to provide on a cooperative basis with another county or other counties for
financial support of the district would be economically practical and cost beneficial to the
citizens of the county, the governing body may adopt by majority vote a resolution
authorizing the same.

      (2) Whenever a petition, signed by not less than the number of qualified electors of an
eligible county equal to 5% of the number of ballots cast and counted at the last preceding
gubernatorial election held in the county and requesting adoption of a resolution authorizing
creation of or participation in the metropolitan culture district and the levy of a tax for the
purpose of contributing to the financial support of the district, is filed with the governing
body of the county, the governing body shall adopt such a resolution.

      (3) Implementation of a resolution adopted under this subpart (b) shall be conditioned
upon approval of the resolution by a majority of the qualified electors of the county voting
at an election conducted for such purpose.

      (c)  (1) Upon adoption of a resolution pursuant to subpart (b)(1) or subpart (b)(2), the
governing body of the county shall request, within 36 months after adoption of the
resolution, the county election officer to submit to the qualified electors of the county the
question of whether the governing body shall be authorized to implement the resolution.
The resolution shall be printed on the ballot and in the notice of election. The question
shall be submitted to the electors of the county at the primary or general election next
following the date of the request filed with the county election officer. If a majority of the
qualified electors are opposed to implementation of the resolution authorizing creation of
or participation in the district and the levy of a tax for financial support thereof, the same
shall not be implemented. The governing body of the county may renew procedures for
authorization to create or become a part of the district and to levy a tax for financial support
thereof at any time following rejection of the question.

      (2) The ballot for the proposition in any county shall be substantially the following form:

``Shall a retail sales tax of
Yes
;lx
  (insert amount, not to exceed 1/4 cent)
be levied and collected in Kansas and Missouri metropolitan cultural district consisting of the county(ies) of
for the support(insert name of counties)
of cultural facilities and organizations within the district?''
No
;lx
      The governing body of the county may place additional language on the ballot to describe
the use or allocation of the funds.

      (d)  (1) The metropolitan culture district shall be created when implementation of a
resolution authorizing the creation of the district and the levy of a tax for contribution to
the financial support thereof is approved by respective majorities of the qualified electors
of at least Johnson county, Kansas, and Jackson county, Missouri.

      (2) When implementation of a resolution authorizing participation in the metropolitan
culture district and the levy of a tax for contribution to the financial support thereof is
approved by a majority of the qualified electors of any county eligible to become a part of
the district, the governing body of the county shall proceed with the performance of all
things necessary and incidental to participation in the district.

      (3) Any question for the levy of a tax submitted after July 1, 2000, may be submitted to
the electors of the county at the primary or general election next following the date of the
request filed with the county election officer; at a special election called and held as otherwise
provided by law; at an election called and held on the first Tuesday after the first Monday
in February, except in presidential election years; at an election called and held on the first
Tuesday after the first Monday in March, June, August or November; or at an election called
and held on the first Tuesday in April, except that no question for a tax levy may be submitted
to the electors prior to January 1, 2002.
      (4) No question shall be submitted to the electors authorizing the levy of a tax the
proceeds of which will be exclusively dedicated to sports or sports facilities.

      (e) Any of the counties composing the metropolitan culture district may withdraw from
the district by adoption of a resolution and approval of the resolution by a majority of the
qualified electors of the county, all in the same manner provided in this Article IV for
creating or becoming a part of the metropolitan culture district. The governing body of a
withdrawing county shall provide for the sending of formal written notice of withdrawal
from the district to the governing body of the other county or each of the other counties
comprising the district. Actual withdrawal shall not take effect until 90 days after notice has
been sent. A withdrawing county shall not be relieved from any obligation which such county
may have assumed or incurred by reason of being a part of the district, including, but not
limited to, the retirement of any outstanding bonded indebtedness of the district.

Article V.--The Commission


      (a) The metropolitan culture district shall be governed by the metropolitan culture
commission which shall be a body corporate and politic and which shall be composed of
resident electors of the states of Kansas and Missouri, respectively, as follows: (1) A member
of the governing body of each county which is a part of the district, who shall be appointed
by majority vote of such governing body; (2) a member of the governing body of each city,
with a population according to the most recent federal census of at least 50,000, located in
whole or in part within each county which is a part of the district, who shall be appointed
by majority vote of such governing body; and (3) two members of the governing body of a
county with a consolidated or unified county government and city of the first class which is
a part of the district, who shall be appointed by majority vote of such governing body; (3)
(4) a member of the arts commission of Kansas or the Kansas commission for the humanities,
who shall be appointed by the governor of Kansas; and (5) a member of the arts commission
of Missouri or the Missouri humanities council, who shall be appointed by the governor of
Missouri. To the extent possible, the gubernatorial appointees to the commission shall be
residents of the district. The term of each commissioner initially appointed by a county
governing body shall expire concurrently with such commissioner's tenure as a county officer
or three years after the date of appointment as a commissioner, whichever occurs sooner.
The term of each commissioner succeeding a commissioner initially appointed by a county
governing body shall expire concurrently with such successor commissioner's tenure as a
county officer or four years after the date of appointment as a commissioner, whichever
occurs sooner. The term of each commissioner initially appointed by a city governing body
shall expire concurrently with such commissioner's tenure as a city officer or two years after
the date of appointment as a commissioner, whichever occurs sooner. The term of each
commissioner succeeding a commissioner initially appointed by a city governing body shall
expire concurrently with such successor commissioner's tenure as a city officer or four years
after the date of appointment as a commissioner, whichever occurs sooner. The term of
each commissioner appointed by the governor of Kansas or the governor of Missouri shall
expire concurrently with the term of the appointing governor, the commissioner's tenure as
a state officer, or four years after the date of appointment as a commissioner of the district,
whichever occurs sooner. Any vacancy occurring in a commissioner position for reasons
other than expiration of terms of office shall be filled for the unexpired term by appointment
in the same manner that the original appointment was made. Any commissioner may be
removed for cause by the appointing authority of the commissioner.

      (b) The commission shall select annually, from its membership, a chairperson, a vice-
chairperson, and a treasurer. The treasurer shall be bonded in such amounts as the
commission may require.

      (c) The commission may appoint such officers, agents and employees as it may require
for the performance of its duties, and shall determine the qualifications and duties and fix
the compensation of such officers, agents and employees.

      (d) The commission shall fix the time and place at which its meetings shall be held.
Meetings shall be held within the district and shall be open to the public. Public notice shall
be given of all meetings.

      (e) A majority of the commissioners from each state shall constitute, in the aggregate,
a quorum for the transaction of business. No action of the commission shall be binding
unless taken at a meeting at which at least a quorum is present, and unless a majority of the
commissioners from each state, present at such meeting, shall vote in favor thereof. No
action of the commission taken at a meeting thereof shall be binding unless the subject of
such action is included in a written agenda for such meeting, the agenda and notice of
meeting having been mailed to each commissioner by postage paid first-class mail at least
14 calendar days prior to the meeting.

      (f) The commissioners from each state shall be subject to the provisions of the laws of
the states of Kansas and Missouri, respectively, which relate to conflicts of interest of public
officers and employees. If any commissioner has a direct or indirect financial interest in any
cultural facility, organization or activity supported by the district or commission or in any
other business transaction of the district or commission, the commissioner shall disclose
such interest in writing to the other commissioners and shall abstain from voting on any
matter relating to such facility, organization or activity or to such business transaction.

      (g) If any action at law or equity, or other legal proceeding, shall be brought against any
commissioner for any act or omission arising out of the performance of duties as a
commissioner, the commissioner shall be indemnified in whole and held harmless by the
commission for any judgment or decree entered against the commissioner and, further, shall
be defended at the cost and expense of the commission in any such proceeding.

Article VI.--Powers and Duties of the Commission


      (a) The commission shall adopt a seal and suitable bylaws governing its management
and procedure.

      (b) The commission has the power to contract and to be contracted with, and to sue
and to be sued.

      (c) The commission may receive for any of its purposes and functions any contributions
or moneys appropriated by counties or cities and may solicit and receive any and all
donations, and grants of money, equipment, supplies, materials and services from any state
or the United States or any agency thereof, or from any institution, foundation, organization,
person, firm or corporation, and may utilize and dispose of the same.

      (d) Upon receipt of recommendations from the advisory committee provided in
subsection (g), the commission may provide donations, contributions and grants or other
support, financial or otherwise, for or in aid of cultural organizations, facilities or activities
in counties which are part of the district. In determining whether to provide any such support
the commission shall consider the following factors:

      (1) Economic impact upon the district;

      (2) cultural benefit to citizens of the district and to the general public;

      (3) contribution to the quality of life and popular image of the district;

      (4) contribution to the geographical balance of cultural facilities and activities within
and outside the district;

      (5) the breadth of popular appeal within and outside the district;

      (6) the needs of the community as identified in an objective cultural needs assessment
study of the metropolitan area; and

      (7) any other factor deemed appropriate by the commission.

      (e) The commission may own and acquire by gift, purchase, lease or devise cultural
facilities within the territory of the district. The commission may plan, construct, operate
and maintain and contract for the operation and maintenance of cultural facilities within
the territory of the district. The commission may sell, lease or otherwise dispose of cultural
facilities within the territory of the district.

      (f) At any time following five years from and after the creation of the metropolitan
cultural district as provided in paragraph (1) of subsection (d) of article IV, the commission,
may borrow moneys for the planning, construction, equipping, operation, maintenance,
repair, extension, expansion, or improvement of any cultural facility and, in that regard, the
commission at such time may:

      (1) Issue notes, bonds or other instruments in writing of the commission in evidence of
the sum or sums to be borrowed. No notes, bonds or other instruments in writing shall be
issued pursuant to this subsection until the issuance of such notes, bonds or instruments
has been submitted to and approved by a majority of the qualified electors of the district
voting at an election called and held thereon. Such election shall be called and held in the
manner provided by the general bond law;

      (2) issue refunding notes, bonds or other instruments in writing for the purpose of
refunding, extending or unifying the whole or any part of its outstanding indebtedness from
time to time, whether evidenced by notes, bonds or other instruments in writing. Such
refunding notes, bonds or other instruments in writing shall not exceed in amount the
principal of the outstanding indebtedness to be refunded and the accrued interest thereon
to the date of such refunding;

      (3) provide that all notes, bonds and other instruments in writing issued hereunder shall
or may be payable, both as to principal and interest, from sales tax revenues authorized
under this compact and disbursed to the district by counties comprising the district,
admissions and other revenues collected from the use of any cultural facility or facilities
constructed hereunder, or from any other resources of the commission, and further may be
secured by a mortgage or deed of trust upon any property interest of the commission; and

      (4) prescribe the details of all notes, bonds or other instruments in writing, and of the
issuance and sale thereof. The commission shall have the power to enter into covenants with
the holders of such notes, bonds or other instruments in writing, not inconsistent with the
powers granted herein, without further legislative authority.

      (g) The commission shall appoint an advisory committee composed of members of the
general public consisting of an equal number of persons from both the states of Kansas and
Missouri who have demonstrated interest, expertise, knowledge or experience in cultural
organizations or activities. The advisory committee shall make recommendations annually
to the commission regarding donations, contributions and grants or other support, financial
or otherwise, for or in aid of cultural organizations, facilities and activities in counties which
are part of the district.

      (h) The commission may provide for actual and necessary expenses of commissioners
and advisory committee members incurred in the performance of their official duties.

      (i) The commission shall cause to be prepared annually a report on the operations and
transactions conducted by the commission during the preceding year. The report shall be
submitted to the legislatures and governors of the compacting states, to the governing bodies
of the counties comprising the district, and to the governing body of each city that appoints
a commissioner. The commission shall publish the annual report in the official county
newspaper of each of the counties comprising the district.

      (j) The commission has the power to apply to the congress of the United States for its
consent and approval of the compact. In the absence of the consent of congress and until
consent is secured, the compact is binding upon the states of Kansas and Missouri in all
respects permitted by law for the two states, without the consent of congress, for the
purposes enumerated and in the manner provided in the compact.

      (k) The commission has the power to perform all other necessary and incidental
functions and duties and to exercise all other necessary and appropriate powers not
inconsistent with the constitution or laws of the United States or of either of the states of
Kansas or Missouri to effectuate the same.

Article VII.--Finance


      (a) The moneys necessary to finance the operation of the metropolitan culture district
and the execution of the powers, duties and responsibilities of the commission shall be
appropriated to the commission by the counties comprising the district. The moneys to be
appropriated to the commission shall be raised by the governing bodies of the respective
counties by the levy of taxes as authorized by the legislatures of the respective party states.

      (b) The commission shall not incur any indebtedness or obligation of any kind; nor shall
the commission pledge the credit of either or any of the counties comprising the district or
either of the states party to this compact, except as authorized by article VI. The budget of
the district shall be prepared, adopted and published as provided by law for other political
subdivisions of the party states. No budget shall be adopted by the commission until it has
been submitted to and reviewed by the governing bodies of the counties comprising the
district and the governing body of each city represented on the commission.

      (c) The commission shall keep accurate accounts of all receipts and disbursements. The
receipts and disbursements of the commission shall be audited yearly by a certified or
licensed public accountant and the report of the audit shall be included in and become part
of the annual report of the commission.

      (d) The accounts of the commission shall be open at any reasonable time for inspection
by duly authorized representatives of the compacting states, the counties comprising the
district, the cities that appoint a commissioner, and other persons authorized by the
commission.

Article VIII.--Entry into Force


      (a) This compact shall enter into force and become effective and binding upon the states
of Kansas and Missouri when it has been enacted into law by the legislatures of the respective
states.

      (b) Amendments to the compact shall become effective upon enactment by the
legislatures of the respective states.

Article IX.--Termination


      This compact shall continue in force and remain binding upon a party state until its
legislature shall have enacted a statute repealing the same and providing for the sending of
formal written notice of enactment of such statute to the legislature of the other party state.
Upon enactment of such a statute by the legislature of either party state, the sending of
notice thereof to the other party state, and payment of any obligations which the
metropolitan culture district commission may have incurred prior to the effective date of
such statute, including, but not limited to, the retirement of any outstanding bonded
indebtedness of the district, the agreement of the party states embodied in the compact
shall be deemed fully executed, the compact shall be null and void and of no further force
or effect, the metropolitan culture district shall be dissolved, and the metropolitan culture
district commission shall be abolished.

Article X.--Construction and Severability


      The provisions of this compact shall be liberally construed and shall be severable. If any
phrase, clause, sentence or provision of this compact is declared to be contrary to the
constitution of either of the party states or of the United States or the applicability thereof
to any government, agency, person or circumstance is held invalid, the validity of the
remainder of this compact and the applicability thereof to any government, agency, person
or circumstance shall not be affected thereby. If this compact shall be held contrary to the
constitution of either of the states party thereto, the compact shall thereby be nullified and
voided and of no further force or effect.

      Sec.  7. K.S.A. 1999 Supp. 75-5133 is hereby amended to read as follows: 75-5133. (a)
Except as otherwise more specifically provided by law, all information received by the
director of taxation from applications for licensure or registration made or returns or reports
filed under the provisions of any law imposing any excise tax administered by the director,
or from any investigation conducted under such provisions, shall be confidential, and it shall
be unlawful for any officer or employee of the department of revenue to divulge any such
information except in accordance with other provisions of law respecting the enforcement
and collection of such tax, in accordance with proper judicial order and as provided in K.S.A.
74-2424, and amendments thereto.

      (b) Nothing in this section shall be construed to prohibit the publication of statistics, so
classified as to prevent identification of particular reports or returns and the items thereof,
or the inspection of returns by the attorney general. Nothing in this section shall prohibit
the post auditor from access to all such excise tax reports or returns in accordance with and
subject to the provisions of subsection (g) of K.S.A. 46-1106, and amendments thereto.
Nothing in this section shall be construed to prohibit the disclosure of taxpayer information
from excise tax returns to persons or entities contracting with the secretary of revenue where
the secretary has determined disclosure of such information is essential for completion of
the contract and has taken appropriate steps to preserve confidentiality.

      (c) Notwithstanding the foregoing provisions of this section, the director of taxation may
provide: (1) Such information from returns and reports filed under article 42 of chapter 79
of the Kansas Statutes Annotated to county appraisers as is necessary to insure proper
valuations of property. Information from such returns and reports may also be exchanged
with any other state agency administering and collecting conservation or other taxes and
fees imposed on or measured by mineral production; and (2) such information from returns
and applications for registration filed pursuant to K.S.A. 12-187, and amendments thereto,
and K.S.A. 79-3601, and amendments thereto, to a city or county treasurer or clerk to explain
the basis of statistics contained in reports required by K.S.A. 12-189, and amendments
thereto, 12-1694, and amendments thereto, and 12-1698, and amendments thereto.

      (d) Nothing in this section shall prohibit the disclosure of the following oil and gas
production statistics received by the department of revenue in accordance with K.S.A. 79-
4216 et seq. and amendments thereto: Volumes of production by well name, well number,
operator's name and identification number assigned by the state corporation commission,
lease name, leasehold property description, county of production or zone of production,
name of purchaser and purchaser's tax identification number assigned by the department
of revenue, name of transporter, field code number or lease code, tax period, exempt
production volumes by well name or lease, or any combination of this information.

      (d) (e) Any person receiving any information under the provisions of subsection (b) or,
(c) or (d) shall be subject to the confidentiality provisions of subsection (a) and to the penalty
provisions of subsection (e) (f).

      (e) (f) Any violation of this section shall be a class B nonperson misdemeanor, and if
the offender is an officer or employee of this state, such officer or employee shall be
dismissed from office.

      Sec.  8. K.S.A. 1999 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) any 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 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, (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 is 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;

      (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.  9. K.S.A. 1999 Supp. 79-3603 is hereby amended to read as follows: 79-3603. For
the privilege of engaging in the business of selling tangible personal property at retail in this
state or rendering or furnishing any of the services taxable under this act, there is hereby
levied and there shall be collected and paid a tax at the rate of 4.9% and, within a
redevelopment district established pursuant to K.S.A. 74-8921, and amendments thereto,
there is hereby levied and there shall be collected and paid an additional tax at the rate of
2% until the earlier of the date the bonds issued to finance or refinance the redevelopment
project have been paid in full or the final scheduled maturity of the first series of bonds
issued to finance any part of the project upon:

      (a) The gross receipts received from the sale of tangible personal property at retail
within this state;

      (b)  (1) the gross receipts from intrastate telephone or telegraph services and (2) the
gross receipts received from the sale of interstate telephone or telegraph services, which
(A) originate within this state and terminate outside the state and are billed to a customer's
telephone number or account in this state; or (B) originate outside this state and terminate
within this state and are billed to a customer's telephone number or account in this state
except that the sale of interstate telephone or telegraph service does not include: (A) Any
interstate incoming or outgoing wide area telephone service or wide area transmission type
service which entitles the subscriber to make or receive an unlimited number of
communications to or from persons having telephone service in a specified area which is
outside the state in which the station provided this service is located; (B) any interstate
private communications service to the persons contracting for the receipt of that service
that entitles the purchaser to exclusive or priority use of a communications channel or group
of channels between exchanges; (C) any value-added nonvoice service in which computer
processing applications are used to act on the form, content, code or protocol of the
information to be transmitted; (D) any telecommunication service to a provider of
telecommunication services which will be used to render telecommunications services,
including carrier access services; or (E) any service or transaction defined in this section
among entities classified as members of an affiliated group as provided by federal law (U.S.C.
Section 1504). For the purposes of this subsection the term gross receipts does not include
purchases of telephone, telegraph or telecommunications using a prepaid telephone calling
card or pre-paid authorization number. As used in this subsection, a pre-paid telephone
calling card or pre-paid authorization number means the right to exclusively make telephone
calls, paid for in advance, with the prepaid value measured in minutes or other time units,
that enables the origination of calls using an access number or authorization code or both,
whether manually or electronically dialed;

      (c) the gross receipts from the sale or furnishing of gas, water, electricity and heat,
which sale is not otherwise exempt from taxation under the provisions of this act, and
whether furnished by municipally or privately owned utilities;

      (d) the gross receipts from the sale of meals or drinks furnished at any private club,
drinking establishment, catered event, restaurant, eating house, dining car, hotel, drugstore
or other place where meals or drinks are regularly sold to the public;

      (e) the gross receipts from the sale of admissions to any place providing amusement,
entertainment or recreation services including admissions to state, county, district and local
fairs, but such tax shall not be levied and collected upon the gross receipts received from
sales of admissions to any cultural and historical event which occurs triennially;

      (f) the gross receipts from the operation of any coin-operated device dispensing or
providing tangible personal property, amusement or other services except laundry services,
whether automatic or manually operated;

      (g) the gross receipts from the service of renting of rooms by hotels, as defined by K.S.A.
36-501 and amendments thereto, or by accommodation brokers, as defined by K.S.A. 12-
1692, and amendments thereto;

      (h) the gross receipts from the service of renting or leasing of tangible personal property
except such tax shall not apply to the renting or leasing of machinery, equipment or other
personal property owned by a city and purchased from the proceeds of industrial revenue
bonds issued prior to July 1, 1973, in accordance with the provisions of K.S.A. 12-1740
through 12-1749, and amendments thereto, and any city or lessee renting or leasing such
machinery, equipment or other personal property purchased with the proceeds of such
bonds who shall have paid a tax under the provisions of this section upon sales made prior
to July 1, 1973, shall be entitled to a refund from the sales tax refund fund of all taxes paid
thereon;

      (i) the gross receipts from the rendering of dry cleaning, pressing, dyeing and laundry
services except laundry services rendered through a coin-operated device whether automatic
or manually operated;

      (j) the gross receipts from the rendering of the services of washing and washing and
waxing of vehicles;

      (k) the gross receipts from cable, community antennae and other subscriber radio and
television services;

      (l)  (1) except as otherwise provided by paragraph (2), the gross receipts received from
the sales of tangible personal property to all contractors, subcontractors or repairmen of
materials and supplies for use by them in erecting structures for others, or building on, or
otherwise improving, altering, or repairing real or personal property of others;.

      (2) Any such contractor, subcontractor or repairman who maintains an inventory of
such property both for sale at retail and for use by them for the purposes described by
paragraph (1) shall be deemed a retailer with respect to purchases for and sales from such
inventory, except that the gross receipts received from any such sale, other than a sale at
retail, shall be equal to the total purchase price paid for such property and the tax imposed
thereon shall be paid by the deemed retailer;

      (m) the gross receipts received from fees and charges by public and private clubs,
drinking establishments, organizations and businesses for participation in sports, games and
other recreational activities, but such tax shall not be levied and collected upon the gross
receipts received from: (1) Fees and charges by any political subdivision, by any organization
exempt from property taxation pursuant to paragraph Ninth of K.S.A. 79-201, and
amendments thereto, or by any youth recreation organization exclusively providing services
to persons 18 years of age or younger which is exempt from federal income taxation pursuant
to section 501(c)(3) of the federal internal revenue code of 1986, for participation in sports,
games and other recreational activities; and (2) entry fees and charges for participation in a
special event or tournament sanctioned by a national sporting association to which spectators
are charged an admission which is taxable pursuant to subsection (e);

      (n) the gross receipts received from dues charged by public and private clubs, drinking
establishments, organizations and businesses, payment of which entitles a member to the
use of facilities for recreation or entertainment, but such tax shall not be levied and collected
upon the gross receipts received from: (1) Dues charged by any organization exempt from
property taxation pursuant to paragraphs Eighth and Ninth of K.S.A. 79-201, and
amendments thereto; and (2) sales of memberships in a nonprofit organization which is
exempt from federal income taxation pursuant to section 501 (c)(3) of the federal internal
revenue code of 1986, and whose purpose is to support the operation of a nonprofit zoo;

      (o) the gross receipts received from the isolated or occasional sale of motor vehicles or
trailers but not including: (1) The transfer of motor vehicles or trailers by a person to a
corporation solely in exchange for stock securities in such corporation; or (2) the transfer
of motor vehicles or trailers by one corporation to another when all of the assets of such
corporation are transferred to such other corporation; or (3) the sale of motor vehicles or
trailers which are subject to taxation pursuant to the provisions of K.S.A. 79-5101 et seq.,
and amendments thereto, by an immediate family member to another immediate family
member. For the purposes of clause (3), immediate family member means lineal ascendants
or descendants, and their spouses. In determining the base for computing the tax on such
isolated or occasional sale, the fair market value of any motor vehicle or trailer traded in by
the purchaser to the seller may be deducted from the selling price;

      (p) the gross receipts received for the service of installing or applying tangible personal
property which when installed or applied is not being held for sale in the regular course of
business, and whether or not such tangible personal property when installed or applied
remains tangible personal property or becomes a part of real estate, except that no tax shall
be imposed upon the service of installing or applying tangible personal property in
connection with the original construction of a building or facility, the original construction,
reconstruction, restoration, remodeling, renovation, repair or replacement of a residence or
the construction, reconstruction, restoration, replacement or repair of a bridge or highway.

      For the purposes of this subsection:

      (1) ``Original construction'' shall mean the first or initial construction of a new building
or facility. The term ``original construction'' shall include the addition of an entire room or
floor to any existing building or facility, the completion of any unfinished portion of any
existing building or facility and the restoration, reconstruction or replacement of a building
or facility damaged or destroyed by fire, flood, tornado, lightning, explosion or earthquake,
but such term, except with regard to a residence, shall not include replacement, remodeling,
restoration, renovation or reconstruction under any other circumstances;

      (2) ``building'' shall mean only those enclosures within which individuals customarily
are employed, or which are customarily used to house machinery, equipment or other
property, and including the land improvements immediately surrounding such building;

      (3) ``facility'' shall mean a mill, plant, refinery, oil or gas well, water well, feedlot or any
conveyance, transmission or distribution line of any cooperative, nonprofit, membership
corporation organized under or subject to the provisions of K.S.A. 17-4601 et seq., and
amendments thereto, or of any municipal or quasi-municipal corporation, including the land
improvements immediately surrounding such facility; and

      (4) ``residence'' shall mean only those enclosures within which individuals customarily
live;

      (q) the gross receipts received for the service of repairing, servicing, altering or
maintaining tangible personal property, except computer software described in subsection
(s), which when such services are rendered is not being held for sale in the regular course
of business, and whether or not any tangible personal property is transferred in connection
therewith. The tax imposed by this subsection shall be applicable to the services of repairing,
servicing, altering or maintaining an item of tangible personal property which has been and
is fastened to, connected with or built into real property;

      (r) the gross receipts from fees or charges made under service or maintenance
agreement contracts for services, charges for the providing of which are taxable under the
provisions of subsection (p) or (q);

      (s) the gross receipts received from the sale of computer software, and the sale of the
services of modifying, altering, updating or maintaining computer software. As used in this
subsection, ``computer software'' means information and directions loaded into a computer
which dictate different functions to be performed by the computer. Computer software
includes any canned or prewritten program which is held or existing for general or repeated
sale, even if the program was originally developed for a single end user as custom computer
software. The sale of computer software or services does not include: (1) The initial sale of
any custom computer program which is originally developed for the exclusive use of a single
end user; or (2) those services rendered in the modification of computer software when the
modification is developed exclusively for a single end user only to the extent of the
modification and only to the extent that the actual amount charged for the modification is
separately stated on invoices, statements and other billing documents provided to the end
user. The services of modification, alteration, updating and maintenance of computer
software shall only include the modification, alteration, updating and maintenance of
computer software taxable under this subsection whether or not the services are actually
provided; and

      (t) the gross receipts received for telephone answering services, including mobile phone
services, beeper services and other similar services; and

      (u) the gross receipts received from the sale of prepaid telephone calling cards or pre-
paid authorization numbers and the recharge of such cards or numbers. A pre-paid
telephone calling card or pre-paid authorization number means the right to exclusively make
telephone calls, paid for in advance, with the prepaid value measured in minutes or other
time units, that enables the origination of calls using an access number or authorization
code or both, whether manually or electronically dialed. If the sale or recharge of such card
or number does not take place at the vendor's place of business, it shall be conclusively
determined to take place at the customer's shipping address; if there is no item shipped
then it shall be the customer's billing address.

      Sec.  10. K.S.A. 1999 Supp. 79-3606, as amended by section 1 of 2000 House Bill No.
2011, 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. 1999 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1999 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 or a mid-level practitioner as defined by K.S.A. 65-1626, and
amendments thereto;

      (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) (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. Such term shall not include any facility primarily operated for the purpose of
conveying or assisting in the conveyance of natural gas, electricity, oil or water. 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) portable plants for aggregate concrete, bulk cement and
asphalt including cement mixing drums to be attached to a motor vehicle; (D) 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 (E) 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, transmission and distribution equipment not primarily used in a
production, warehousing or material handling operation at the plant or facility, including
the means of conveyance of natural gas, electricity, oil or water, and equipment related
thereto, located outside the plant or facility;

      (D) office machines and equipment including computers and related peripheral
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 gas;

      (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; and

      (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;

      (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 501(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 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 such organization which would be exempt from taxation under
the provisions of this section if purchased directly by such organization. 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 such organization. When any
such organization 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 such organization
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, such organization 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. Sales tax paid on and after July 1, 1998, but prior to the effective date of this act
upon the gross receipts received from any sale exempted by the amendatory provisions of
this subsection shall be refunded. Each claim for a sales tax refund shall be verified and
submitted to the director of taxation upon forms furnished by the director and shall be
accompanied by any additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as determined under the
provisions of this subsection. All refunds shall be paid from the sales tax refund fund upon
warrants of the director of accounts and reports pursuant to vouchers approved by the
director or the director's designee;

      (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;

      (ccc) on and after July 1, 1999, all sales of tangible personal property and services
purchased by a primary care clinic or health center the primary purpose of which is to
provide services to medically underserved individuals and families, and which is exempt
from federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue
code, 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 such clinic or center which would be exempt from
taxation under the provisions of this section if purchased directly by such clinic or center.
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 such clinic or
center. When any such clinic or center 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 such clinic or center 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, such clinic
or center 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;

      (ddd) on and after January 1, 1999, and before January 1, 2000, all sales of materials
and services purchased by any class II or III railroad as classified by the federal surface
transportation board for the construction, renovation, repair or replacement of class II or
III railroad track and facilities used directly in interstate commerce. In the event any such
track or facility for which materials and services were purchased sales tax exempt is not
operational for five years succeeding the allowance of such exemption, the total amount of
sales tax which would have been payable except for the operation of this subsection shall
be recouped in accordance with rules and regulations adopted for such purpose by the
secretary of revenue;

      (eee) on and after January 1, 1999, and before January 1, 2000 2001, all sales of materials
and services purchased for the original construction, reconstruction, repair or replacement
of grain storage facilities, including railroad sidings providing access thereto; and

      (fff) all sales of material 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 commercial grain storage facility, whether used for grain handling, grain storage, grain
refining or processing, or other grain treatment operation; and

      (ggg) all sales of tangible personal property and services purchased by or on behalf of
the Kansas Academy of Science which is exempt from federal income taxation pursuant to
section 501(c)(3) of the federal internal revenue code of 1986, and used solely by such
academy for the preparation, publication and dissemination of education materials.

      Sec.  11. K.S.A. 1999 Supp. 79-3633 is hereby amended to read as follows: 79-3633. As
used in K.S.A. 79-3620 and 79-3632 to 79-3639 and amendments thereto, unless the context
clearly indicates otherwise:

      (a) ``Income'' means adjusted gross income determined under the Kansas income tax
act without regard to the modifications specified by subsections (c)(i), (ii) regarding Kansas
public employee retirement system retirement benefits, (vii), (ix) and (xii) of K.S.A. 79-
32,117, and amendments thereto.

      (b) ``Household'' means a claimant and all other persons for whom a personal exemption
is claimed who together occupy a common residence.

      (c) ``Claimant'' means a person who has filed a claim for a refund or credit under the
provisions of this act and was, during the entire calendar year preceding the year in which
the claim was filed for relief under this act, domiciled in this state, was a member of a
household, had income of not more than $25,000 in the calendar year for which a claim is
filed and was: (1) A person having a disability; (2) a person other than a person included
under (1), who has attained 55 years of age in the calendar year for which a claim is filed
or (3) a person other than a person included under (1) or (2) having one or more dependent
children under 18 years of age residing at the person's homestead during the calendar year
for which a claim is filed.

      (d) ``Head of household'' means the person filing a claim under the provisions of this
act.

      (e) ``Disability'' means (1) inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be expected to
result in death or has lasted or can be expected to last for a continuous period of not less
than 12 months, and an individual shall be determined to be under a disability only if the
physical or mental impairment or impairments are of such severity that the individual is not
only unable to do the individual's previous work but cannot, considering age, education and
work experience, engage in any other kind of substantial gainful work which exists in the
national economy, regardless of whether such work exists in the immediate area in which
the individual lives or whether a specific job vacancy exists for the individual, or whether
the individual would be hired if application was made for work. For purposes of the
preceding sentence (with respect to any individual), ``work which exists in the national
economy'' means work which exists in significant numbers either in the region where the
individual lives or in several regions of the country; for purposes of this subsection, a
``physical or mental impairment'' is an impairment that results from anatomical, physiological
or psychological abnormalities which are demonstrable by medically acceptable clinical and
laboratory diagnostic techniques; or

      (2) blindness and inability by reason of blindness to engage in substantial gainful activity
requiring skills or abilities comparable to those of any gainful activity in which the individual
has previously engaged with some regularity and over a substantial period of time.

      (f) ``Blindness'' means central visual acuity of 20/200 or less in the better eye with the use
of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such
that the widest diameter of the visual field subtends an angle no greater than 20 degrees
shall be considered for the purpose of this paragraph as having a central visual acuity of
20/200 or less.

      Sec.  12. K.S.A. 1999 Supp. 79-3635 is hereby amended to read as follows: 79-3635.
(a)  (1) A claimant shall be entitled to a refund of retailers' sales taxes paid upon food during
the calendar year 1998 and each year thereafter in the amount hereinafter provided. There
shall be allowed for each member of a household of a claimant having income of $12,500
or less, an amount equal to $60. There shall be allowed for each member of a household of
a claimant having income of more than $12,500 but not more than $25,000, an amount
equal to $30. There shall be allowed for a claimant who qualifies for an additional personal
exemption amount pursuant to K.S.A. 79-32,121, and amendments thereto, an additional
amount of $30 or $60, as the case requires. All such claims shall be paid from the sales tax
refund fund upon warrants of the director of accounts and reports pursuant to vouchers
approved by the director of taxation or by a person or persons designated by the director.

      (2) As an alternative to the procedure described by paragraph 1, for all taxable years
commencing after December 31, 1997, there shall be allowed as a credit against the tax
liability of a resident individual imposed under the Kansas income tax act an amount equal
to $60 or $30, as the case requires, for each member of a household. There shall be allowed
for a claimant who qualifies for an additional personal exemption amount pursuant to K.S.A.
79-32,121, and amendments thereto, an additional amount of $30 or $60, as the case
requires. If the amount of such tax credit exceeds the claimant's income tax liability for such
taxable year, such excess amount shall be refunded to the claimant.

      (b) A head of household shall make application for refunds for all members of the same
household upon a common form provided for the making of joint claims. All claims paid to
members of the same household shall be paid as a joint claim by means of a single warrant.

      (c) No claim for a refund of taxes under the provisions of K.S.A. 79-3632 et seq. shall
be paid or allowed unless such claim is actually filed with and in the possession of the
department of revenue on or before April 15 of the year next succeeding the year in which
such taxes were paid. The director of taxation may: (1) Extend the time for filing any claim
under the provisions of this act when good cause exists therefor; or (2) accept a claim filed
after the deadline for filing in the case of sickness, absence or disability of the claimant if
such claim has been filed within four years of such deadline.

      New Sec.  13. The provisions of sections 13 through 19 and amendments thereto of this
act may be cited as the streamlined sales tax system for the 21st century act.

      New Sec.  14. The legislature finds that:

      (a) State and local tax systems should treat transactions in a competitively neutral
manner;

      (b) a simplified sales and use tax system that treats all transactions in a competitively
neutral manner will strengthen and preserve the sales and use tax as vital state and local
revenue sources and preserve state fiscal sovereignty;

      (c) remote sellers should not receive preferential tax treatment at the expense of local
``main street'' merchants, nor should such vendors be burdened with special, discriminatory
or multiple taxes.

      (d) the state should simplify sales and use taxes to reduce the administrative burden of
collection; and

      (e) while states have the sovereign right to set their own tax policies, states working
together have the opportunity to develop a more simple, uniform, and fair system of state
sales and use taxation without federal government mandates of interference.

      New Sec.  15. The department of revenue shall enter into discussions with states
regarding development of a multi-state, voluntary, streamlined system for sales and use tax
collection and administration. These discussions shall focus on a system that would have the
capability to determine whether the transaction is taxable or tax exempt, the appropriate tax
rate applied to the transaction, and the total tax due on the transaction, and shall provide a
method of collecting and remitting sales and use taxes to the state. Such system may provide
compensation for the costs of collecting and remitting sales and use taxes. Discussions
between the department and other states may include, but are not limited to:

      (a) The development of a ``joint request for information'' from potential public and
private parties governing the specifications for such system;

      (b) the mechanism for compensating parties for the development and operation of such
system;

      (c) establishment of minimum statutory simplification measures necessary for state
participation in such system; and

      (d) measures to preserve confidentiality of taxpayer information and privacy rights of
consumers.

      Following these discussions, the department may proceed to issue a joint request for
information.

      New Sec.  16. The department is authorized to participate in a sales tax pilot project
with other states and selected businesses to test means for simplifying sales and use tax
administration and may enter into joint agreements for that purpose.

      (a) Agreements to participate in the test shall establish provisions for the administration,
imposition and collection of sales and use taxes resulting in revenues paid that are the same
as would be paid under articles 36 and 37 of chapter 79 of the Kansas Statutes Annotated.

      (b) Parties to the agreements are excused from complying with the provisions of articles
36 and 37 of chapter 79 of the Kansas Statutes Annotated to the extent a different procedure
is required by the agreements, except for confidentiality of taxpayer information as detailed
in section 17, and amendments thereto.

      (c) Agreements authorized under this section shall terminate no later than December
31, 2001.

      New Sec.  17. Return information submitted to any party or parties acting for and on
behalf of the state shall be treated as confidential. Disclosure of such information necessary
under sections 15 and 16 shall be pursuant to a written agreement between the department
and the party or parties. Such party or parties shall be bound by the same requirements of
confidentiality as the department, under K.S.A. 79-3614, and amendments thereto.

      New Sec.  18. There is hereby created a legislative oversight committee which shall
consist of the chairpersons and minority party leaders of the standing committees on taxation
of the senate and the house of representatives. The department shall provide testimony and
information as requested by the committee. The department shall provide quarterly reports
to the governor, the speaker of the house, minority leader of the house, president of the
senate and senate minority leader and to the members of the legislative oversight committee
on the progress of multi-state discussions.

      New Sec.  19. By March 1, 2001, the department shall report to the governor and to
the speaker of the house, minority leader of the house, president of the senate and senate
minority leader and to the members of the legislative oversight committee on the status of
multi-state discussions and, if a proposed system has been agreed upon by participating
states, shall also recommend whether the state should participate in such system.

      Sec.  20. K.S.A. 1999 Supp. 12-187, 12-188, 12-189, 12-189c, 12-1694, 12-1698, 12-
2536, 75-5133, 79-3602, 79-3603, 79-3606, as amended by section 1 of 2000 House Bill No.
2011, 79-3633 and 79-3635 are hereby repealed.

      Sec.  21. This act shall take effect and be in force from and after its publication in the
statute book.'';

      In the title, in line 13, by striking ``sales'' and inserting ``excise''; also, in line 13, by striking
all after the semicolon; by striking all in lines 14 and 15 and inserting ``amending K.S.A.
1999 Supp. 12-187, 12-188, 12-189, 12-1694, 12-1698, 12-2536, 75-5133, 79-3602, 79-3603,
79-3606, as amended by section 1 of 2000 House Bill No. 2011, 79-3633 and 79-3635 and
repealing the existing sections; also repealing K.S.A. 1999 Supp. 12-189c.;

                                                                                    \ And your committee on conference recommends the adoption of this report.

                                                                                    Susan Wagle

                                                                                    Clay Aurand

                                                                                    Melvin G. Minor
 Conferees on the part of House
                                                                                   

                                                                                    Audrey Langworthy

                                                                                    Leslie D. Donovan

                                                                                    Janis K. Lee
 Conferees on part of Senate


   Senator Langworthy moved the Senate adopt the Conference Committee Report on SB
59.

 On roll call, the vote was: Yeas 38, Nays 2, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Clark, Corbin, Donovan, Downey, Emert,
Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley, Huelskamp,
Jones, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

 Nays: Brownlee, Jordan.

 The Conference Committee report was adopted.


EXPLANATION OF VOTE
 Mr. President: SB 59 has within it many good bills which should have been sent
separately to the Governor. This Legislature apparently did not have the courage to allow
these various issues to stand on their own merit. I support most of the issues and would like
to cast a yes vote on final action.

 However, the message from home has been so clear to oppose the Bistate tax that I must
vote no.

 Packaging the bistate tax with other tax issues highlights what's wrong in political circles
today. It's time to clean up our act and deal in good faith with the public by acting on issues
separately. When an issue is ``super glued'' to others because it would sink to the bottom of
the ocean on its own, we need to heed the message of the people who sent us here. Instead,
we did the proverbial ``stuffing it down the throats of others.''--Karin Brownlee

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 393, submits the following report:

      The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee of the Whole
amendments, as follows:

      On page 1, in line 38, by striking ``or other audit''; in line 39, by striking ``work'';

      On page 2, in line 3, by striking ``or other audit work'';

      On page 7, following line 32, by inserting:

      ``New Sec.  22. (a) On and after the effective date of this act, all leases for office space
in nonstate-owned buildings and facilities for state officers and employees shall be negotiated
and entered into by the secretary of administration, or the secretary's designee, in
accordance with this section and the policies and procedures adopted thereunder. The
secretary of administration shall plan and coordinate the leasing of office space in nonstate-
owned buildings and facilities for state officers and employees of all state agencies. The
head of each state agency shall provide information to and cooperate with the secretary of
administration for the purposes of implementing and administering this section and the
policies and procedures prescribed by the secretary of administration.

      (b) The secretary of administration shall develop and adopt policies and procedures for
centralizing the function of leasing of office space in nonstate-owned buildings and facilities
for state officers and employees of all state agencies. After June 30, 2000, each existing lease
of office space for state officers and employees in nonstate-owned buildings and facilities
may be renewed or extended only upon approval by the secretary of administration and in
accordance with policies and procedures prescribed by the secretary.

      (c) The secretary of administration may delegate authority to any state agency to
negotiate and enter into leases for office space in nonstate-owned buildings and facilities
for state officers and employees of the state agency, including renewals or extensions of
existing leases, under conditions and procedures prescribed by the secretary in accordance
with this section.

      (d) No lease of office space for state officers and employees in nonstate-owned buildings
or facilities, which is for the lease of more than 10,000 net assignable square feet or for a
term longer than 24 months, shall be entered into or approved by the secretary of
administration unless the secretary of administration has first advised and consulted with
the joint committee on state building construction.

      (e) The secretary of administration is hereby authorized to fix, charge and collect a lease
negotiation service fee to recover the costs incurred by the department in providing lease
negotiation services under this section. Such fee shall be paid in annual installments over
the term of such lease. Such fees shall be deposited in the state treasury and credited to
the state buildings operating fund.

      (f) Nothing in this section shall be construed as requiring the renegotiation of the terms
of any lease in existence on July 1, 2000. At the request of an agency, the secretary may
renegotiate a lease in existence on July 1, 2000.'';

      By renumbering sections accordingly;

      In the title, in line 14, by striking all after ``ACT''; by striking all in line 15; in line 16, by
striking all before the semicolon and inserting ``concerning state agencies, state officers and
state office space'';

                                                                                    \ And your committee on conference recommends the adoption of this report.

                                                                                    Kenny A. Wilk

                                                                                    Deena Horst

                                                                                    Bonnie Sharp
 Conferees on the part of House
                                                                                   

                                                                                    Lana Oleen

                                                                                    Ben Vidricksen

                                                                                    Sherman Jones
 Conferees on part of Senate


   Senator Oleen moved the Senate adopt the Conference Committee Report on SB 393.

 On roll call, the vote was: Yeas 39, Nays 1, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 Nays: Pugh.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to Senate Substitute for HB 2005, submits the following report:

      The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with amendments made by the
Senate Committee of the Whole, as follows:

      On page 1, by striking lines 21 through 43;

      On page 2, by striking lines 1 through 43;

      On page 3, by striking lines 1 through 43;

      On page 4, by striking lines 1 through 43;

      On page 5, by striking lines 1 through 43;

      On page 6, by striking lines 1 through 43;

      On page 7, by striking lines 1 through 43;

      On page 8, by striking lines 1 through 24; by renumbering the remaining sections; also
on page 8, by striking lines 40 through 43;

      On page 9, by striking lines 1 through 43;

      On page 10, by striking lines 1 through 17; also on page 10, after line 17 by inserting:

      ``New Sec.  2. As used in sections 2 through 31 and amendments thereto:

      (a) ``Adjusted RBC report'' means an RBC report which has been adjusted by the
commissioner in accordance with section 5 and amendments thereto.

      (b) ``Corrective order'' means an order issued by the commissioner specifying corrective
actions which the commissioner has determined are required.

      (c) ``Domestic health organization'' means any health organization which is licensed and
organized in this state.

      (d)`` Foreign health organization'' means any health organization not domiciled in this
state which is licensed to do business in this state pursuant to articles 19a, 19c or 32 of
chapter 40 of the Kansas Statutes Annotated, and amendments thereto.

      (e) ``NAIC'' means the national association of insurance commissioners.

      (f) ``Health organization'' means a health maintenance organization, limited health
service organization, dental or vision plan, hospital, medical and dental indemnity or service
corporation or other managed care organization licensed under articles 19a, 19c or 32 of
chapter 40 of the Kansas Statutes Annotated, and amendments thereto. This definition shall
not include an organization that is licensed as either a life and health insurer or a property
and casualty insurer under articles 4, 5, 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the
Kansas Statutes Annotated, and amendments thereto, and that is otherwise subject to either
the life or property and casualty RBC requirements in K.S.A. 1999 Supp. 40-2c01 et seq.,
and amendments thereto.

      (g) ``RBC'' means risk-based capital.

      (h) ``RBC instructions'' means the risk-based capital instructions for managed care
organizations promulgated by the NAIC which are in effect on December 31, 1999, or any
later version as adopted by the commissioner in rules and regulations.

      (i) ``RBC level'' means a health organization's company action level RBC, regulatory
action level RBC, authorized control level RBC, or mandatory control level RBC where:

      (1) ``Company action level RBC'' means, with respect to any health organization, the
product of 2.0 and its authorized control level RBC;

      (2) ``regulatory action level RBC'' means the product of 1.5 and its authorized control
level RBC;

      (3) ``authorized control level RBC'' means the number determined under the risk-based
capital formula in accordance with the RBC instructions; and

      (4) ``mandatory control level RBC'' means the product of .70 and the authorized control
level RBC.

      (j) ``RBC plan'' means a comprehensive financial plan containing the elements specified
in section 6, and amendments thereto. If the commissioner rejects the RBC plan, and it is
revised by the health organization, with or without the commissioner's recommendation,
the plan shall be called the ``revised RBC plan.''

      (k) ``RBC report'' means the report required by sections 3, 4 and 5 and amendments
thereto.

      (l) ``Total adjusted capital'' means the sum of:

      (1) A health organization's capital and surplus as determined in accordance with the
annual financial statements required to be filed under articles 19a, 19c or 32 of chapter 40
of the Kansas Statutes Annotated and amendments thereto; and

      (2) such other items, if any, as the RBC instructions may provide.

      (m) ``Commissioner'' means the commissioner of insurance.

      New Sec.  3. (a) Except as provided in paragraph (b), every domestic health organization
shall prepare and submit to the commissioner, on or before March 1, a report of its RBC
levels as of the end of the calendar year just ended in a form and containing such information
as is required by the RBC instructions. In addition, every domestic health organization shall
file its RBC report:

      (1) With the NAIC in accordance with the RBC instructions; and

      (2) with the insurance commissioner in any state in which the health organization is
authorized to do business, if such insurance commissioner has notified the health
organization of its request in writing, in which case, the health organization shall file its
RBC report not later than the later of:

      (A) 15 days from the receipt of notice to file its RBC report with that state; or

      (B) the filing date otherwise specified in this subsection.

      (b) The risk-based capital requirements of this section shall not apply to any health
organization contracting with the Kansas department of social and rehabilitation services to
provide services provided under title XIX and title XXI of the social security act or any other
public benefits, provided the public benefit contracts represent at least 90% of the premium
volume of the health organization.

      New Sec.  4. (a) A health organization's RBC shall be determined in accordance with
the formula set forth in the RBC instructions. The formula shall take into account and may
adjust for the covariance between:

      (1) Asset risk;

      (2) credit risk;

      (3) underwriting risk; and

      (4) all other business risks and such other relevant risks as are set forth in the RBC
instructions; determined in each case by applying the factors in the manner set forth in the
RBC instructions.

      (b) An excess of capital over the amount produced by the risk-based capital
requirements contained in this act and the formulas, schedules and instructions referenced
in this act is desirable in the business of insurance. Accordingly, each health organization
should seek to maintain capital above the RBC levels required by this act. Additional capital
is used and useful in the insurance business and helps to secure a health organization against
various risks inherent in, or affecting, the business of insurance and not accounted for or
only partially measured by the risk-based capital requirements contained in this act.

      New Sec.  5. If a domestic health organization files an RBC report which in the
judgment of the commissioner is inaccurate, the commissioner shall adjust the RBC report
to correct the inaccuracy and shall notify such health organization of the adjustment. The
notice shall contain a statement of the reason for the adjustment. A RBC report as so
adjusted is referred to as an adjusted RBC report.

      New Sec.  6. ``Company action level event'' means any of the following events:

      (a) The filing of an RBC report by a health organization which indicates that a health
organization's total adjusted capital is greater than or equal to its regulatory action level
RBC but less than its company action level RBC.

      (b) The notification by the commissioner to the health organization of an adjusted RBC
report that indicates the event described in subsection (a) if:

      (1) The health organization does not challenge the adjusted RBC report pursuant to
section 20, and amendments thereto; or

      (2) the commissioner has rejected such challenge after a hearing.

      New Sec.  7. In the event of a company action level event, the health organization shall
prepare and submit to the commissioner an RBC plan which shall:

      (a) Identify the conditions in the health organization's operation which contribute to
the company action level event;

      (b) contain proposals of corrective actions which the health organization intends to take
that would be expected to result in the elimination of the company action level event;

      (c) provide projections of the health organization's financial results in the current year
and at least the two succeeding years, both in the absence of the proposed corrective actions
and giving effect to the proposed corrective actions, including projections of statutory
balance sheets, operating income, net income, capital and surplus, and RBC levels. The
projections for both new and renewal business may include separate projections for each
major line of business and separately identify each significant income, expense and benefit
component;

      (d) identify the key assumptions impacting the health organization's projections and the
sensitivity of the projections to the assumptions; and

      (e) identify the quality of, and problems associated with, the health organization's
business, including, but not limited to, its assets, anticipated business growth and associated
surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance in each
case, if any.

      New Sec.  8. The RBC plan shall be submitted:

      (a) Within 45 days of the company action level event; or

      (b) within 45 days after notification to the health organization that the commissioner
has rejected the health organization's challenge to an adjusted RBC report pursuant to
section 20 and amendments thereto.

      New Sec.  9. Within 60 days after the submission by a health organization of an RBC
plan to the commissioner, the commissioner shall notify the health organization whether
the RBC plan shall be implemented or is, in the judgment of the commissioner,
unsatisfactory. If the commissioner determines the RBC plan is unsatisfactory, the
notification to the health organization shall state the reasons for the determination, and may
state proposed revisions which, in the judgments of the commissioner, will render the RBC
plan satisfactory. Upon notification from the commissioner, the health organization shall
prepare a revised RBC plan and shall submit the revised RBC plan to the commissioner:

      (a) Within 45 days after the notification from the commissioner; or

      (b) within 45 days after a notification to the health organization that the commissioner
has, pursuant to section 20, and amendments thereto, rejected the health organization's
challenge to the commissioner's original findings as authorized by this section.

      New Sec.  10. In the event of a notification by the commissioner to a health organization
that the health organization's RBC plan or revised RBC plan is unsatisfactory, the
commissioner, subject to the health organization's right to a hearing under section 20, and
amendments thereto, may specify in the notification that the notification constitutes a
regulatory action level event.

      New Sec.  11. Every domestic health organization that files an RBC plan or revised
RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan
with the insurance commissioner in any state in which the health organization is authorized
to do business if:

      (a) Such state has an RBC provision substantially similar to section 21, and amendments
thereto; and

      (b) the insurance commissioner of that state has notified the health organization of such
insurance commissioner's request for the filing in writing, in which case the health
organization shall file a copy of the RBC plan or revised RBC plan in that state no later
than the later of:

      (1) 15 days after the receipt of notice to file a copy of its RBC plan or revised RBC plan
with the state; or

      (2) the date on which the final RBC plan or revised RBC plan is filed under section 8
or 9, and amendments thereto.

      New Sec.  12. ``Regulatory action level event'' means, with respect to any health
organization, any of the following events:

      (a) The filing of an RBC report by the health organization which indicates that the
health organization's total adjusted capital is greater than or equal to its authorized control
level RBC but less than its regulatory action level RBC;

      (b) the notification by the commissioner to the health organization of an adjusted RBC
report that indicates the event described in subsection (a) if:

      (1) The health organization does not challenge the adjusted RBC report pursuant to
section 20, and amendments thereto; or

      (2) the commissioner has rejected such challenge after a hearing; and

      (c) the failure of the health organization to file an RBC report by the filing date, unless
the health organization has provided an explanation for such failure which is satisfactory to
the commissioner and has cured the failure within 10 days after the filing date;

      (d) the failure of the health organization to submit an RBC plan to the commissioner
within the time period set forth in section 8, and amendments thereto;

      (e) notification by the commissioner to the health organization that:

      (1) The RBC plan or revised RBC plan submitted by the health organization is, in the
judgment of the commissioner, unsatisfactory; and

      (2) (A) the health organization has not challenged the determination pursuant to section
20, and amendments thereto; or

      (B) the commissioner has rejected such challenge.

      (f) Notification by the commissioner to the health organization that the health
organization has failed to adhere to its RBC plan or revised RBC plan, but only if such
failure has a substantial adverse effect on the ability of the health organization to eliminate
the company action level event in accordance with its RBC plan or revised RBC plan and
the commissioner has so stated in the notification, if:

      (1) The health organization has not challenged such determination pursuant to section
20, and amendments thereto; or

      (2) the commissioner has rejected such challenge after a hearing.

      New Sec.  13. In the event of a regulatory action level event, the commissioner shall:

      (a) Require the health organization to prepare and submit an RBC plan or, if applicable,
a revised RBC plan;

      (b) perform such examination or analysis as the commissioner deems necessary of the
assets, liabilities and operations of the health organization including a review of its RBC
plan or revised RBC plan; and

      (c) subsequent to the examination or analysis, issue a corrective order specifying such
actions as the commissioner determines are required.

      New Sec.  14. In determining corrective actions, the commissioner may take into
account such factors as are deemed relevant with respect to the health organization based
upon the commissioner's examination or analysis of the assets, liabilities and operations of
the health organization, including, but not limited to, the results of any sensitivity tests
undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be
submitted:

      (a) Within 45 days after the occurrence of the regulatory action level event;

      (b) within 45 days after the notification to the health organization that the commissioner
has rejected the health organization's challenge to an adjusted RBC report pursuant to
section 20, and amendments thereto; or

      (c) within 45 days after notification to the health organization that the commissioner
has rejected the health organization's challenge to a revised RBC plan pursuant to section
20, and amendments thereto.

      New Sec.  15. The commissioner may retain actuaries and investment experts and other
consultants as may be necessary in the judgment of the commissioner to review the health
organization's RBC plan or revised RBC plan, examine or analyze the assets, liabilities and
operations of the health organization and formulate the corrective order with respect to the
health organization. The reasonable fees, costs and expenses relating to consultants shall be
borne by the affected health organization or other party as directed by the commissioner.

      New Sec.  16. ``Authorized control level event'' means any of the following events:

      (a) The filing of an RBC report by the health organization which indicates that the
health organization's total adjusted capital is greater than or equal to its mandatory control
level RBC but less than its authorized control level RBC;

      (b) the notification by the commissioner to the health organization of an adjusted RBC
report that indicates the event described in subsection (a) if:

      (1) The health organization does not challenge the adjusted RBC report pursuant to
section 20, and amendments thereto; or

      (2) the commissioner has rejected such challenge after a hearing;

      (c) the failure of the health organization to respond, in a manner satisfactory to the
commissioner, to a corrective order if the health organization has not challenged the
corrective order under section 20, and amendments thereto; or

      (d) if the commissioner has rejected the challenge to the corrective order or modified
the corrective order pursuant to section 20, and amendments thereto, the failure of the
health organization to respond, in a manner satisfactory to the commissioner, to the
corrective order subsequent to rejection or modification by the commissioner.

      New Sec.  17. In the event of an authorized control level event with respect to a health
organization, the commissioner:

      (a) Shall take such actions as are required under sections 12 through 15, and
amendments thereto, regarding a health organization with respect to which a regulatory
action level event has occurred; or

      (b) if the commissioner deems it to be in the best interests of the policyholders and
creditors of the health organization and of the public, shall take such actions as are necessary
to cause the health organization to be placed under regulatory control pursuant to K.S.A.
40-3605 et seq., and amendments thereto. In the event the commissioner takes such actions,
the authorized control level event shall be deemed sufficient grounds for the commissioner
to take action under K.S.A. 40-3605 et seq., and amendments thereto, and the commissioner
shall have the rights, powers and duties with respect to the health organization as are set
forth in K.S.A. 40-3605 et seq., and amendments thereto. In the event the commissioner
takes actions under this subsection pursuant to an adjusted RBC report, the health
organization shall be entitled to such protections as are afforded to health organizations
under the provisions of K.S.A. 77-501 et seq., and amendments thereto, pertaining to
summar proceedings.

      New Sec.  18. ``Mandatory control event'' means any of the following events:

      (a) The filing of an RBC report by the health organization which indicates that the
health organization's total adjusted capital is less than its mandatory control level RBC;

      (b) the notification by the commissioner to the health organization of an adjusted RBC
report that indicates the event described in subsection (a) if:

      (1) The health organization does not challenge the adjusted RBC report pursuant to
section 20 and amendments thereto; or

      (2) the commissioner has rejected such challenge.

      New Sec.  19. In the event of a mandatory control level event the commissioner shall
take actions as are necessary to cause the health organization to be placed under regulatory
control under K.S.A. 40-3605 et seq., and amendments thereto. In that event, the mandatory
control level event shall be deemed sufficient grounds for the commissioner to take action
under K.S.A. 40-3605 et seq., and amendments thereto, and the commissioner shall have
the rights, powers and duties with respect to the health organization as are set forth in K.S.A.
40-3605 et seq., and amendments thereto. In the event the commissioner takes actions
pursuant to an adjusted RBC report, the health organization shall be entitled to such
protections as are afforded to health organizations under the provisions of K.S.A. 77-501 et
seq. and amendments thereto, pertaining to summary proceedings. Notwithstanding any of
the foregoing, the commissioner may forego action for up to 90 days after the mandatory
control level event if there is a reasonable expectation that the mandatory control level event
may be eliminated within the 90-day period.

      New Sec.  20. (a) Upon notification to a health organization by the commissioner of an
adjusted RBC report; or

      (b) upon notification to an health organization by the commissioner that:

      (1) The health organization's RBC plan or revised RBC plan is unsatisfactory; and

      (2) such notification constitutes a regulatory action level event with respect to such
health organization; or

      (c) upon notification to any health organization by the commissioner that the health
organization has failed to adhere to its RBC plan or revised RBC plan and that such failure
has a substantial adverse effect on the ability of the health organization to eliminate the
company action level event with respect to the health organization in accordance with its
RBC plan or revised RBC plan; or

      (d) upon notification to an health organization by the commissioner of a corrective order
with respect to the health organization, the health organization shall have the right to a
hearing under the Kansas administrative procedure act, at which the health organization
may challenge any determination or action by the commissioner. The health organization
shall notify the commissioner of its request for a hearing within five days after the notification
by the commissioner under subsections (a), (b), (c) or (d). Upon receipt of the health
organization's request for a hearing, the commissioner shall set a date for the hearing, which
date shall be no less than 10 nor more than 30 days after receipt of the health organization's
request. Such hearing shall be governed by K.S.A. 77-513 through 77-532 and amendments
thereto.

      New Sec.  21. (a) All RBC reports, RBC plans and any corrective orders, including the
working papers and the results of any analysis of a health organization performed under this
act shall be kept confidential by the commissioner. This information shall not be made public
or subject to subpoena, other than by the commissioner and then only for the purpose of
enforcement actions taken by the commissioner pursuant to this act or any other provision
of the insurance laws of this state.

      (b) RBC instructions, RBC reports, adjusted RBC reports, RBC plans and revised RBC
plans are intended solely for use by the commissioner in monitoring the solvency of health
organizations and the need for possible corrective action with respect to health organizations
and shall not be used by the commissioner for ratemaking nor considered or introduced as
evidence in any rate proceeding nor used by the commissioner to calculate or derive any
elements of an appropriate premium level or rate of return for any line of insurance which
an health organization or any affiliate is authorized to write.

      (c)  (1) The commissioner may share or exchange any documents, materials or other
information, including confidential and privileged documents referred to in subsection (a),
received in the performance of the commissioner's duties under this act, with:

      (A) The NAIC;

      (B) other state, federal or international regulatory agencies; and

      (C) other state, federal or international law enforcement authorities.

      (2)  (A) The sharing or exchanging of documents, materials or other information under
this subsection shall be conditioned upon the recipient's authority and agreement to
maintain the confidential and privileged status, if any, of the documents, materials or other
information being shared or exchanged.

      (B) No waiver of an existing privilege or claim of confidentiality in the documents,
materials or information shall occur as a result of disclosure to the commissioner under this
section or as a result of sharing as authorized by paragraph (1) of subsection (c).

      (3) The commissioner of insurance is hereby authorized to adopt such rules and
regulations establishing protocols governing the exchange of information as may be
necessary to implement and carry out the provisions of this act.

      New Sec.  22. The comparison of a health organization's total adjusted capital to any of
its RBC levels is a regulatory tool, and shall not be used to rank health organizations
generally. Therefore, except as otherwise required under the provisions of this act, the
making, publishing, disseminating, circulating or placing before the public, or causing,
directly or indirectly to be made, published, disseminated, circulated or placed before the
public, in a newspaper, magazine or other publication, or in the form of a notice, circular,
pamphlet, letter or poster, or over any radio or television station, or in any other way, an
advertisement, announcement or statement containing an assertion, representation or
statement with regard to the RBC levels of any health organization, or of any component
derived in the calculation, by any health organization, agent, broker or other person engaged
in any manner in the insurance business is prohibited. Notwithstanding the foregoing, if any
materially false statement with respect to the comparison regarding a health organization's
total adjusted capital to any of its RBC levels or an inappropriate comparison of any other
amount to the health organization's RBC levels is published in any written publication and
the health organization is able to demonstrate to the commissioner with substantial proof
the falsity or misrepresentative nature of such statement, the health organization may
publish a rebuttal if the sole purpose of such publication is to rebut the materially false or
improper statement.

      New Sec.  23. The provisions of this act are supplemental to any other provisions of the
laws of this state, and shall not preclude nor limit any other powers or duties of the
commissioner under such laws, including but not limited to K.S.A. 40-3605 et seq. and
amendments thereto.

      New Sec.  24. Any foreign health organization, upon the written request of the
commissioner, shall submit to the commissioner an RBC report as of the end of the calendar
year just ended the later of:

      (a) The date an RBC report would be required to be filed by a domestic health
organization under this act; or

      (b) Fifteen days after the request is received by the foreign health organization.

      Any foreign health organization, at the written request of the commissioner, shall submit
promptly to the commissioner a copy of any RBC plan that is filed with the insurance
commissioner of any other state.

      New Sec.  25. In the event of a company action level event, regulatory action level event
or authorized control level event with respect to any foreign health organization as
determined under the RBC statute applicable in the state of domicile of the health
organization or, if no RBC provision is in force in that state, under the provisions of this
act, if the insurance commissioner of the state of domicile of the foreign health organization
fails to require the foreign health organization to file an RBC plan in the manner specified
under the RBC statute or, if there are no RBC provisions in force in the state, under section
6, 7, 8, 9, 10 and 11, and amendments thereto, the commissioner may require the foreign
health organization to file an RBC plan with the commissioner. In such event, the failure
of the foreign health organization to file an RBC plan with the commissioner shall be grounds
to order the health organization to cease and desist from writing new insurance business in
this state.

      New Sec.  26. In the event of a mandatory control level event with respect to any foreign
health organization, if no domiciliary receiver has been appointed with respect to the foreign
health organization under the rehabilitation and liquidation statute applicable in the state
of domicile of the foreign health organization, the commissioner may make application to
the district court as permitted under K.S.A. 40-3605 et seq. and amendments thereto with
respect to the liquidation of property of foreign health organizations found in this state, and
the occurrence of the mandatory control level event shall be considered adequate grounds
for the application.

      New Sec.  27. All notices by the commissioner to a health organization which may result
in regulatory action under this act shall be effective upon dispatch if transmitted by
registered or certified mail, or in the case of any other transmission shall be effective upon
the health organization's receipt of such notice.

      New Sec.  28. If any provision of this act, or the application of the act to any person or
circumstance, is held invalid, such determination shall not affect the provisions or
applications of this act which can be given effect without the invalid provision or application,
and to that end the provisions of this act are severable.

      New Sec.  29. (a) Any regulatory action based upon any RBC report required to be filed
by a health organization for such health organization's operations during calendar years 2000
and 2001 shall be subject to the following:

      (1) In the event of a company action level event with respect to any health organization,
the commissioner shall take no regulatory action under this act with respect to such health
organization.

      (2) In the event of a regulatory action level event with respect to any health organization
under either subsection (a) or (b) of section 12, and amendments thereto, the commissioner
shall take such action with respect to such health organization under sections 6 through 11,
inclusive, and amendments thereto, as the commissioner deems necessary.

      (3) In the event of a regulatory action level event with respect to any health organization
under any of subsections (c), (d), (e) or (f) of section 12, and amendments thereto, or an
authorized control level event, the commissioner shall take such action with respect to such
health organization under sections 12 through 15, inclusive, and amendments thereto, as
the commissioner deems necessary.

      (4) In the event of a mandatory control level event with respect to any health
organization, the commissioner shall take action with respect to such health organization as
required under sections 16 and 17, and amendments thereto.

      (b) The provisions of subsection (a) shall not limit the right of the commissioner to
proceed as authorized by any other provision of chapter 40 of the Kansas Statutes Annotated,
and amendments thereto or any rule and regulation adopted thereunder.

      New Sec.  30. The commissioner may adopt reasonable rules and regulations necessary
for the implementation of this act.

      New Sec.  31. Sections 2 through 31, inclusive, and amendments thereto, shall
constitute and may be cited as the health organization risk based capital act.

      New Sec.  32. (a) If uncovered expenditures exceed 10% of total health care
expenditures for two consecutive months, a health maintenance organization shall place an
uncovered expenditure insolvency deposit with the commissioner, with an organization or
trustee acceptable to the commissioner through which a custodial or controlled account is
maintained, cash or securities that are acceptable to the commissioner. The deposit at all
times shall have a fair market value in an amount 120% of the health maintenance
organization's outstanding liability for uncovered expenditures for enrollees in this state,
including incurred but not reported claims, and shall be calculated as of the first day of the
month and maintained for the remainder of the month. If a health maintenance organization
is not otherwise required to file a quarterly report, such health maintenance organization
shall file a report within 45 days of the end of the calendar quarter with information sufficient
to demonstrate compliance with this section.

      (b) The deposit required under this section shall be in addition to the deposit required
under K.S.A. 40-3227, and amendments thereto, and shall be deemed to be an admitted
asset of the health maintenance organization in the determination of such health
maintenance organization's net worth. All income from deposits or trust accounts shall be
deemed to be assets of the health maintenance organization and may be withdrawn from
the deposit or account quarterly with the approval of the commissioner.

      (c) A health maintenance organization that has made a deposit may withdraw that
deposit or any part of the deposit if: (1) A substitute deposit of cash or securities of equal
amount and value is made; (2) the fair market value of such substitute deposit exceeds the
amount of the required deposit; or (3) the deposit required under subsection (a) is reduced
or eliminated. Deposits, substitutions or withdrawals may be made only with the prior
written approval of the commissioner.

      (d) The deposit required under this section shall be held in trust and may be used only
as provided under this section. The commissioner may use all or any portion of the deposit
of an insolvent health maintenance organization for administrative costs associated with
administering such deposit and the payment of any claim of an enrollee of this state for
uncovered expenditures in this state. Each claim for uncovered expenditures shall be paid
on a pro rata basis based on assets available to pay the ultimate liability for incurred
expenditures. A partial distribution may be made pending final distribution. Any amount of
such deposit remaining shall be paid into the liquidation or receivership of the health
maintenance organization.

      (e) The commissioner by regulation may prescribe the time, manner and form for filing
claims under subsection (d).

      (f) The commissioner by regulation or order may require health maintenance
organizations to file annual, quarterly or more frequent reports deemed necessary to
demonstrate compliance with this section. The commissioner may require that the reports
include liability for uncovered expenditures as well as an audit opinion.

      (g) The deposit required under this section may be satisfied through other arrangement
acceptable to the commissioner including parental guarantees and letters of credit.

      (h) The commissioner may adopt rules and regulations to implement this section.

      New Sec.  33. (a) In the event of an insolvency of a health maintenance organization,
the commissioner may order that all other carriers that participated in the enrollment
process with the insolvent health maintenance organization at a group's last regular
enrollment period shall offer the group's enrollees of the insolvent health maintenance
organization a 30-day enrollment period commencing upon the date of insolvency. Under
such order each carrier shall offer to each enrollee of the insolvent health maintenance
organization the same coverages that such insolvent health maintenance organization had
offered to each enrollee of the group at such group's last regular enrollment period at rates
determined in accordance with the successor health maintenance organization's existing
rating methodology.

      (b) Any individual or enrollee who has health insurance coverage involuntarily
terminated because of the insolvency of such individual's or enrollee's health maintenance
organization shall be treated as the equivalent of a federally defined eligible individual for
the purposes of the Kansas uninsurable health insurance plan act, K.S.A. 40-2117 et seq.
and amendments thereto.

      New Sec.  34. (a) A rehabilitation liquidation or conservation of a health maintenance
organization shall be deemed to be the rehabilitation, liquidation or conservation of an
insurance company and shall be conducted under the supervision of the commissioner
pursuant to the law governing the rehabilitation, liquidation or conservation of insurance
companies. The commissioner may apply for an order directing the commissioner to
rehabilitate, liquidate or conserve a health maintenance organization upon any one or more
grounds set out in the insurers supervision, rehabilitation and liquidation act, K.S.A. 40-
3605 et seq., and amendments thereto, or when in the commissioner's discretion the
continued operation of such health maintenance organization would be hazardous either to
the enrollees of such health maintenance organization or to the people of this state. Each
enrollee of such health maintenance organization shall have the same priority in the event
of liquidation or rehabilitation as the law provides to policy holders of an health organization.

      (b) For purpose of determining the priority of distribution of general assets, any claim
of any enrollee or enrollees' beneficiary shall have the same priority as established by K.S.A.
40-3641, and amendments thereto, for policyholders and beneficiaries of insureds of
insurance companies. If an enrollee is liable to a nonparticipating provider for services
provided pursuant to and covered by the health maintenance organization, such liability
shall have the status of such enrollee's claim for distribution of general assets. A provider
who is obligated by statute or agreement to hold any enrollee harmless from liability for
services provided pursuant to and covered by a health maintenance organization shall have
a priority of distribution of the general assets immediately following that of enrollees and
enrollees' beneficiaries as described herein, and immediately preceding the priority of
distribution described in subsection (d) of K.S.A. 40-3641 and amendments thereto.

      New Sec.  35. (a) Whenever the commissioner determines that the financial condition
of a health maintenance organization is such that its continued operation might be hazardous
to its enrollees, creditors or the general public, or that such health maintenance organization
has violated any provisions of this act, the commissioner, after notice and hearing, may order
such health maintenance organization to take action reasonably necessary to rectify the
condition or violation. Such action may include, but not limited to one or more of the
following:

      (1) Reduce the total amount of present and potential liability for benefits by reinsurance
or other method acceptable to the commissioner;

      (2) reduce the volume of any new business being accepted;

      (3) reduce expenses by specified methods acceptable to the commissioner;

      (4) suspend or limit the writing of any new business for a period of time;

      (5) increase the health maintenance organization's capital and surplus by contribution;
or

      (6) take such other steps the commissioner may deem appropriate under the
circumstances.

      (b) The commissioner may adopt rules and regulations which set uniform standards and
criteria for early warning that the continued operation of any health maintenance
organization might be hazardous to its enrollees, creditors or the general public and set
standards for evaluating the financial condition of any health maintenance organization.

      New Sec.  36. Sections 32 through 35, and amendments thereto, shall be part of and
supplemental to the health maintenance organization act cited at K.S.A. 40-3201 et seq.,
and amendments thereto.

      Sec.  37. K.S.A. 1999 Supp. 40-3202 is hereby amended to read as follows: 40-3202. As
used in this act:

      (a) ``Commissioner'' means the commissioner of insurance of the state of Kansas.

      (b) ``Basic health care services'' means but is not limited to usual physician,
hospitalization, laboratory, x-ray, emergency and preventive services and out-of-area
coverage.

      (c) ``Capitated basis'' means a fixed per member per month payment or percentage of
premium payment wherein the provider assumes risk for the cost of contracted services
without regard to the type, value or frequency of services provided. For purposes of this
definition, capitated basis includes the cost associated with operating staff model facilities.

      (d) ``Carrier'' means a health maintenance organization, an insurer, a nonprofit hospital
and medical service corporation, or other entity responsible for the payment of benefits or
provision of services under a group contract.

      (d) (e) ``Certificate of coverage'' means a statement of the essential features and services
of the health maintenance organization coverage which is given to the subscriber by the
health maintenance organization, medicare provider organization or by the group contract
holder.

      (e) (f) ``Copayment'' means an amount an enrollee must pay in order to receive a specific
service which is not fully prepaid.

      (f) (g) ``Deductible'' means an amount an enrollee is responsible to pay out-of-pocket
before the health maintenance organization begins to pay the costs associated with
treatment.

      (g) (h) ``Director'' means the secretary of health and environment.

      (h) (i) ``Disability'' means an injury or illness that results in a substantial physical or
mental limitation in one or more major life activities such as working or independent
activities of daily living that a person was able to do prior to the injury or illness.

      (i) (j) ``Enrollee'' means a person who has entered into a contractual arrangement or on
whose behalf a contractual arrangement has been entered into with a health maintenance
organization or the medicare provider organization for health care services.

      (j) (k) ``Grievance'' means a written complaint submitted in accordance with the formal
grievance procedure by or on behalf of the enrollee regarding any aspect of the health
maintenance organization or the medicare provider organization relative to the enrollee.

      (k) (l) ``Group contract'' means a contract for health care services which by its terms
limits eligibility to members of a specified group. The group contract may include coverage
for dependents.

      (l) (m) ``Group contract holder'' means the person to which a group contract has been
issued.

      (m) (n) ``Health care services'' means basic health care services and other services,
medical equipment and supplies which may include, but are not limited to, medical, surgical
and dental care; psychological, obstetrical, osteopathic, optometric, optic, podiatric, nursing,
occupational therapy services, physical therapy services, chiropractic services and
pharmaceutical services; health education, preventive medical, rehabilitative and home
health services; inpatient and outpatient hospital services, extended care, nursing home care,
convalescent institutional care, laboratory and ambulance services, appliances, drugs,
medicines and supplies; and any other care, service or treatment for the prevention, control
or elimination of disease, the correction of defects or the maintenance of the physical or
mental well-being of human beings.

      (n)''Health Carrier'' means a person that undertakes to provide or arrange for the delivery
of basic health care services to enrollees on a prepaid basis, except for enrollee responsibility
for copayments or deductibles or both. Insurers subject ot K.S.A. 40-3001 et seq., and
amendments thereto, and dental service corporations as defined in K.S.A. 40-19a01 et seq.,
and amendments thereto, shall not be considered health carriers for the purposes of this
act.

      (o) ``Health maintenance organization'' means an organization which:

      (1) Provides or otherwise makes available to enrollees health care services, including at
a minimum those basic health care services which are determined by the commissioner to
be generally available on an insured or prepaid basis in the geographic area served;

      (2) is compensated, except for reasonable copayments, for the provision of basic health
care services to enrollees solely on a predetermined periodic rate basis;

      (3) provides physician services directly through physicians who are either employees or
partners of such organization or under arrangements with a physician or any group of
physicians or under arrangements as an independent contractor with a physician or any
group of physicians;

      (4) is responsible for the availability, accessibility and quality of the health care services
provided or made available.

      (o) (p) ``Individual contract'' means a contract for health care services issued to and
covering an individual. The individual contract may include dependents of the subscriber.

      (p) (q) ``Individual practice association'' means a partnership, corporation, association
or other legal entity which delivers or arranges for the delivery of basic health care services
and which has entered into a services arrangement with persons who are licensed to practice
medicine and surgery, dentistry, chiropractic, pharmacy, podiatry, optometry or any other
health profession and a majority of whom are licensed to practice medicine and surgery.
Such an arrangement shall provide:

      (1) That such persons shall provide their professional services in accordance with a
compensation arrangement established by the entity; and

      (2) to the extent feasible for the sharing by such persons of medical and other records,
equipment, and professional, technical and administrative staff.

      (q) (r) ``Medical group'' or ``staff model'' means a partnership, association or other
group:

      (1) Which is composed of health professionals licensed to practice medicine and surgery
and of such other licensed health professionals, including but not limited to dentists,
chiropractors, pharmacists, optometrists and podiatrists as are necessary for the provision
of health services for which the group is responsible;

      (2) a majority of the members of which are licensed to practice medicine and surgery;
and

      (3) the members of which: (A) As their principal professional activity over 50%
individually and as a group responsibility are engaged in the coordinated practice of their
profession for a health maintenance organization; (B) pool their income and distribute it
among themselves according to a prearranged salary or drawing account or other plan, or
are salaried employees of the health maintenance organization; (C) share medical and other
records and substantial portions of major equipment and of professional, technical and
administrative staff; and (D) establish an arrangement whereby the enrollee's enrollment
status is not known to the member of the group who provides health services to the enrollee.

      (r) (s) ``Medicare provider organization'' means an organization which:

      (1) Is a provider-sponsored organization as defined by Section 4001 of the Balanced
Budget Act of 1997 (PL 105-33); and

      (2) provides or otherwise makes available to enrollees basic health care services pursuant
to Section 4001 of the Balanced Budget Act of 1997 (PL 105-33).

      (s) (t) ``Net worth'' means the excess of assets over liabilities as determined by the
commissioner from the latest annual report filed pursuant to K.S.A. 40-3220 and
amendments thereto.

      (t) (u) ``Person'' means any natural or artificial person including but not limited to
individuals, partnerships, associations, trusts or corporations.

      (u) (v) ``Physician'' means a person licensed to practice medicine and surgery under the
healing arts act.

      (v) (w) ``Provider'' means any physician, hospital or other person which is licensed or
otherwise authorized in this state to furnish health care services.

      (w) (x) ``Uncovered expenditures'' means the costs of health care services that are
covered by a health maintenance organization for which an enrollee would also be liable in
the event of the organization's insolvency as determined by the commissioner from the latest
annual statement filed pursuant to K.S.A. 40-3220 and amendments thereto and which are
not guaranteed, insured or assumed by any person or organization other than the carrier.

      Sec.  38. K.S.A. 1999 Supp. 40-3209 is hereby amended to read as follows: 40-3209. (a)
All forms of group and individual certificates of coverage and contracts issued by the
organization to enrollees or other marketing documents purporting to describe the
organization's health care services shall contain as a minimum:

      (1) A complete description of the health care services and other benefits to which the
enrollee is entitled;

      (2) The locations of all facilities, the hours of operation and the services which are
provided in each facility in the case of individual practice associations or medical staff and
group practices, and, in all other cases, a list of providers by specialty with a list of addresses
and telephone numbers;

      (3) the financial responsibilities of the enrollee and the amount of any deductible,
copayment or coinsurance required;

      (4) all exclusions and limitations on services or any other benefits to be provided
including any deductible or copayment feature and all restrictions relating to pre-existing
conditions;

      (5) all criteria by which an enrollee may be disenrolled or denied re-enrollment;

      (6) service priorities in case of epidemic, or other emergency conditions affecting
demand for medical services;

      (7) in the case of a health maintenance organization, a provision that an enrollee or a
covered dependent of an enrollee whose coverage under a health maintenance organization
group contract has been terminated for any reason but who remains in the service area and
who has been continuously covered by the health maintenance organization for at least three
months shall be entitled to obtain a converted contract or have such coverage continued
under the group contract for a period of six months following which such enrollee or
dependent shall be entitled to obtain a converted contract in accordance with the provisions
of this section. The converted contract shall provide coverage at least equal to the conversion
coverage options generally available from insurers or mutual nonprofit hospital and medical
service corporations in the service area at the applicable premium cost. The group enrollee
or enrollees shall be solely responsible for paying the premiums for the alternative coverage.
The frequency of premium payment shall be the frequency customarily required by the
health maintenance organization, mutual nonprofit hospital and medical service corporation
or insurer for the policy form and plan selected, except that the insurer, mutual nonprofit
hospital and medical service corporation or health maintenance organization shall require
premium payments at least quarterly. The coverage shall be available to all enrollees of any
group without medical underwriting. The requirement imposed by this subsection shall not
apply to a contract which provides benefits for specific diseases or for accidental injuries
only, nor shall it apply to any employee or member or such employee's or member's covered
dependents when:

      (A) Such person was terminated for cause as permitted by the group contract approved
by the commissioner;

      (B) any discontinued group coverage was replaced by similar group coverage within 31
days; or

      (C) the employee or member is or could be covered by any other insured or noninsured
arrangement which provides expense incurred hospital, surgical or medical coverage and
benefits for individuals in a group under which the person was not covered prior to such
termination. Written application for the converted contract shall be made and the first
premium paid not later than 31 days after termination of the group coverage or receipt of
notice of conversion rights from the health maintenance organization, whichever is later,
and shall become effective the day following the termination of coverage under the group
contract. The health maintenance organization shall give the employee or member and such
employee's or member's covered dependents reasonable notice of the right to convert at
least once within 30 days of termination of coverage under the group contract. The group
contract and certificates may include provisions necessary to identify or obtain identification
of persons and notification of events that would activate the notice requirements and
conversion rights created by this section but such requirements and rights shall not be
invalidated by failure of persons other than the employee or member entitled to conversion
to comply with any such provisions. In addition, the converted contract shall be subject to
the provisions contained in paragraphs (2), (4), (5), (6), (7), (8), (9), (13), (14), (15), (16),
(17) and (19) of subsection (j) of K.S.A. 40-2209, and amendments thereto;

      (8)  (A) group contracts shall contain a provision extending payment of such benefits
until discharged or for a period not less than 31 days following the expiration date of the
contract, whichever is earlier, for covered enrollees and dependents confined in a hospital
on the date of termination;

      (B) a provision that coverage under any subsequent replacement contract that is
intended to afford continuous coverage will commence immediately following expiration of
any prior contract with respect to covered services not provided pursuant to subparagraph
(8)(A); and

      (9) an individual contract shall provide for a 10-day period for the enrollee to examine
and return the contract and have the premium refunded, but if services were received by
the enrollee during the 10-day period, and the enrollee returns the contract to receive a
refund of the premium paid, the enrollee must pay for such services.

      (b) No health maintenance organization or medicare provider organization authorized
under this act shall contract with any provider under provisions which require enrollees to
guarantee payment, other than copayments and deductibles, to such provider in the event
of nonpayment by the health maintenance organization or medicare provider organization
for any services which have been performed under contracts between such enrollees and
the health maintenance organization or medicare provider organization. Further, any
contract between a health maintenance organization or medicare provider organization and
a provider shall provide that if the health maintenance organization or medicare provider
organization fails to pay for covered health care services as set forth in the contract between
the health maintenance organization or medicare provider organization and its enrollee, the
enrollee or covered dependents shall not be liable to any provider for any amounts owed
by the health maintenance organization or medicare provider organization. If there is no
written contract between the health maintenance organization or medicare provider
organization and the provider or if the written contract fails to include the above provision,
the enrollee and dependents are not liable to any provider for any amounts owed by the
health maintenance organization or medicare provider organization. Any action by a
provider to collect or attempt to collect from a subscriber or enrollee any sum owed by the
health maintenance organization to a provider shall be deemed to be an unconscionable act
within the meaning of K.S.A. 50-627 and amendments thereto.

      (c) No group or individual certificate of coverage or contract form or amendment to an
approved certificate of coverage or contract form shall be issued unless it is filed with the
commissioner. Such contract form or amendment shall become effective within 30 days of
such filing unless the commissioner finds that such contract form or amendment does not
comply with the requirements of this section.

      (d) Every contract shall include a clear and understandable description of the health
maintenance organization's or medicare provider organization's method for resolving
enrollee grievances.

      (e) The provisions of subsections (A), (B), (C), (D) and (E) of K.S.A. 40-2209 and 40-
2215 and amendments thereto shall apply to all contracts issued under this section, and the
provisions of such sections shall apply to health maintenance organizations.

      (f)  In lieu of any of the requirements of subsection (a), the commissioner may accept
certificates of coverage issued by a medicare provider organization in conformity with
requirements imposed by any appropriate federal regulatory agency.

      Sec.  39. K.S.A. 1999 Supp. 40-3220 is hereby amended to read as follows: 40-3220.
Every health maintenance organization and medicare provider organization authorized
under this act shall annually on or before the first day of March, file a verified report with
the commissioner, showing its condition on the last day of the preceding calendar year, on
forms prescribed by the commissioner. Such report shall include:

      (a) A financial statement of the organization, including its balance sheet and receipts
and disbursements for the preceding year; and

      (b) such other information relating to the performance of health maintenance
organizations as shall be required by the commissioner. Every health maintenance
organization and medicare provider organization authorized under this act shall be subject
to the provisions of K.S.A. 40-225 and amendments thereto.

      Sec.  40. K.S.A. 1999 Supp. 40-3227 is hereby amended to read as follows: 40-3227. (a)
Except as provided in paragraph (e), before issuing any certificate of authority, the
commissioner shall require that the health maintenance organization have an initial net
worth of $1,500,000 and shall thereafter maintain the minimum net worth required under
subsection (b).
      (b) Except as provided in subsections (c) and (d) of this section, every health
maintenance organization shall maintain a minimum net worth equal to the greater of:
      (1) $1,000,000; or
      (2) two percent of annual premium revenues as reported on the most recent annual
financial statement filed with the commissioner on the first $150,000,000 of premium and
1% of annual premium on the premium in excess of $150,000,000; or
      (3) an amount equal to the sum of three months uncovered health care expenditures as
reported on the most recent financial statement filed with the commissioner; or
      (4) an amount equal to the sum of:
      (A) Eight percent of annual health care expenditures except those paid on a capitated
basis or managed hospital payment basis as reported on the most recent financial statement
filed with the commissioner; and
      (B) four percent of annual hospital expenditures paid on a managed hospital payment
basis as reported on the most recent financial statement filed with the commissioner.
      (c) A health maintenance organization licensed on or before the day preceding the
effective date of this section must maintain a minimum net worth of:
      (1) Twenty-five percent of the amount required by subsection (b) by December 31, 2000;
      (2) 50% of the amount required by subsection (b) by December 31, 2001;
      (3) 75% of the amount required by subsection (b) by December 31, 2002; and
      (4) 100% of the amount required by subsection (b) by December 31, 2003.
      (d) In determining net worth, no debt shall be considered fully subordinated unless the
subordination clause is in a form acceptable to the commissioner. An interest obligation
relating to the repayment of any subordinated debt shall be similarly subordinated. The
interest expenses relating to the repayment of a fully subordinated debt shall be considered
covered expenses. A debt incurred by a note meeting the requirements of this section, and
otherwise acceptable to the commissioner, shall not be considered a liability and shall be
recorded as equity.
      (e) The net worth requirements of subsections (a) through (d) shall not apply to any
health organization contracting with the Kansas department of social and rehabilitation
services to provide services provided under title XIX and title XXI of the social security act
or any other public benefits, provided the public benefit contracts represent at least 90% of
the premium volume of the health organization.

      (f) Unless otherwise provided below, each health maintenance organization doing
business in this state shall deposit with any organization or trustee acceptable to the
commissioner through which a custodial or controlled account is utilized, cash, securities or
any combination of these or other measures, for the benefit of all of the enrollees of the
health maintenance organization, that are acceptable in the amount of $150,000 for a
medical group or staff model health maintenance organization or $300,000 for an individual
practice association.

      (b) (g) The commissioner may waive any of the deposit requirements set forth in
subsection (a) (f) whenever satisfied that: (1) The organization has sufficient net worth and
an adequate history of generating net income to assure its financial viability for the next
year; or (2) the organization's performance and obligations are guaranteed by an organization
with sufficient net worth and an adequate history of generating net income; or (3) the assets
of the organization or its contracts with insurers, hospital or medical service corporations,
governments or other organizations are reasonably sufficient to assure the performance of
its obligations.

      (c) When an organization has achieved a net worth not including land, buildings and
equipment of at least $1,000,000 or has achieved a net worth including land, buildings and
equipment of at least $5,000,000, the annual deposit requirement shall not apply.
      (d) If the organization has a guaranteeing organization which has been in operation for
at least five years and has a net worth not including land, buildings and equipment of at
least $1,000,000 or which has been in operation for at least 10 years and has a net worth
including land, buildings and equipment of at least $5,000,000, the annual deposit
requirement shall not apply. If the guaranteeing organization is sponsoring more than one
organization, the net worth requirement shall be increased by a multiple equal to the number
of such organizations. This requirement to maintain a deposit in excess of the deposit
required of an accident and health insurer shall not apply during any time that the
guaranteeing organization maintains for each organization it sponsors a net worth at least
equal to the capital and surplus requirements set forth in article 11 of chapter 40 of the
Kansas Statutes Annotated for an accident and health insurer.
      (e) (h) The deposit requirements imposed by this act shall not apply to health
maintenance organizations not organized under the laws of this state to the extent an amount
equal to or exceeding that required by this act has been deposited with the commissioner
or an organization or trustee acceptable to the department of insurance of its state of
domicile for the benefit of Kansas enrollees.

      (f) (i) All income from deposits shall belong to the depositing organization and shall be
paid to it as it becomes available. A health maintenance organization that has made a
securities deposit may withdraw that deposit or any part thereof after making a substitute
deposit of cash, securities or any combination of these or other measures of equal amount
and value. Any securities shall be approved by the commissioner before being substituted.

      (j) Every health maintenance organization, when determining liability, shall include an
amount estimated in the aggregate to provide for any unearned premium and for the
payment of all claims for health care expenditures that have been incurred, whether reported
or unreported, that are unpaid and for which the organization is or may be liable, and to
provide for the expense of adjustment or settlement of those claims.

      (g) (k) The commissioner shall require that each health maintenance organization have
a plan for handling insolvency which allows for continuation of benefits for the duration of
the contract period for which premiums have been paid and continuation of benefits to
members who are confined on the date of insolvency in an inpatient facility until their
discharge or expiration of benefits. In considering such a plan, the commissioner may
require:

      (1) Insurance to cover the expenses to be paid for continued benefits after an insolvency;

      (2) provisions in provider contracts that obligate the provider to provide services for the
duration of the period after the health maintenance organization's insolvency for which
premium payment has been made and until the enrollees' discharge from inpatient facilities;

      (3) insolvency reserves;

      (4) acceptable letters of credit; or

      (5) any other arrangements to assure that benefits are continued as specified in this
subsection (g) (k).

      Sec.  41. K.S.A. 1999 Supp. 40-3606 is hereby amended to read as follows: 40-3606.
This act shall apply to all insurance companies, fraternal benefit societies, health
maintenance organizations, reciprocal insurance exchanges, mutual nonprofit hospital and
medical service corporations, captive insurance companies, group funded pools except
municipal group funded pools governed by K.S.A. 12-2616 through 12-2629 and
amendments thereto, prepaid service plans operating under article 19a of chapter 40 of the
Kansas Statutes Annotated, regardless of whether such entities are authorized to do business
in this state, and such entities which are in the process of organization.

      Sec.  42. K.S.A. 1999 Supp. 45-221 is hereby amended to read as follows: 45-221. (a)
Except to the extent disclosure is otherwise required by law, a public agency shall not be
required to disclose:

      (1) Records the disclosure of which is specifically prohibited or restricted by federal
law, state statute or rule of the Kansas supreme court or the disclosure of which is prohibited
or restricted pursuant to specific authorization of federal law, state statute or rule of the
Kansas supreme court to restrict or prohibit disclosure.

      (2) Records which are privileged under the rules of evidence, unless the holder of the
privilege consents to the disclosure.

      (3) Medical, psychiatric, psychological or alcoholism or drug dependency treatment
records which pertain to identifiable patients.

      (4) Personnel records, performance ratings or individually identifiable records
pertaining to employees or applicants for employment, except that this exemption shall not
apply to the names, positions, salaries and lengths of service of officers and employees of
public agencies once they are employed as such.

      (5) Information which would reveal the identity of any undercover agent or any
informant reporting a specific violation of law.

      (6) Letters of reference or recommendation pertaining to the character or qualifications
of an identifiable individual.

      (7) Library, archive and museum materials contributed by private persons, to the extent
of any limitations imposed as conditions of the contribution.

      (8) Information which would reveal the identity of an individual who lawfully makes a
donation to a public agency, if anonymity of the donor is a condition of the donation.

      (9) Testing and examination materials, before the test or examination is given or if it is
to be given again, or records of individual test or examination scores, other than records
which show only passage or failure and not specific scores.

      (10) Criminal investigation records, except that the district court, in an action brought
pursuant to K.S.A. 45-222, and amendments thereto, may order disclosure of such records,
subject to such conditions as the court may impose, if the court finds that disclosure:

      (A) Is in the public interest;

      (B) would not interfere with any prospective law enforcement action;

      (C) would not reveal the identity of any confidential source or undercover agent;

      (D) would not reveal confidential investigative techniques or procedures not known to
the general public;

      (E) would not endanger the life or physical safety of any person; and

      (F) would not reveal the name, address, phone number or any other information which
specifically and individually identifies the victim of any sexual offense in article 35 of chapter
21 of the Kansas Statutes Annotated, and amendments thereto.

      (11) Records of agencies involved in administrative adjudication or civil litigation,
compiled in the process of detecting or investigating violations of civil law or administrative
rules and regulations, if disclosure would interfere with a prospective administrative
adjudication or civil litigation or reveal the identity of a confidential source or undercover
agent.

      (12) Records of emergency or security information or procedures of a public agency,
or plans, drawings, specifications or related information for any building or facility which is
used for purposes requiring security measures in or around the building or facility or which
is used for the generation or transmission of power, water, fuels or communications, if
disclosure would jeopardize security of the public agency, building or facility.

      (13) The contents of appraisals or engineering or feasibility estimates or evaluations
made by or for a public agency relative to the acquisition of property, prior to the award of
formal contracts therefor.

      (14) Correspondence between a public agency and a private individual, other than
correspondence which is intended to give notice of an action, policy or determination
relating to any regulatory, supervisory or enforcement responsibility of the public agency or
which is widely distributed to the public by a public agency and is not specifically in response
to communications from such a private individual.

      (15) Records pertaining to employer-employee negotiations, if disclosure would reveal
information discussed in a lawful executive session under K.S.A. 75-4319, and amendments
thereto.

      (16) Software programs for electronic data processing and documentation thereof, but
each public agency shall maintain a register, open to the public, that describes:

      (A) The information which the agency maintains on computer facilities; and

      (B) the form in which the information can be made available using existing computer
programs.

      (17) Applications, financial statements and other information submitted in connection
with applications for student financial assistance where financial need is a consideration for
the award.

      (18) Plans, designs, drawings or specifications which are prepared by a person other
than an employee of a public agency or records which are the property of a private person.

      (19) Well samples, logs or surveys which the state corporation commission requires to
be filed by persons who have drilled or caused to be drilled, or are drilling or causing to be
drilled, holes for the purpose of discovery or production of oil or gas, to the extent that
disclosure is limited by rules and regulations of the state corporation commission.

      (20) Notes, preliminary drafts, research data in the process of analysis, unfunded grant
proposals, memoranda, recommendations or other records in which opinions are expressed
or policies or actions are proposed, except that this exemption shall not apply when such
records are publicly cited or identified in an open meeting or in an agenda of an open
meeting.

      (21) Records of a public agency having legislative powers, which records pertain to
proposed legislation or amendments to proposed legislation, except that this exemption shall
not apply when such records are:

      (A) Publicly cited or identified in an open meeting or in an agenda of an open meeting;
or

      (B) distributed to a majority of a quorum of any body which has authority to take action
or make recommendations to the public agency with regard to the matters to which such
records pertain.

      (22) Records of a public agency having legislative powers, which records pertain to
research prepared for one or more members of such agency, except that this exemption
shall not apply when such records are:

      (A) Publicly cited or identified in an open meeting or in an agenda of an open meeting;
or

      (B) distributed to a majority of a quorum of any body which has authority to take action
or make recommendations to the public agency with regard to the matters to which such
records pertain.

      (23) Library patron and circulation records which pertain to identifiable individuals.

      (24) Records which are compiled for census or research purposes and which pertain to
identifiable individuals.

      (25) Records which represent and constitute the work product of an attorney.

      (26) Records of a utility or other public service pertaining to individually identifiable
residential customers of the utility or service, except that information concerning billings
for specific individual customers named by the requester shall be subject to disclosure as
provided by this act.

      (27) Specifications for competitive bidding, until the specifications are officially
approved by the public agency.

      (28) Sealed bids and related documents, until a bid is accepted or all bids rejected.

      (29) Correctional records pertaining to an identifiable inmate or release, except that:

      (A) The name; photograph and other identifying information; sentence data; parole
eligibility date; custody or supervision level; disciplinary record; supervision violations;
conditions of supervision, excluding requirements pertaining to mental health or substance
abuse counseling; location of facility where incarcerated or location of parole office
maintaining supervision and address of a releasee whose crime was committed after the
effective date of this act shall be subject to disclosure to any person other than another
inmate or releasee, except that the disclosure of the location of an inmate transferred to
another state pursuant to the interstate corrections compact shall be at the discretion of the
secretary of corrections;

      (B) the ombudsman of corrections, the attorney general, law enforcement agencies,
counsel for the inmate to whom the record pertains and any county or district attorney shall
have access to correctional records to the extent otherwise permitted by law;

      (C) the information provided to the law enforcement agency pursuant to the sex
offender registration act, K.S.A. 22-4901, et seq., and amendments thereto, shall be subject
to disclosure to any person, except that the name, address, telephone number or any other
information which specifically and individually identifies the victim of any offender required
to register as provided by the Kansas offender registration act, K.S.A. 22-4901 et seq. and
amendments thereto, shall not be disclosed; and

      (D) records of the department of corrections regarding the financial assets of an
offender in the custody of the secretary of corrections shall be subject to disclosure to the
victim, or such victim's family, of the crime for which the inmate is in custody as set forth
in an order of restitution by the sentencing court.

      (30) Public records containing information of a personal nature where the public
disclosure thereof would constitute a clearly unwarranted invasion of personal privacy.

      (31) Public records pertaining to prospective location of a business or industry where
no previous public disclosure has been made of the business' or industry's interest in locating
in, relocating within or expanding within the state. This exception shall not include those
records pertaining to application of agencies for permits or licenses necessary to do business
or to expand business operations within this state, except as otherwise provided by law.

      (32) The bidder's list of contractors who have requested bid proposals for construction
projects from any public agency, until a bid is accepted or all bids rejected.

      (33) Engineering and architectural estimates made by or for any public agency relative
to public improvements.

      (34) Financial information submitted by contractors in qualification statements to any
public agency.

      (35) Records involved in the obtaining and processing of intellectual property rights that
are expected to be, wholly or partially vested in or owned by a state educational institution,
as defined in K.S.A. 76-711, and amendments thereto, or an assignee of the institution
organized and existing for the benefit of the institution.

      (36) Any report or record which is made pursuant to K.S.A. 65-4922, 65-4923 or 65-
4924, and amendments thereto, and which is privileged pursuant to K.S.A. 65-4915 or 65-
4925, and amendments thereto.

      (37) Information which would reveal the precise location of an archeological site.

      (38) Any financial data or traffic information from a railroad company, to a public
agency, concerning the sale, lease or rehabilitation of the railroad's property in Kansas.

      (39) Risk-based capital reports, risk-based capital plans and corrective orders including
the working papers and the results of any analysis filed with the commissioner of insurance
in accordance with K.S.A. 1999 Supp. 40-2c20 and section 21, and amendments thereto.

      (40) Memoranda and related materials required to be used to support the annual
actuarial opinions submitted pursuant to subsection (b) of K.S.A. 40-409, and amendments
thereto.

      (41) Disclosure reports filed with the commissioner of insurance under subsection (a)
of K.S.A. 1999 Supp. 40-2,156, and amendments thereto.

      (42) All financial analysis ratios and examination synopses concerning insurance
companies that are submitted to the commissioner by the national association of insurance
commissioners' insurance regulatory information system.

      (43) Any records the disclosure of which is restricted or prohibited by a tribal-state
gaming compact.

      (44) Market research, market plans, business plans and the terms and conditions of
managed care or other third party contracts, developed or entered into by the university of
Kansas medical center in the operation and management of the university hospital which
the chancellor of the university of Kansas or the chancellor's designee determines would
give an unfair advantage to competitors of the university of Kansas medical center.

      (b) Except to the extent disclosure is otherwise required by law or as appropriate during
the course of an administrative proceeding or on appeal from agency action, a public agency
or officer shall not disclose financial information of a taxpayer which may be required or
requested by a county appraiser or the director of property valuation to assist in the
determination of the value of the taxpayer's property for ad valorem taxation purposes; or
any financial information of a personal nature required or requested by a public agency or
officer, including a name, job description or title revealing the salary or other compensation
of officers, employees or applicants for employment with a firm, corporation or agency,
except a public agency. Nothing contained herein shall be construed to prohibit the
publication of statistics, so classified as to prevent identification of particular reports or
returns and the items thereof.

      (c) As used in this section, the term ``cited or identified'' shall not include a request to
an employee of a public agency that a document be prepared.

      (d) If a public record contains material which is not subject to disclosure pursuant to
this act, the public agency shall separate or delete such material and make available to the
requester that material in the public record which is subject to disclosure pursuant to this
act. If a public record is not subject to disclosure because it pertains to an identifiable
individual, the public agency shall delete the identifying portions of the record and make
available to the requester any remaining portions which are subject to disclosure pursuant
to this act, unless the request is for a record pertaining to a specific individual or to such a
limited group of individuals that the individuals' identities are reasonably ascertainable, the
public agency shall not be required to disclose those portions of the record which pertain
to such individual or individuals.

      (e) The provisions of this section shall not be construed to exempt from public disclosure
statistical information not descriptive of any identifiable person.

      (f) Notwithstanding the provisions of subsection (a), any public record which has been
in existence more than 70 years shall be open for inspection by any person unless disclosure
of the record is specifically prohibited or restricted by federal law, state statute or rule of
the Kansas supreme court or by a policy adopted pursuant to K.S.A. 72-6214, and
amendments thereto.

      New Sec.  43. (a) Sections 43 through 45 and amendments thereto shall be known as
the Kansas health care prompt payment act and shall apply to any policy of accident and
sickness insurance issued or renewed in this state.

      (b) The provisions of the Kansas health care prompt payment act shall take effect and
be in force on and after January 1, 2001.

      New Sec.  44. As used in sections 43 through 45 and amendments thereto:

      (a) The term ``clean claim'' means a claim that has no defect or impropriety, including
any lack of required substantiating documentation, or particular circumstance requiring
special treatment that prevents timely payment from being made on the claim under the
Kansas health care prompt payment act.

      (b) The term ``claim'' means a written proof of loss as defined in paragraph (7) of
subsection (A) of K.S.A. 40-2203, and amendments thereto, or an electronic proof of loss
which contains the information required by paragraph (7) of subsection (A) of K.S.A. 40-
2203, and amendments thereto.

      (c) The term ``policy of accident and sickness insurance'' means any policy or contract
insuring against loss resulting from sickness or bodily injury or death by accident, or both,
any hospital or medical expense policy, health, hospital, medical service corporation contract
issued by a stock or mutual company or association, a health maintenance organization or
any other insurer, third party administrator or other entity which pays claims pursuant to a
policy of accident and sickness insurance. The term policy of accident and sickness insurance
does not include any policy or contract of reinsurance, life insurance, endowment or annuity
contract, policies or certificates covering only credit, disability income, long-term care,
medicare supplement, dental, drug, or vision-care only policy, coverage issued as a
supplement to liability insurance, insurance arising out of a workers compensation or similar
law, automobile medical-payment insurance or insurance under which benefits are payable
without regard to fault and which is statutorily required to be contained in any liability
insurance policy or equivalent self-insurance.

      New Sec.  45. (a) Within 30 days after receipt of any claim, and amendments thereto,
any insurer issuing a policy of accident and sickness insurance shall pay a clean claim for
reimbursement in accordance with this section or send a written or electronic notice
acknowledging receipt of and the status of the claim. Such notice shall include the date such
claim was received by the insurer and state that:

      (1) The insurer refuses to reimburse all or part of the claim and specify each reason for
denial; or

      (2) additional information is necessary to determine if all or any part of the claim will
be reimbursed and what specific additional information is necessary.

      (b) If any insurer issuing a policy of accident and sickness insurance fails to comply with
subsection (a), such insurer shall pay interest at the rate of 1% per month on the amount
of the claim that remains unpaid 30 days after the receipt of the claim. The interest paid
pursuant to this subsection shall be included in any late reimbursement without requiring
the person who filed the original claim to make any additional claim for such interest.

      (c) After receiving a request for additional information, the person claiming
reimbursement shall submit all additional information requested by the insurer within 30
days after receipt of the request for additional information. Failure to furnish such additional
information within the time required shall not invalidate nor reduce the claim if it was not
reasonably possible to give such information within such time, provided such proof is
furnished as soon as possible as defined (within the time prescribed) in paragraph (7) of
subsection (A) of K.S.A. 40-2203, and amendments thereto.

      (d) Within 15 days after receipt of all the requested additional information, an insurer
issuing a policy of accident and sickness insurance shall pay a clean claim in accordance
with this section or send a written or electronic notice that states:

      (1) Such insurer refuses to reimburse all or part of the claim; and

      (2) specifies each reason for denial. Any insurer issuing a policy of accident and sickness
insurance that fails to comply with this subsection shall pay interest on any amount of the
claim that remains unpaid at the rate of 1% per month.

      (e) The provisions of subsection (b) shall not apply when there is a good faith dispute
about the legitimacy of the claim, or when there is a reasonable basis supported by specific
information that such claim was submitted fraudulently.

      (f) Any violation of this act by an insurer issuing a policy of accident and sickness
insurance with flagrant and conscious disregard of the provisions of this act or with such
frequency as to constitute a general business practice shall be considered a violation of the
unfair trade practices act in K.S.A. 40-2401 et seq. and amendments thereto.

      (g) The commissioner of insurance shall adopt rules and regulations necessary to carry
out the provisions of the Kansas health care prompt payment act.

      Sec.  46. K.S.A. 1999 Supp. 40-2404 is hereby amended to read as follows: 40-
2404. The following are hereby defined as unfair methods of competition and unfair or
deceptive acts or practices in the business of insurance:

      (1) Misrepresentations and false advertising of insurance policies. Making, issuing,
circulating or causing to be made, issued or circulated, any estimate, illustration, circular,
statement, sales presentation, omission or comparison which:

      (a) Misrepresents the benefits, advantages, conditions or terms of any insurance policy;

      (b) misrepresents the dividends or share of the surplus to be received on any insurance
policy;

      (c) makes any false or misleading statements as to the dividends or share of surplus
previously paid on any insurance policy;

      (d) is misleading or is a misrepresentation as to the financial condition of any person,
or as to the legal reserve system upon which any life insurer operates;

      (e) uses any name or title of any insurance policy or class of insurance policies
misrepresenting the true nature thereof;

      (f) is a misrepresentation for the purpose of inducing or tending to induce the lapse,
forfeiture, exchange, conversion or surrender of any insurance policy;

      (g) is a misrepresentation for the purpose of effecting a pledge or assignment of or
effecting a loan against any insurance policy; or

      (h) misrepresents any insurance policy as being shares of stock.

      (2) False information and advertising generally. Making, publishing, disseminating,
circulating or placing before the public, or causing, directly or indirectly, to be made,
published, disseminated, circulated or placed before the public, in a newspaper, magazine
or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over
any radio or television station, or in any other way, an advertisement, announcement or
statement containing any assertion, misrepresentation or statement with respect to the
business of insurance or with respect to any person in the conduct of such person's insurance
business, which is untrue, deceptive or misleading.

      (3) Defamation. Making, publishing, disseminating or circulating, directly or indirectly,
or aiding, abetting or encouraging the making, publishing, disseminating or circulating of
any oral or written statement or any pamphlet, circular, article or literature which is false,
or maliciously critical of or derogatory to the financial condition of any person, and which
is calculated to injure such person.

      (4) Boycott, coercion and intimidation. Entering into any agreement to commit, or by
any concerted action committing, any act of boycott, coercion or intimidation resulting in
or tending to result in unreasonable restraint of the business of insurance, or by any act of
boycott, coercion or intimidation monopolizing or attempting to monopolize any part of the
business of insurance.

      (5) False statements and entries. (a) Knowingly filing with any supervisory or other
public official, or knowingly making, publishing, disseminating, circulating or delivering to
any person, or placing before the public, or knowingly causing directly or indirectly, to be
made, published, disseminated, circulated, delivered to any person, or placed before the
public, any false material statement of fact as to the financial condition of a person.

      (b) Knowingly making any false entry of a material fact in any book, report or statement
of any person or knowingly omitting to make a true entry of any material fact pertaining to
the business of such person in any book, report or statement of such person.

      (6) Stock operations and advisory board contracts. Issuing or delivering or permitting
agents, officers or employees to issue or deliver, agency company stock or other capital
stock, or benefit certificates or shares in any common-law corporation, or securities or any
special or advisory board contracts or other contracts of any kind promising returns and
profits as an inducement to insurance. Nothing herein shall prohibit the acts permitted by
K.S.A. 40-232, and amendments thereto.

      (7) Unfair discrimination. (a) Making or permitting any unfair discrimination between
individuals of the same class and equal expectation of life in the rates charged for any
contract of life insurance or life annuity or in the dividends or other benefits payable thereon,
or in any other of the terms and conditions of such contract.

      (b) Making or permitting any unfair discrimination between individuals of the same
class and of essentially the same hazard in the amount of premium, policy fees or rates
charged for any policy or contract of accident or health insurance or in the benefits payable
thereunder, or in any of the terms or conditions of such contract, or in any other manner
whatever.

      (c) Refusing to insure, or refusing to continue to insure, or limiting the amount, extent
or kind of coverage available to an individual, or charging an individual a different rate for
the same coverage solely because of blindness or partial blindness. With respect to all other
conditions, including the underlying cause of the blindness or partial blindness, persons who
are blind or partially blind shall be subject to the same standards of sound actuarial principles
or actual or reasonably anticipated experience as are sighted persons. Refusal to insure
includes denial by an insurer of disability insurance coverage on the grounds that the policy
defines ``disability'' as being presumed in the event that the insured loses such person's
eyesight. However, an insurer may exclude from coverage disabilities consisting solely of
blindness or partial blindness when such condition existed at the time the policy was issued.

      (d) Refusing to insure, or refusing to continue to insure, or limiting the amount, extent
or kind of coverage available for accident and health and life insurance to an applicant who
is the proposed insured or charge a different rate for the same coverage or excluding or
limiting coverage for losses or denying a claim incurred by an insured as a result of abuse
based on the fact that the applicant who is the proposed insured is, has been, or may be the
subject of domestic abuse, except as provided in subpart (v). ``Abuse'' as used in this
subsection (7)(d) means one or more acts defined in subsection (a) or (b) of K.S.A. 60-3102
and amendments thereto between family members, current or former household members,
or current or former intimate partners.

      (i) An insurer may not ask an applicant for life or accident and health insurance who is
the proposed insured if the individual is, has been or may be the subject of domestic abuse
or seeks, has sought or had reason to seek medical or psychological treatment or counseling
specifically for abuse, protection from abuse or shelter from abuse.

      (ii) Nothing in this section shall be construed to prohibit a person from declining to
issue an insurance policy insuring the life of an individual who is, has been or has the
potential to be the subject of abuse if the perpetrator of the abuse is the applicant or would
be the owner of the insurance policy.

      (iii) No insurer that issues a life or accident and health policy to an individual who is,
has been or may be the subject of domestic abuse shall be subject to civil or criminal liability
for the death or any injuries suffered by that individual as a result of domestic abuse.

      (iv) No person shall refuse to insure, refuse to continue to insure, limit the amount,
extent or kind of coverage available to an individual or charge a different rate for the same
coverage solely because of physical or mental condition, except where the refusal, limitation
or rate differential is based on sound actuarial principles.

      (v) Nothing in this section shall be construed to prohibit a person from underwriting or
rating a risk on the basis of a preexisting physical or mental condition, even if such condition
has been caused by abuse, provided that:

      (A) The person routinely underwrites or rates such condition in the same manner with
respect to an insured or an applicant who is not a victim of abuse;

      (B) the fact that an individual is, has been or may be the subject of abuse may not be
considered a physical or mental condition; and

      (C) such underwriting or rating is not used to evade the intent of this section or any
other provision of the Kansas insurance code.

      (vi) Any person who underwrites or rates a risk on the basis of preexisting physical or
mental condition as set forth in subsection (7)(d)(v), shall treat such underwriting or rating
as an adverse underwriting decision pursuant to K.S.A. 40-2,112, and amendments thereto.

      (vii) The provisions of subsection (d) shall apply to all policies of life and accident and
health insurance issued in this state after the effective date of this act and all existing
contracts which are renewed on or after the effective date of this act.

      (8) Rebates. (a) Except as otherwise expressly provided by law, knowingly permitting,
offering to make or making any contract of life insurance, life annuity or accident and health
insurance, or agreement as to such contract other than as plainly expressed in the insurance
contract issued thereon; paying, allowing, giving or offering to pay, allow or give, directly or
indirectly, as inducement to such insurance, or annuity, any rebate of premiums payable on
the contract, any special favor or advantage in the dividends or other benefits thereon, or
any valuable consideration or inducement whatever not specified in the contract; or giving,
selling, purchasing or offering to give, sell or purchase as inducement to such insurance
contract or annuity or in connection therewith, any stocks, bonds or other securities of any
insurance company or other corporation, association or partnership, or any dividends or
profits accrued thereon, or anything of value whatsoever not specified in the contract.

      (b) Nothing in subsection (7) or (8)(a) shall be construed as including within the
definition of discrimination or rebates any of the following practices:

      (i) In the case of any contract of life insurance or life annuity, paying bonuses to
policyholders or otherwise abating their premiums in whole or in part out of surplus
accumulated from nonparticipating insurance. Any such bonuses or abatement of premiums
shall be fair and equitable to policyholders and for the best interests of the company and
its policyholders;

      (ii) in the case of life insurance policies issued on the industrial debit plan, making
allowance to policyholders who have continuously for a specified period made premium
payments directly to an office of the insurer in an amount which fairly represents the saving
in collection expenses; or

      (iii) readjustment of the rate of premium for a group insurance policy based on the loss
or expense experience thereunder, at the end of the first or any subsequent policy year of
insurance thereunder, which may be made retroactive only for such policy year.

      (9) Unfair claim settlement practices. It is an unfair claim settlement practice if any of
the following or any rules and regulations pertaining thereto are: (A) Committed flagrantly
and in conscious disregard of such provisions, or (B) committed with such frequency as to
indicate a general business practice.

      (a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages
at issue;

      (b) failing to acknowledge and act reasonably promptly upon communications with
respect to claims arising under insurance policies;

      (c) failing to adopt and implement reasonable standards for the prompt investigation of
claims arising under insurance policies;

      (d) refusing to pay claims without conducting a reasonable investigation based upon all
available information;

      (e) failing to affirm or deny coverage of claims within a reasonable time after proof of
loss statements have been completed;

      (f) not attempting in good faith to effectuate prompt, fair and equitable settlements of
claims in which liability has become reasonably clear;

      (g) compelling insureds to institute litigation to recover amounts due under an insurance
policy by offering substantially less than the amounts ultimately recovered in actions brought
by such insureds;

      (h) attempting to settle a claim for less than the amount to which a reasonable person
would have believed that such person was entitled by reference to written or printed
advertising material accompanying or made part of an application;

      (i) attempting to settle claims on the basis of an application which was altered without
notice to, or knowledge or consent of the insured;

      (j) making claims payments to insureds or beneficiaries not accompanied by a statement
setting forth the coverage under which payments are being made;

      (k) making known to insureds or claimants a policy of appealing from arbitration awards
in favor of insureds or claimants for the purpose of compelling them to accept settlements
or compromises less than the amount awarded in arbitration;

      (l) delaying the investigation or payment of claims by requiring an insured, claimant or
the physician of either to submit a preliminary claim report and then requiring the
subsequent submission of formal proof of loss forms, both of which submissions contain
substantially the same information;

      (m) failing to promptly settle claims, where liability has become reasonably clear, under
one portion of the insurance policy coverage in order to influence settlements under other
portions of the insurance policy coverage; or

      (n) failing to promptly provide a reasonable explanation of the basis in the insurance
policy in relation to the facts or applicable law for denial of a claim or for the offer of a
compromise settlement.

      (10) Failure to maintain complaint handling procedures. Failure of any person, who is
an insurer on an insurance policy, to maintain a complete record of all the complaints which
it has received since the date of its last examination under K.S.A. 40-222, and amendments
thereto; but no such records shall be required for complaints received prior to the effective
date of this act. The record shall indicate the total number of complaints, their classification
by line of insurance, the nature of each complaint, the disposition of the complaints, the
date each complaint was originally received by the insurer and the date of final disposition
of each complaint. For purposes of this subsection, ``complaint'' means any written
communication primarily expressing a grievance related to the acts and practices set out in
this section.

      (11) Misrepresentation in insurance applications. Making false or fraudulent statements
or representations on or relative to an application for an insurance policy, for the purpose
of obtaining a fee, commission, money or other benefit from any insurer, agent, broker or
individual.

      (12) Statutory violations. Any violation of any of the provisions of K.S.A. 40-276a, 40-
1515, and amendments thereto, or K.S.A. 1999 Supp. 40-2,155 and amendments thereto.

      (13) Disclosure of information relating to adverse underwriting decisions and refund of
premiums. Failing to comply with the provisions of K.S.A. 40-2,112, and amendments
thereto, within the time prescribed in such section.

      (14) Rebates and other inducements in title insurance. (a) No title insurance company
or title insurance agent, or any officer, employee, attorney, agent or solicitor thereof, may
pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to
obtaining any title insurance business, any rebate, reduction or abatement of any rate or
charge made incident to the issuance of such insurance, any special favor or advantage not
generally available to others of the same classification, or any money, thing of value or other
consideration or material inducement. The words ''charge made incident to the issuance of
such insurance`` includes, without limitations, escrow, settlement and closing charges.

      (b) No insured named in a title insurance policy or contract nor any other person directly
or indirectly connected with the transaction involving the issuance of the policy or contract,
including, but not limited to, mortgage lender, real estate broker, builder, attorney or any
officer, employee, agent representative or solicitor thereof, or any other person may
knowingly receive or accept, directly or indirectly, any rebate, reduction or abatement of
any charge, or any special favor or advantage or any monetary consideration or inducement
referred to in (14)(a).

      (c) Nothing in this section shall be construed as prohibiting:

      (i) The payment of reasonable fees for services actually rendered to a title insurance
agent in connection with a title insurance transaction;

      (ii) the payment of an earned commission to a duly appointed title insurance agent for
services actually performed in the issuance of the policy of title insurance; or

      (iii) the payment of reasonable entertainment and advertising expenses.

      (d) Nothing in this section prohibits the division of rates and charges between or among
a title insurance company and its agent, or one or more title insurance companies and one
or more title insurance agents, if such division of rates and charges does not constitute an
unlawful rebate under the provisions of this section and is not in payment of a forwarding
fee or a finder's fee.

      (e) No title insurer or title agent may accept any order for, issue a title insurance policy
to, or provide services to, an applicant if it knows or has reason to believe that the applicant
was referred to it by any producer of title business or by any associate of such producer,
where the producer, the associate, or both, have a financial interest in the title insurer or
title agent to which business is referred unless the producer has disclosed to the buyer,
seller and lender the financial interest of the producer of title business or associate referring
the title insurance business.

      (f) No title insurer or title agent may accept an order for title insurance business, issue
a title insurance policy, or receive or retain any premium, or charge in connection with any
transaction if: (i) The title insurer or title agent knows or has reason to believe that the
transaction will constitute controlled business for that title insurer or title agent, and (ii)
20% or more of the gross operating revenue of that title insurer or title agent during the six
full calendar months immediately preceding the month in which the transaction takes place
is derived from controlled business. The prohibitions contained in this subparagraph shall
not apply to transactions involving real estate located in a county that has a population, as
shown by the last preceding decennial census, of 10,000 or less.

      (g) The commissioner shall adopt any regulations necessary to carry out the provisions
of this act.

      (15) Disclosure of nonpublic personal information. No person shall disclose any
nonpublic personal information to a nonaffiliated third party contrary to the provisions of
title V of the Gramm-Leach-Bliley act of 1999 (public law 106-102). The commissioner may
adopt rules and regulations necessary to carry out this section. Such rules and regulations
shall be consistent with and not more restrictive than standards contained in regulations
promulgated under title V of the Gramm-Leach-Bliley act of 1999 (public law 106-102) by
federal regulatory agencies governing financial institutions doing business in Kansas.

      New Sec.  47. As used in sections 47 through 53 and amendments thereto:

      (a) ``Carrier'' means any insurance company, nonprofit medical and hospital service
corporation, nonprofit optometric, dental, or pharmacy service corporation, municipal
group-funded pool, fraternal benefit society or health maintenance organization, as these
terms are defined by chapter 40 of the Kansas Statutes Annotated, and amendments thereto,
that offers health benefit plans covering eligible employees of one or more small employers
in the state.

      (b) ``Health committee'' means the Kansas business health policy committee as specified
in section 48, and amendments thereto.

      (c) ``Dependent'' means the spouse or any child of an eligible employee.

      (d) ``Eligible employee'' shall have the meaning ascribed to it in K.S.A. 40-2209d and
amendments thereto.

      (e) ``Health benefit plan'' means any hospital or medical expense policy, health, hospital
or medical services corporation contract, and a plan provided by a municipal group-funded
pool, or a health maintenance organization contract offered by any employer or any
certificate issued under any such policy, contract or plan.

      (f) ``Kansas business health partnership'' or ``health partnership'' means a nonrisk
bearing nonprofit corporation that has responded to a request for a proposal by the health
committee and has been selected by the health committee to provide health insurance
through multiple unaffiliated participating carriers to small employers and their employees.

      (g) ``Low wage or modest wage employee'' means any employee whose family income
does not exceed 200% of the poverty level.

      (h) ``Small employer'' shall have the meaning ascribed to it in K.S.A. 40-2209d and
amendments thereto.

      New Sec.  48. (a) The governor of the state of Kansas shall appoint a cabinet level
committee which shall be known as the Kansas business health policy committee.

      (b) The Kansas business health policy committee, hereinafter referred to as the health
committee, shall consist of:

      (1) The secretary of the department of commerce and housing or the secretary's
designee;

      (2) the secretary of the department of social and rehabilitation services or the secretary's
designee;

      (3) the commissioner of insurance or the commissioner's designee;

      (4) one member appointed by the president of the senate;

      (5) one member appointed by the speaker of the house of representatives;

      (6) one member appointed by the minority leader of the senate;

      (7) one member appointed by the minority leader of the house of representatives; and

      (8) three members at large from the private sector appointed by the governor.

      The secretary of each state agency represented on this committee shall provide such staff
and other resources as the health committee may require.

      (c)  (1) The initial meeting of the health committee shall be convened within 60 days
after the effective date of this act by the governor at a time and place designated by the
governor.

      (2) Meetings of the health committee subsequent to its initial meeting shall be held and
conducted in accordance with policies and procedures established by the health committee.

      (3) Commencing at the time of the initial meeting of the health committee, the powers,
authorities, duties and responsibilities conferred and imposed upon the health committee
by this act shall be operative and effective.

      (d) The health committee shall develop and approve a request for proposals for a
qualified entity to serve as the Kansas business health partnership, hereinafter referred to
as health partnership, which shall provide a mechanism to combine federal and state
subsidies with contributions from employers and employees to purchase health insurance
in accordance with guidelines developed by the health committee.

      (e) The health committee shall evaluate responses to the request for proposals and select
the qualified entity to serve as the health partnership.

      (f) The health committee shall:

      (1) Develop and approve subsidy eligibility criteria provided that:

      (A) Low wage and modest wage employees of small employers shall be eligible for
subsidies if:

      (1) The small employer has not previously offered health insurance coverage; or

      (2) the small employer has previously offered health insurance coverage and a majority
of such small employer's employees are low wage or modest wage employees as defined in
section 1;

      (B) any small employer's employee with a child who is eligible for coverage under the
state childrens' health insurance program established by K.S.A. 1999 Supp. 38-2001 et seq.,
and amendments thereto, or in the state medical assistance program shall be eligible
automatically for a subsidy and shall be included in the determination of eligibility for the
small employer and its low-and-modest wage employees; and

      (C) at least 70% of the small employer's employees are insured through the partnership;
and

      (2) determine and arrange for eligibility determination for subsidies of low wage or
modest wage employees; and

      (3) develop subsidy schedules based upon employee wage levels.

      (g) The health committee shall oversee and monitor the ongoing operation of any
subsidy program and the financial accountability of all subsidy funds.

      (h) The health committee is hereby authorized to accept funds from the federal
government, or its agencies, or any other source whatsoever for research studies,
investigation, planning and other purposes related to implementation of the objectives of
this act. Any funds so received shall be deposited in the state treasury and shall be credited
to a special revenue fund which is hereby created and shall be known as the health
committee insurance fund and used in accordance with or direction of the contributing
federal agencies. Expenditures from such fund may be made for any purpose in keeping
with the responsibilities, functions and authority of the department. Warrants on such fund
shall be drawn in the same manner as required of other state agencies upon vouchers signed
by the secretary of the department of social and rehabilitation services upon receiving prior
approval of the health committee.

      (i) The health committee is authorized to develop policies for the use of additional
federal or private funds to subsidize health insurance coverage for low-and-modest wage
employees of predominantly low-wage small employers.

      (j) The health committee is hereby authorized to organize, or cause to be organized,
one or more advisory committees. No member of any advisory committee established under
this subsection shall receive any payment or other compensation from the health
partnership. The membership of each advisory committee established under this subsection
shall contain at least one representative who is a small employer and one representative who
is an eligible employee as defined in section 1 and one representative of the insurance
industry.

      New Sec.  49. (a) The health partnership selected by the health committee shall:

      (1) Be a domestic not-for-profit corporation; and

      (2) have a board of directors which includes among its members at least one director
who is a small employer and at least one director who is an employee.

      (3) No director shall have any interest in any business which sells health insurance or
which provides or delivers any health care services.

      (b) Operate the Kansas business health partnership.

      New Sec.  50. The health partnership shall develop and offer two or more health benefit
plans to small employers. In any health benefit plan developed under this act, any carrier
may contract for coverage within the scope of this act notwithstanding any mandated
coverages otherwise required by state law. Except for preventative and health screening
services, the provisions of K.S.A. 40-2,100 to 40-2,105, inclusive, 40-2114 and subsection
(i) of 40-2209 and 40-2229 and 40-2230, and K.S.A. 1999 Supp. 40-2,163, 40-2,164, 40-
2,165 and 40-2,166, and amendments thereto, shall not be mandatory with respect to any
health benefit plan developed under this act. In performing these duties, the health
partnership shall:

      (a) Develop and offer two or more lower-cost benefit plans such that:

      (1) Each health benefit plan is consistent with any criteria established by the health
partnership;

      (2) each health benefit plan shall be offered by all participating carriers except that no
participating carrier shall be required to offer any health benefit plan, or portion thereof,
which such participating carrier is not licensed or authorized to offer in this state;

      (3) no participating carrier shall offer any health benefit plan developed under this act
to any small employer unless such small employer is covered through the health partnership.

      (b) Develop and make available one or more supplemental health benefit plans or one
or more other benefit options so that the total package of health benefits available to all
eligible children who receive health benefits through the health partnership meets, at a
minimum, standards established by the federal health insurance program.

      (c) Offer coverage to any qualifying small employer.

      (d) Offer employees of participating small employers a choice of participating carriers.

      (e)  (1) Include centralized and consolidated enrollment, billing and customer service
functions;

      (2) use one standard enrollment form for all participating carriers; and

      (3) submit one consolidated bill to the small employer.

      (f) Issue or cause to be issued a request for proposals and contract with a qualified
vendor for any administrative or other service not performed by the health committee or
provided to the health committee under subsection (b) of section 48.

      (g) Issue a request for proposals and selectively contract with carriers.

      (h) Establish conditions of participation for small employers that conform with K.S.A.
40-2209b et seq., and amendments thereto, and the health insurance portability and
accountability act of 1996 (Public Law 104-191).

      (i) Enroll small employers and their eligible employees and dependents in health benefit
plans developed under this act.

      (j) Bill and collect premiums from participating small employers including any share of
the premium paid by such small employer's enrolled employees.

      (k) Remit funds collected under subsection (h) to the appropriate contracted carriers.

      (l) Provide that each eligible low-or-modest wage employee shall be permitted to enroll
in such employee's choice of participating carrier.

      (m) Develop premium rating policies for small employers.

      (1) In consultation with the health committee, the health partnership shall ensure, to
the maximum extent possible, that the combined effect of the premium rating and subsidy
policies is that subsidized workers and the dependents of such subsidized workers can afford
coverage.

      (2) Any rating policy developed under this subsection may vary with respect to subsidy
status of workers and the dependents of such workers.

      (n) Be authorized to contract for additional group vision, dental and life insurance plans,
and other limited insurance products.

      (o) Take whatever action is necessary to assure that any adult or child who receives
health benefit coverage through the health benefit partnership and who is eligible for the
state medical assistance program shall remain eligible to participate in the state health
insurance premium payment program.

      (p) Coordinate with the department of social and rehabilitation services to assure that
any funds available for the coverage of infants and pregnant women under the state medical
assistance program are also available for the benefit of eligible infants and pregnant women
who receive health benefit coverage through the health partnership.

      New Sec.  51. The health committee may provide a mechanism for direct subsidies to
low and modest wage employees of employers acquiring coverage through a direct contract
with a carrier rather than through the health partnership, and for provision to such
employees of a supplemental benefit plan as described in subsection (a) of section 50.

      New Sec.  52. The department of social and rehabilitation services shall investigate and
pursue all possible policy options to bring into this partnership title XIX and the title XXI
eligible families of any employees employed by a small employer. Further, the department
of social and rehabilitation services shall develop and seek federal approval of any
appropriate variance or state plan amendment for the state children's health insurance
program established by K.S.A. 1999 Supp. 38-2001 et seq., and amendments thereto, and
the state medical assistance program required to accomplish the purposes of this act.

      New Sec.  53. (a) Sections 47 through 53 and amendments thereto shall be known as
the Kansas business health partnership act.

      (b) The provisions of the Kansas business health partnership act shall expire on July 1,
2002.

      New Sec.  54. As used in sections 54 through 56 and amendments thereto:

      (a)  (1) ``Amusement ride'' means any mechanical or electrical device that carries or
conveys passengers along, around or over a fixed or restricted route or course or within a
defined area for the purpose of giving its passengers amusement, pleasure, thrills or
excitement and shall include but not be limited to:

      (A) Rides commonly known as ferris wheels, carousels, parachute towers, bungee
jumping, reverse bungee jumping, tunnels of love and roller coasters;

      (B) equipment generally associated with winter activities, such as ski lifts, ski tows, j-
bars, t-bars, chair lifts and aerial tramways;

      (C) equipment not originally designed to be used as an amusement ride, such as cranes
or other lifting devices, when used as part of an amusement ride;

      (D) any inflatable equipment or other device that does not have a rigid structure or
frame and which is inflated or otherwise supported by air pressure; and

      (E) any amusement ride not excluded under paragraph (2) of this subsection.

      (2) ``Amusement ride'' shall not include:

      (A) Games, concessions and associated structures;

      (B) any single passenger coin-operated ride that: (i) Is manually, mechanically or
electrically operated; (ii) is customarily placed in a public location; and (iii) does not normally
require the supervision or services of an operator; and

      (C) nonmechanized playground equipment, including, but not limited to, swings,
seesaws, stationary spring-mounted animal features, rider-propelled merry-go-rounds,
climbers, slides, trampolines and physical fitness devices.

      (b) ``Operator'' means a person actually engaged in or directly controlling the operations
of an amusement ride.

      (c) ``Owner'' means a person who owns, leases, controls or manages the operations of
an amusement ride and may include the state or any political subdivision of the state.

      New Sec.  55. No amusement ride shall be operated in this state unless at the time of
operation the owner has in effect an insurance policy, written by an insurance company
authorized to do business in Kansas, insuring the owner and operator against liability for
bodily injury to persons arising out of the operation of the amusement ride. Such insurance
policy shall:

      (a) Provide for coverage in an amount not less than $1,000,000 except that this
requirement shall not apply if the owner of such amusement ride is the state, any subdivision
of the state or a not-for-profit organization organized under the laws of Kansas; and

      (b) name as an additional insured any person contracting with the owner for the
amusement ride's operation.

      New Sec.  56. The governing body of any city or county may establish and enforce safety
standards for amusement rides and may require insurance in an amount which exceeds the
amount required by section 55, and amendments thereto. The governing body of any city
or county may allow, in lieu of an insurance policy, an owner or operator to be self-insured.

      New Sec.  57. (a) Sections 54 through 57 and amendments thereto shall be known as
the amusement ride insurance act.

      (b) The amusement ride insurance act shall take effect and be in force on and after
January 1, 2001.

      Sec.  58. K.S.A. 40-2a23, 40-2b22, 40-12a09 and K.S.A. 1999 Supp. 40-2404, 40-3202,
40-3209, 40-3220, 40-3227, 40-3606 and 45-221 are hereby repealed.'';

      And by renumbering remaining sections accordingly;

      In the title, in line 12, by striking all after the semicolon; in line 13, by striking all before
the second ``concerning''; in line 14, by striking all after the semicolon; in line 15, by striking
all before ``amending'' and inserting ``concerning health maintenance organizations;
concerning standards for prompt, fair and equitable settlement of health care claims and
payment for health care services; establishing unfair trade practices act violations;''; in line
16, by striking all after ``Supp.''; in line 17, by striking all before the second ``and'' and
inserting ``40-2404, 40-3202, 40-3209, 40-3220, 40-3227, 40-3606 and 45-221'';

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Don Steffes

                                                                                    Sandy Praeger

                                                                                    Paul Feleciano, Jr.
 Conferees on the part of Senate
                                                                                   

                                                                                    Robert Tomlinson

                                                                                    Don Myers

                                                                                    Tom Burroughs
 Conferees on part of House


   Senator Steffes moved the Senate adopt the Conference Committee Report on S Sub
for HB 2005.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.


EXPLANATION OF VOTE
 Mr. President: I vote yes on the conference report for HB 2005. There are many great
policies being adopted:

 1. Prompt Pay for health care services;

 2. HMO solvency;

 3. Health care insurance assistance for modest wage employees of small employers.

 My regret is that the health care insurance assistance will not apply to independent family
farmers like the original senate version did.

 Also, I have talked to the Chairman of the FI&I committee who has guaranteed hearings
and action to exempt home-owned carnivals from the detrimental provisions of this
conference committee report. Since the provisions of carnival insurance do not take effect
until January 1, 2001, time exists to accomplish this correction.--Stan Clark

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2007, submits the following report:

      The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed as Senate Substitute for Substitute
for House Bill No. 2007, as amended by Senate Committee of the Whole, as follows:

      On page 1, following line 15, by inserting:

      ``Section  1. As used in this act:

      (a) ``Abortion'' means an abortion as defined by K.S.A. 65-6701, and amendments
thereto.

      (b)  (1) ``Consideration'' means:

      (A) Any payment made or debt incurred;

      (B) any gift, honorarium or recognition of value bestowed;

      (C) any price, charge or fee which is waived, forgiven, reduced or indefinitely delayed;

      (D) any loan or debt which is canceled or otherwise forgiven; or

      (E) the transfer of any item from one person to another or provision of any service or
granting of any opportunity for which a charge is customarily made, without charge or for
a reduced charge.

      (2) ``Consideration'' shall not mean:

      (A) A payment in an amount not to exceed $25 for the cost of transporting, processing,
preserving and storing fetal tissue; or

      (B) a payment in an amount not to exceed the actual cost, as documented by the delivery
service, of transporting fetal tissue.

      (c) ``Delivery service'' means a common carrier as defined by K.S.A. 66-105, and
amendments thereto, or other person or entity used to transport fetal tissue.

      (d) ``Fetal tissue'' means any tissue, cells or organs obtained from a dead human embryo
or fetus after an abortion or after a stillbirth.

      (e) ``Person'' means a person as defined by K.S.A. 65-425, and amendments thereto.

      (f) ``Stillbirth'' means a stillbirth as defined by K.S.A. 65-2401, and amendments thereto.

      Sec.  2. Except as specifically provided by this act, nothing in this act shall be construed
as either permitting or prohibiting the use of fetal tissue for any type of scientific, research,
laboratory or other kind of experimentation either prior to or subsequent to any abortion
or stillbirth.

      Sec.  3. This act shall not apply to:

      (a) The transfer of fetal tissue to a pathologist for testing or examination; or

      (b) the transfer of fetal tissue for the purpose of immediate burial, cremation or final
disposition.

      Sec.  4. (a) No person shall solicit, offer, knowingly acquire or accept or transfer any
fetal tissue for consideration.

      (b) No person shall solicit, offer or knowingly acquire or accept or transfer any fetal
tissue for the purpose of transplantation of such tissue into another person if:

      (1) The fetal tissue will be or is obtained pursuant to an abortion; and

      (2)  (A) the donation of such fetal tissue will be or is made pursuant to a promise to the
donating individual that the donated tissue will be transplanted into a recipient specified by
such donating individual;

      (B) such fetal tissue will be transplanted into a relative of the donating individual; or

      (C) the person who solicits or knowingly acquires or accepts the donation of such fetal
tissue has provided consideration for the costs associated with such abortion.

      (c) Any person who intentionally, knowingly or recklessly violates this section shall be
guilty of a severity level 2, nonperson felony.

      Sec.  5. (a) Every person who transfers fetal tissue to another person shall submit
annually a written report to the secretary of the department of health and environment
which contains the following:

      (1) The date of transfer;

      (2) a description of the fetal tissue;

      (3) the name and address of the transferor and the transferee;

      (4) the amount of consideration received by the transferor for making the transfer;

      (5) the mode of transfer or shipment; and

      (6) the name of the delivery service.

      (b) The identity of the woman donating the fetal tissue shall be confidential and shall
not be included in any report required by this section.

      (c) No person shall ship fetal tissue without disclosing to the delivery service that human
tissue is contained in such shipment.

      (d) Except as provided herein, information obtained by the secretary of health and
environment under this section shall be confidential and shall not be disclosed in a manner
that would reveal the identity of any person who submits a report to the secretary under
this section. Such information, including information identifying any person submitting a
report hereunder, may be disclosed to the attorney general upon a showing that a reasonable
cause exists to believe that a violation of this act has occurred. Any information disclosed to
the attorney general pursuant to this subsection shall be used solely for the purposes of a
criminal prosecution.

      (e) For the purpose of maintaining confidentiality, reports required by this section shall
identify the name and address of the person submitting such report only by confidential
code number assigned by the secretary of health and environment to such person and the
department of health and environment shall maintain such reports only by such number.

      (f) Any person who intentionally, knowingly or recklessly violates this section shall be
guilty of a class A nonperson misdemeanor.'';

      By renumbering section 1 as section 6;

      Also on page 1, following line 24, by inserting:

      ``(c) Any person who intentionally, knowingly or recklessly violates this section shall be
guilty of a severity level 2, nonperson felony.'';

      Also on page 1, in line 25, by striking ``(c)'' and inserting ``Sec. 7. (a)''; in line 30, by
striking ``(d)'' and inserting ``(b)''; in line 32, by striking ``(e)'' and inserting ``Sec. 8.'';

      By renumbering section 2 as section 9;

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Lana Oleen

                                                                                    John Vratil

                                                                                    Sherman Jones
 Conferees on the part of Senate
                                                                                   

                                                                                    Tony Powell

                                                                                    Becky Hutchins

                                                                                    Thomas Klein
 Conferees on part of House


   Senator Oleen moved the Senate adopt the Conference Committee Report on S Sub for
Sub HB 2007.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2624, submits the following report:

      The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed as Senate Substitute for House Bill
No. 2624, as amended by Senate Committee of the Whole as follows:

      On page 1, in line 22, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 2, in line 9, by striking ``25'' and inserting ``36''; in line 21, before ``K.S.A.'' by
inserting ``On and after July 1, 2000,''; in line 22, by striking ``25'' and inserting ``36''; in line
27, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 3, in line 14, by striking ``25'' and inserting ``36''; in line 26, before ``K.S.A.'' by
inserting ``On and after July 1, 2000,''; in line 27, by striking ``25'' and inserting ``36''; in line
32, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 5, in line 15, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 7, by striking all in lines 42 and 43;

      On page 8, by striking all in lines 1 through 13;

      On page 9, in line 19, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 10, after line 9, by inserting the following:

      ``Sec.  8. K.S.A. 1999 Supp. 46-233 is hereby amended to read as follows: 46-233. (a)
(1) No state officer or employee shall in the capacity as such officer or employee be
substantially involved in the preparation of or participate in the making of a contract with
any person or business by which such officer or employee is employed or in whose business
such officer or employee or any member of such officer's or employee's immediate family
has a substantial interest and no such person or business shall enter into any contract where
any state officer or employee, acting in such capacity, is a signatory to, has been substantially
involved in the preparation of or is a participant in the making of such contract and is
employed by such person or business or such officer or employee or any member of such
officer's or employee's immediate family has a substantial interest in such person or business.

      (2) Except as otherwise provided in this subsection, whenever any individual has
participated as a state officer or employee in the making of any contract with any person or
business, such individual shall not accept employment with such person or business as an
employee, independent contractor or subcontractor until two years after performance of
the contract is completed or until two years after the individual terminates employment as
a state officer or employee, whichever is sooner. This prohibition on accepting employment
shall not apply in any case in which: (A) A state officer or employee who participated in
making a contract while employed by an institution that is subsequently closed or abolished
or otherwise ceases operations or that has budget reductions imposed that are associated
with such closure and who is laid off from employment with such institution for the reason
of such closure, abolition or cessation of operations or such imposition of budget reductions;
or (B) a state officer or employee who participated in making a contract while employed by
an institution that is scheduled to be closed or abolished or to cease operations, who is
scheduled to be laid off from employment with such institution for the reason of the
scheduled closure, abolition or cessation of operations, and who voluntarily terminates such
employment after receiving such state officer or employee's notice of the scheduled layoff;
(C) a state officer or employee who participated in making a contract while employed by
the department of corrections at the Topeka correctional facility and who is laid off from
such employment due to the transfer of the reception and diagnostic center from the Topeka
correctional facility to the El Dorado correctional facility; (D) a state officer or employee
who participated in making a contract while employed by the department of corrections at
the Topeka correctional facility and who voluntarily terminates from such employment after
receiving such state officer or employee's notice of scheduled layoff due to the transfer of
the reception and diagnostic center from the Topeka correctional facility to the El Dorado
correctional facility; (E) a state officer or employee who participated in making a contract
while employed by the department of social and rehabilitation services within the division
of services for the blind or at Kansas industries for the blind at facilities located on the
Topeka state hospital property, as defined by K.S.A. 1999 Supp. 75-37,123 and amendments
thereto, and who is laid off from such employment due to the closure, abolition or other
cessation of operations of the Kansas industries for the blind as a state program at such
location; or (F) a state officer or employee who participated in making a contract while
employed by the department of social and rehabilitation services within the division of
services for the blind or at Kansas industries for the blind at facilities located on the Topeka
state hospital property, as defined by K.S.A. 1999 Supp. 75-37,123 and amendments thereto,
and who voluntarily terminates from such employment after receiving such state officer's or
employee's notice of scheduled layoff due to the closure, abolition or other cessation of
operations of the Kansas industries for the blind as a state program at such location. As used
in this subsection (a)(2), ``laid off'' and ``layoff'' mean, in the case of a state officer or
employee in the classified service under the Kansas civil service act, being laid off under
K.S.A. 75-2948, and amendments thereto, and, in the case of a state officer or employee in
the unclassified service under the Kansas civil service act, being terminated from
employment with the state agency by the appointing authority, except that ``laid off'' and
``layoff'' shall not include any separation from employment pursuant to a budget reduction
or expenditure authority reduction and a reduction of F.T.E. positions under K.S.A. 75-
6801, and amendments thereto; and ``institution'' means Topeka state hospital or Winfield
state hospital and training center.

      (b) No individual shall, while a legislator or within one year after the expiration of a
term as legislator, be interested pecuniarily, either directly or indirectly, in any contract
with the state, which contract is funded in whole or in part by any appropriation or is
authorized by any law passed during such term, except that the prohibition of this subsection
(b) shall not apply to any contract interest in relation to which a disclosure statement is filed
as provided by K.S.A. 46-239, and amendments thereto.

      (c) No individual, while a legislator or within one year after the expiration of a term as
a legislator, shall represent any person in a court proceeding attacking any legislative action
taken or enactment made during any term such individual served as a legislator as being
unconstitutional because of error in the legislative process with respect to such action or
enactment unless such legislator voted no upon the enactment of the measure and declared
on the record, during such term, that such legislation was unconstitutional. The prohibition
of this subsection (c) shall not apply to a current or former legislator charged with a violation
of such legislative action or enactment.

      (d) Subsections (a) and (b) shall not apply to the following:

      (1) Contracts let after competitive bidding has been advertised for by published notice;
and

      (2) Contracts for property or services for which the price or rate is fixed by law.

      (e) When used in this section:

      (1) ``Substantial interest'' shall have the same meaning ascribed thereto by K.S.A. 46-
229, and amendments thereto, and any such interest held within the preceding 12 months
of the act or event of participating in the preparation of making a contract.

      (2) ``Substantially involved in the preparation or participate in the making of a contract''
means having approved or disapproved a contract or having provided significant factual or
specific information or advice or recommendations in relation to the negotiated terms of
the contract.'';

      Sec.  9. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4914 is hereby amended to
read as follows: 74-4914. (1) The normal retirement date for a member of the system shall
be the first day of the month coinciding with or following termination of employment with
any participating employer not followed by employment with any participating employer
within 30 days and the attainment of age 65 or, commencing July 1, 1993, age 62 with the
completion of 10 years of credited service or the first day of the month coinciding with or
following the date that the total of the number of years of credited service and the number
of years of attained age of the member is equal to or more than 85. In no event shall a
normal retirement date for a member be before six months after the entry date of the
participating employer by whom such member is employed. A member may retire on the
normal retirement date or on the first day of any month thereafter upon the filing with the
office of the retirement system of an application in such form and manner as the board shall
prescribe. Nothing herein shall prevent any person, member or retirant from being
employed, appointed or elected as an employee, appointee, officer or member of the
legislature. Elected officers may retire from the system on any date on or after the
attainment of the normal retirement date, but no retirement benefits payable under this act
shall be paid until the member has terminated such member's office.

      (2) No retirant shall make contributions to the system or receive service credit for any
service after the date of retirement.

      (3) Any member who is an employee of an affiliating employer pursuant to K.S.A. 74-
4954b and amendments thereto and has not withdrawn such member's accumulated
contributions from the Kansas police and firemen's retirement system may retire before
such member's normal retirement date on the first day of any month coinciding with or
following the attainment of age 55.

      (4) Any member may retire before such member's normal retirement date on the first
day of any month coinciding with or following termination of employment with any
participating employer not followed by employment with any participating employer within
30 days and the attainment of age 55 with the completion of 10 years of credited service,
but in no event before six months after the entry date, upon the filing with the office of the
retirement system of an application for retirement in such form and manner as the board
shall prescribe.

      (5) If a retirant who retired on or after July 1, 1988, is employed or appointed in or to
any position or office for which compensation for service is paid in an amount equal to
$15,000 or more in any one such calendar year, by any participating employer for which
such retirant was employed or appointed during the final two years of such retirant's
participation, such retirant shall not receive any retirement benefit for any month for which
such retirant serves in such position or office. The participating employer shall report to the
system within 30 days of when the compensation paid to the retirant is equal to or exceeds
any limitation provided by this section. Any retirant employed by a participating employer
shall not make contributions nor receive additional credit under such system for such service
except as provided by this section. Upon request of the executive secretary of the system,
the secretary of revenue shall provide such information as may be needed by the executive
secretary to carry out the provisions of this act. The provisions of this subsection shall not
apply to retirants employed as substitute teachers or officers, employees, or appointees or
members of the legislature or any other elected officials. The provisions of this subsection
shall not apply to members of the legislature prior to January 8, 2000. The provisions of this
subsection shall not apply to any other elected officials prior to the term of office of such
elected official which commences on or after July 1, 2000. The provisions of this subsection
shall apply to any other elected official on and after the term of office of such other elected
official which commences on or after July 1, 2000. Except as otherwise provided, commencing
January 8, 2001, the provisions of this subsection shall apply to members of the legislature.
For determination of the amount of compensation paid pursuant to this subsection, for
members of the legislature, compensation shall include any amount paid as provided
pursuant to subsections (a), (b), (c) and (d) of K.S.A. 46-137a, and amendments thereto, or
pursuant to K.S.A. 46-137b, and amendments thereto. Notwithstanding any provision of law
to the contrary, when a member of the legislature is paid an amount of compensation of
$15,000 or more in any one calendar year, the member may continue to receive any amount
provided in subsections (b) and (d) of K.S.A. 46-137a, and amendments thereto, and still be
entitled to receive such member's retirement benefit.

      (6) For purposes of this section, any employee of a local governmental unit which has
its own pension plan who becomes an employee of a participating employer as a result of a
merger or consolidation of services provided by local governmental units, which occurred
on January 1, 1994, may count service with such local governmental unit in determining
whether such employee has met the years of credited service requirements contained in
this section.;

      Sec.  10. On and after July 1, 2000, K.S.A. 74-4914c is hereby amended to read as
follows: 74-4914c. (1) Notwithstanding the provisions of K.S.A. 74-4914, 74-4915 and
subsection (23) of K.S.A. 74-4902, and amendments thereto, the normal retirement date
for all security officers, as defined by paragraph (a) or (b) of subsection (1) of K.S.A. 74-
4914a and amendments thereto, with at least three consecutive years of service as such
security officer immediately preceding the date of retirement, shall be the first day of the
month coinciding with or following the attainment of age 55 and, and commencing July 1,
2000, the first day of the month coinciding with or following the date that the total of the
number of years of credited service and the number of years of attained age of the security
officer is equal to or more than 85. Any such security officer may retire before such normal
retirement date on the first day of any month coinciding with or following the attainment
of age 50 or completion of 10 years of credited service, whichever occurs later.

      (2)  (a) Except as otherwise provided in paragraph (b) of this subsection (2), any security
officer, as defined by paragraph (a) or (b) of subsection (1) of K.S.A. 74-4914a and
amendments thereto, who retires before the normal retirement date shall receive an annual
retirement benefit equal to the annual retirement benefit payable had such security officer
retired on the normal retirement date but based upon such security officer's final average
salary and years of participating and prior service credited to the date of actual retirement
reduced by an amount equal to the product of (i) such annual retirement benefit payable
had such security officer retired on the normal retirement date, multiplied by (ii) the product
of .6% multiplied by the number of months difference, to the nearest whole month, between
such security officer's attained age at the time of retirement and age 55.

      (b) Any security officer, as defined by paragraph (a) or (b) of subsection (1) of K.S.A.
74-4914a and amendments thereto, who retires on or after July 1, 1982, and prior to July
1, 1987, before the normal retirement date shall receive an annual retirement benefit equal
to the annual retirement benefit payable had such security officer retired on the normal
retirement date but based upon such security officer's final average salary and years of
participating and prior service credited to the date of actual retirement reduced by an
amount equal to the product of (i) such annual retirement benefit payable had such security
officer retired on the normal retirement date, multiplied by (ii) the product of .3% multiplied
by the number of months difference, to the nearest whole month, between such security
officer's attained age at the time of retirement and age 55.

      (c) Any security officer, as defined by paragraph (a) or (b) of subsection (1) of K.S.A.
74-4914a and amendments thereto, who retires on or after July 1, 1990, before the normal
retirement date shall receive an annual retirement benefit equal to the annual retirement
benefit payable had such security officer retired on the normal retirement date but based
upon such security officer's final average salary and years of participating and prior service
credited to the date of actual retirement reduced by an amount equal to the product of (i)
such annual retirement benefit payable had such security officer retired on the normal
retirement date, multiplied by (ii) the product of .2% multiplied by the number of months
difference, to the nearest whole month, between such security officer's attained age at the
time of retirement and age 55.

      (3) Notwithstanding the provisions of K.S.A. 74-4914, 74-4915 and subsection (23) of
K.S.A. 74-4902, the normal retirement date for all security officers, as defined by paragraph
(c), (d), (e) or (f) of subsection (1) of K.S.A. 74-4914a and amendments thereto, with at
least three consecutive years of service as such security officer immediately preceding the
date of retirement, shall be the first day of the month coinciding with or following the
attainment of age 60 and, and commencing July 1, 2000, the first day of the month coinciding
with or following the date that the total of the number of years of credited service and the
number of years of attained age of the security officer is equal to or more than 85. Any such
security officer may retire before such normal retirement date on the first day of any month
coinciding with or following the attainment of age 55 or completion of 10 years of credited
service, whichever occurs later.

      (4) (a) Except as otherwise provided in paragraph (b) of this subsection (4), any security
officer, as defined by paragraph (c), (d), (e) or (f) of subsection (1) of K.S.A. 74-4914a and
amendments thereto, who retires before the normal retirement date shall receive an annual
retirement benefit equal to the annual retirement benefit payable had such security officer
retired on the normal retirement date but based upon such security officer's final average
salary and years of participating and prior service credited to the date of actual retirement
reduced by an amount equal to the product of (i) such annual retirement benefit payable
had such security officer retired on the normal retirement date, multiplied by (ii) the product
of .6% multiplied by the number of months difference, to the nearest whole month, between
such security officer's attained age at the time of retirement and age 60.

      (b) Any security officer, as defined by paragraph (c), (d), (e) or (f) of subsection (1) of
K.S.A. 74-4914a and amendments thereto, who retires on or after July 1, 1982, and prior
to July 1, 1987, before the normal retirement date shall receive an annual retirement benefit
equal to the annual retirement benefit payable had such security officer retired on the
normal retirement date but based upon such security officer's final average salary and years
of participating and prior service credited to the date of actual retirement reduced by an
amount equal to the product of (i) such annual retirement benefit payable had such security
officer retired on the normal retirement date, multiplied by (ii) the product of .3% multiplied
by the number of months difference, to the nearest whole month, between such security
officer's attained age at the time of retirement and age 60.

      (c) Any security officer, as defined by paragraph (c), (d), (e) or (f) of subsection (1) of
K.S.A. 74-4914a and amendments thereto, who retires on or after July 1, 1990, before the
normal retirement date shall receive an annual retirement benefit equal to the annual
retirement benefit payable had such security officer retired on the normal retirement date
but based upon such security officer's final average salary and years of participating and
prior service credited to the date of actual retirement reduced by an amount equal to the
product of (i) such annual retirement benefit payable had such security officer retired on
the normal retirement date, multiplied by (ii) the product of .2% multiplied by the number
of months difference, to the nearest whole month, between such security officer's attained
age at the time of retirement and age 60.``;

      And by renumbering sections accordingly;

      Also on page 10, in line 10 before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 12, by striking all in lines 34 through 43;

      On page 13, by striking all in lines 1 through 5;

      On page 14, in line 11, before ``K.S.A.'' by inserting ``On and after July 1, 2000,''; in line
43, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 15, by striking all in lines 35 through 43;

      By striking all on pages 16 through 18;

      On page 19, by striking all in lines 1 through 32;

      And by renumbering sections accordingly;

      Also on page 19, in line 33, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 27, in line 9, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 28, by striking all in lines 22 through 43;

      By striking all on pages 29 through 33;

      On page 34, by striking all in lines 1 and 2 and by inserting the following;

      ``Sec.  16. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4927, as amended by section
5 of 2000 House Bill No. 2034, is hereby amended to read as follows: 74-4927. (1) The
board may establish a plan of death and long-term disability benefits to be paid to the
members of the retirement system as provided by this section. The long-term disability
benefit shall not be payable until the member has been prevented from carrying out each
and every duty pertaining to the member's employment as a result of sickness or injury for
a period of 180 days and the annual benefit shall not exceed an amount equal to 66 2/3% of
the member's annual rate of compensation on the date such disability commenced and shall
be payable in equal monthly installments. In the event that a member's compensation is not
fixed at an annual rate but on an hourly, weekly, biweekly, monthly or any other basis than
annual, the board shall prescribe by rule and regulation a formula for establishing a
reasonable rate of annual compensation to be used in determining the amount of the death
or long-term disability benefit for such member. Such plan shall provide that:

      (A) For deaths occurring prior to January 1, 1987, the right to receive such death benefit
shall cease upon the member's attainment of age 70 or date of retirement whichever first
occurs. The right to receive such long-term disability benefit shall cease (i) for a member
who becomes eligible for such benefit before attaining age 60, upon the date that such
member attains age 65 or the date of such member's retirement, whichever first occurs, (ii)
for a member who becomes eligible for such benefit at or after attaining age 60, the date
that such member has received such benefit for a period of five years, upon the date that
such member attains age 70, or upon the date of such member's retirement, whichever first
occurs, (iii) for all disabilities incurred on or after January 1, 1987, for a member who
becomes eligible for such benefit at or after attaining age 70, the date that such member
has received such benefit for a period of 12 months or upon the date of such member's
retirement, whichever first occurs, and (iv) for all disabilities incurred on or after January
1, 1987, for a member who becomes eligible for such benefit at or after attaining age 75,
the date that such member has received such benefit for a period of six months or upon
the date of such member's retirement, whichever first occurs.

      (B) Long-term disability benefit payments shall be in lieu of any accidental total
disability benefit that a member may be eligible to receive under subsection (3) of K.S.A.
74-4916 and amendments thereto. The member must make an initial application for social
security disability benefits and, if denied such benefits, the member must pursue and exhaust
all administrative remedies of the social security administration which include, but are not
limited to, reconsideration and hearings. Such plan may provide that any amount which a
member receives as a social security benefit or a disability benefit or compensation from
any source by reason of any employment including, but not limited to, workers compensation
benefits may be deducted from the amount of long-term disability benefit payments under
such plan. During the period in which such member is pursuing such administrative
remedies prior to a final decision of the social security administration, social security
disability benefits may be estimated and may be deducted from the amount of long-term
disability benefit payments under such plan. Such long-term disability payments shall accrue
from the later of the 181st day of total disability or the first day upon which the member
ceases to draw compensation from the employer. If the social security benefit, workers
compensation benefit, other income or wages or other disability benefit by reason of
employment, or any part thereof, is paid in a lump-sum, the amount of the reduction shall
be calculated on a monthly basis over the period of time for which the lump-sum is given.
In no case shall a member who is entitled to receive long-term disability benefits receive
less than $50 per month. As used in this section, ``workers compensation benefits'' means
the total award of disability benefit payments under the workers compensation act
notwithstanding any payment of attorney fees from such benefits as provided in the workers
compensation act.

      (C) The plan may include other provisions relating to qualifications for benefits;
schedules and graduation of benefits; limitations of eligibility for benefits by reason of
termination of employment or membership; conversion privileges; limitations of eligibility
for benefits by reason of leaves of absence, military service or other interruptions in service;
limitations on the condition of long-term disability benefit payment by reason of improved
health; requirements for medical examinations or reports; or any other reasonable provisions
as established by rule and regulation of uniform application adopted by the board.

      (D) On and after April 30, 1981, the board may provide under the plan for the
continuation of long-term disability benefit payments to any former member who forfeits
the entitlement to continued service credit under the retirement system or continued
assistance in the purchase of retirement annuities under K.S.A. 74-4925 and amendments
thereto and to continued long-term disability benefit payments and continued death benefit
coverage, by reason of the member's withdrawal of contributions from the retirement system
or the repurchase of retirement annuities which were purchased with assistance received
under K.S.A. 74-4925 and amendments thereto. Such long-term disability benefit payments
may be continued until such individual dies, attains age 65 or is no longer disabled,
whichever occurs first.

      (E) Any visually impaired person who is in training at and employed by a sheltered
workshop for the blind operated by the secretary of social and rehabilitation services and
who would otherwise be eligible for the long-term disability benefit as described in this
section shall not be eligible to receive such benefit due to visual impairment as such
impairment shall be determined to be a preexisting condition.

      (2)  (A) In the event that a member becomes eligible for a long-term disability benefit
under the plan authorized by this section such member shall be given participating service
credit for the entire period of such disability. Such member's final average salary shall be
computed in accordance with subsection (17) of K.S.A. 74-4902 and amendments thereto
except that the years of participating service used in such computation shall be the years of
salaried participating service.

      (B) In the event that a member eligible for a long-term disability benefit under the plan
authorized by this section shall be disabled for a period of five years or more immediately
preceding retirement, such member's final average salary shall be adjusted upon retirement
by the actuarial salary assumption rates in existence during such period of disability.
Effective July 1, 1993, such member's final average salary shall be adjusted upon retirement
by 5% for each year of disability after July 1, 1993, but before July 1, 1998. Effective July
1, 1998, such member's final average salary shall be adjusted upon retirement by an amount
equal to the lesser of: (i) The percentage increase in the consumer price index for all urban
consumers as published by the bureau of labor statistics of the United States department
of labor minus 1%; or (ii) four percent per annum, measured from the month the disability
occurs the member's last day on the payroll to the month that is two months prior to the
month of retirement, for each year of disability after July 1, 1998.

      (C) In the event that a member eligible for a long-term disability benefit under the plan
authorized by this section shall be disabled for a period of five years or more immediately
preceding death, such member's current annual rate shall be adjusted by the actuarial salary
assumption rates in existence during such period of disability. Effective July 1, 1993, such
member's current annual rate shall be adjusted upon death by 5% for each year of disability
after July 1, 1993, but before July 1, 1998. Effective July 1, 1998, such member's current
annual rate shall be adjusted upon death by an amount equal to the lesser of: (i) The
percentage increase in the consumer price index for all urban consumers published by the
bureau of labor statistics of the United States department of labor minus 1%; or (ii) four
percent per annum, measured from the month the disability occurs the member's last day
on the payroll to the month that is two months prior to the month of death, for each year
of disability after July 1, 1998.

      (3)  (A) To carry out the legislative intent to provide, within the funds made available
therefor, the broadest possible coverage for members who are in active employment or
involuntarily absent from such active employment, the plan of death and long-term disability
benefits shall be subject to adjustment from time to time by the board within the limitations
of this section. The plan may include terms and provisions which are consistent with the
terms and provisions of group life and long-term disability policies usually issued to those
employers who employ a large number of employees. The board shall have the authority to
establish and adjust from time to time the procedures for financing and administering the
plan of death and long-term disability benefits authorized by this section. Either the insured
death benefit or the insured disability benefit or both such benefits may be financed directly
by the system or by one or more insurance companies authorized and licensed to transact
group life and group accident and health insurance in this state.

      (B) The board may contract with one or more insurance companies, which are
authorized and licensed to transact group life and group accident and health insurance in
Kansas, to underwrite or to administer or to both underwrite and administer either the
insured death benefit or the long-term disability benefit or both such benefits. Each such
contract with an insurance company under this subsection shall be entered into on the basis
of competitive bids solicited and administered by the board. Such competitive bids shall be
based on specifications prepared by the board.

      (i) In the event the board purchases one or more policies of group insurance from such
company or companies to provide either the insured death benefit or the long-term disability
benefit or both such benefits, the board shall have the authority to subsequently cancel one
or more of such policies and, notwithstanding any other provision of law, to release each
company which issued any such canceled policy from any liability for future benefits under
any such policy and to have the reserves established by such company under any such
canceled policy returned to the system for deposit in the group insurance reserve of the
fund.

      (ii) In addition, the board shall have the authority to cancel any policy or policies of
group life and long-term disability insurance in existence on the effective date of this act
and, notwithstanding any other provision of law, to release each company which issued any
such canceled policy from any liability for future benefits under any such policy and to have
the reserves established by such company under any such canceled policy returned to the
system for deposit in the group insurance reserve of the fund. Notwithstanding any other
provision of law, no premium tax shall be due or payable by any such company or companies
on any such policy or policies purchased by the board nor shall any brokerage fees or
commissions be paid thereon.

      (4)  (A) There is hereby created in the state treasury the group insurance reserve fund.
Investment income of the fund shall be added or credited to the fund as provided by law.
The cost of the plan of death and long-term disability benefits shall be paid from the group
insurance reserve fund, which shall be administered by the board. Except as otherwise
provided by this subsection, each participating employer shall appropriate and pay to the
system in such manner as the board shall prescribe in addition to the employee and employer
retirement contributions an amount equal to .6% of the amount of compensation on which
the members' contributions to the Kansas public employees retirement system are based
for deposit in the group insurance reserve fund. Notwithstanding the provisions of this
subsection, no participating employer shall appropriate and pay to the system any amount
provided for by this subsection for deposit in the group insurance reserve fund for the period
commencing on April 1, 2000, and ending on June 30, 2001.

      (B) The director of the budget and the governor shall include in the budget and in the
budget request for appropriations for personal services a sum to pay the state's contribution
to the group insurance reserve fund as provided by this section and shall present the same
to the legislature for allowances and appropriation.

      (C) The provisions of subsection (4) of K.S.A. 74-4920 and amendments thereto shall
apply for the purpose of providing the funds to make the contributions to be deposited to
the group insurance reserve fund.

      (D) Any dividend or retrospective rate credit allowed by an insurance company or
companies shall be credited to the group insurance reserve fund and the board may take
such amounts into consideration in determining the amounts of the benefits under the plan
authorized by this section.

      (5) The death benefit provided under the plan of death and long-term disability benefits
authorized by this section shall be known and referred to as insured death benefit. The
long-term disability benefit provided under the plan of death and long-term disability
benefits authorized by this section shall be known and referred to as long-term disability
benefit.

      (6) The board is hereby authorized to establish an optional death benefit plan. Except
as provided in subsection (7), such optional death benefit plan shall be made available to
all employees who are covered or may hereafter become covered by the plan of death and
long-term disability benefits authorized by this section. The cost of the optional death benefit
plan shall be paid by the applicant either by means of a system of payroll deductions or
direct payment to the board. The board shall have the authority and discretion to establish
such terms, conditions, specifications and coverages as it may deem to be in the best interest
of the state of Kansas and its employees which should include term death benefits for the
person's period of active state employment regardless of age, but in no case, on and after
January 1, 1989, shall the maximum allowable coverage be less than $200,000. The cost of
the optional death benefit plan shall not be established on such a basis as to unreasonably
discriminate against any particular age group. The board shall have full administrative
responsibility, discretion and authority to establish and continue such optional death benefit
plan and the director of accounts and reports of the department of administration shall when
requested by the board and from funds appropriated or available for such purpose establish
a system to make periodic deductions from state payrolls to cover the cost of the optional
death benefit plan coverage under the provisions of this subsection (6) and shall remit all
deductions together with appropriate accounting reports to the system. There is hereby
created in the state treasury the optional death benefit plan reserve fund. Investment income
of the fund shall be added or credited to the fund as provided by law. All funds received by
the board, whether in the form of direct payments, payroll deductions or otherwise, shall
be accounted for separately from all other funds of the retirement system and shall be paid
into the optional death benefit plan reserve fund, from which the board is authorized to
make the appropriate payments and to pay the ongoing costs of administration of such
optional death benefit plan as may be incurred in carrying out the provisions of this
subsection (6).

      (7) Any employer other than the state of Kansas which is currently a participating
employer of the Kansas public employees retirement system or is in the process of affiliating
with the Kansas public employees retirement system may also elect to affiliate for the
purposes of subsection (6). All such employers shall make application for affiliation with
such system, to be effective on January 1 next following application. Such optional death
benefit plan shall not be available for employees of employers specified under this subsection
until after July 1, 1988.''

      Also on page 34, in line 3, before ``K.S.A.'' by inserting ``On and after July 1, 2000,''; in
line 35, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 35, in line 8, by striking ``25'' and inserting ``36'';

      On page 36, in line 20, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';in line
34, by striking ``25'' and inserting ``36'';

      On page 38, in line 8, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 39, in line 18, by striking ``25'' and inserting ``36'';

      On page 40, in line 28, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 41, in lines 25, 31 and 40, by striking ``Pursuant to the provisions of section 25,
and amendments thereto,''; in lines 26, 32 and 41, by striking ``in'' and inserting ``In'';

      On page 43, in line 17, by striking ``25'' and inserting ``36'';

      On page 45, in line 28, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 46, in line 3, by striking ``25'' and inserting ``36'';

      On page 48, in line 26, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 51, by striking all in lines 24 through 38;

      On page 52, in line 39, before ``K.S.A.'' by inserting ``On and after July 1, 2000,'';

      On page 55, by striking all in lines 38 through 43;

      On page 56, by striking all in lines 1 through 9;

      On page 57, in line 12, before ``K.S.A.'' by inserting ``On and after July 1, 2000,''; in line
14, by striking ``25'' and inserting ``36''; after line 28, by inserting the following:

      ``Sec.  26. On and after July 1, 2000, K.S.A. 75-2929d is hereby amended to read as
follows: 75-2929d. (a) The state civil service board shall hear appeals taken to it pursuant
to: (1) K.S.A. 75-2940, 75-2949 and 75-3747, and amendments thereto, concerning
demotion, dismissal or suspension of a permanent employee in the classified service, or
concerning refusal to examine an applicant or to certify a person as eligible for a job class,
and (2) K.S.A. 75-2973, and amendments thereto, concerning disciplinary action in violation
of that statute.

      (b) When an appeal is taken to the board, the board shall establish a time and a place
for the hearing which shall be held within 45 days after receipt of request for the appeal.
The board shall notify the person bringing the appeal and the appointing authority or other
person whose action is being reviewed of the time and the place of the hearing at least 14
days prior to such hearing. Each party at the hearing shall have the right to be represented
by a person of the party's own choice. Hearings shall be conducted in accordance with the
provisions of the Kansas administrative procedure act. For purposes of the administrative
procedure act, the state civil service board shall be deemed the agency head. The board
may affirm, modify or reverse an agency action and order any other action it deems
appropriate.

      (c) The board, or the director of personnel services when authorized by majority vote
of the board, may take deposition of depose witnesses. Either party to a hearing may depose
witnesses in accordance with the Kansas administrative procedure act. If books and papers
are required to be produced in advance of a hearing date, the person or agency producing
the books and papers shall be entitled to receive reasonable compensation to recover all
costs of such production from the person or agency for which they are produced. The board,
any presiding officer or the director may examine such public records as may be required
in relation to any matter which the board has authority to investigate.

      (d) Each person not in the classified or unclassified service who appears before the
board or the director by order shall receive for such person's attendance the fees and mileage
provided for witnesses in civil actions in the district court, which. Such fees and mileage
shall be audited and paid by the state upon presentation of proper vouchers. Each witness
subpoenaed at the request of parties other than the board or the director shall be entitled
to compensation from the state for attendance or travel only if the board certifies that the
testimony of such witness was relevant and material to the matter investigated or, if such
witness is not called to testify, the board determines and certifies that such compensation
should be paid.

      Sec.  27. On and after July 1, 2000, K.S.A. 75-2949 is hereby amended to read as follows:
75-2949. (a) An appointing authority may dismiss or demote any permanent employee in
the classified service when the appointing authority considers that the good of the service
will be served thereby and. For disciplinary purposes, an appointing authority may suspend
without pay a permanent classified employee for a period not to exceed 30 calendar days,
but. No permanent employee in the classified service shall be dismissed, demoted or
suspended for political, religious, racial or other nonmerit reasons.

      (b) Prior to dismissal, demotion or suspension of a permanent employee in the classified
service, the appointing authority shall furnish the employee by certified mail to the
employee's last known address, return receipt requested, or by personal delivery, a statement
in writing specifically setting forth the reasons and factual basis therefor. A copy of such
statement shall be furnished immediately to the director. This statement shall contain notice
of the proposed dismissal, demotion or suspension and shall specify the proposed effective
date thereof. Except as otherwise provided in the Kansas civil service act, a proposed
suspension, demotion or dismissal shall become effective no less than three calendar days
nor more than 14 calendar days following the date the notice of such proposed suspension,
demotion or dismissal is personally delivered to the employee or deposited with the post
office as certified mail. If in the opinion of the appointing authority conditions warrant, the
appointing authority may relieve the employee of duties or change the duties of the
employee during such period. If the employee is relieved from duty during such period, the
employee may be continued in pay status, or placed on leave of absence without pay by the
appointing authority. In the statement proposing suspension, demotion or dismissal, the
appointing authority shall offer the employee who is proposed to be suspended, demoted
or dismissed an opportunity to reply in writing, or appear in person, or both, before the
appointing authority or a designated representative of the appointing authority, on the issue
of the proposed suspension, demotion or dismissal prior to the time such suspension,
demotion or dismissal is specified by the notice to become effective. The statement shall
specify the date, time and place by, or at which, the employee may reply in writing or
appear, or both. If the employee chooses to appear in person on the issue of the proposed
action, the employee may be represented by a person of the employee's choice.

      (c) Upon request by the employee, or upon the initiative of the appointing authority,
the appointing authority may extend the time for reply or appearance, or both, if the
circumstances warrant. Notice of any such extension shall be furnished to the employee and
to the director of personnel services. The proposed suspension, demotion or dismissal shall
not become effective until after the extended period has expired.

      (d) Following the employee's response to the opportunity to reply to the proposed
action, or upon expiration of the time for such reply, if no reply is made, the appointing
authority, or the designee of the appointing authority, shall notify the employee of the final
decision on the proposed action. Such notice shall be in writing and shall be sent by certified
mail to the employee's last known address or personally delivered to the employee on or
before the effective date of the proposed action. A copy of the notice shall be furnished
immediately to the director of personnel services. This final notice of decision by the
appointing authority or the designee of the appointing authority, to suspend, demote or
dismiss the employee shall inform the employee of the employee's right to appeal the
decision to the state civil service board within 30 calendar days after the effective date of
the action.

      (e) At any time prior to the effective date of the proposed suspension, demotion or
dismissal or, if an appeal is taken to the state civil service board, at any time prior to the
final decision of the board, the appointing authority, or the designee of the appointing
authority, may withdraw or modify the action proposed to be taken or taken against the
employee. Notice of any such withdrawal or modification shall be given in writing to the
employee by certified mail to the employee's last known address or by personal delivery. A
copy of the notice shall be furnished immediately to the director of personnel services.

      (f) Any permanent employee finally dismissed, demoted or suspended, may request a
hearing from the state civil service board to determine the reasonableness of such action.
Each such request for a hearing shall be in writing and shall be submitted to the director
of personnel services filed in the office of the director of personnel services within 30 calendar
days after the effective date of the dismissal, demotion or suspension. Additional days shall
not be added to the thirty-day period in which an appeal may be filed if the notice of the
effective date of the dismissal, demotion or suspension is mailed to the employee. The board
shall grant the employee a hearing in accordance with the provisions of the Kansas
administrative procedure act within 45 calendar days after receipt of such request. At the
hearing the burden of proof shall be upon the employee to establish that the appointing
authority did not act reasonably in taking such action.

      (g) No employee shall be disciplined or discriminated against in any way because of the
employee's proper use of the appeal procedure.

      (h) A permanent employee who is demoted pursuant to this section need not meet the
qualifications for the class of positions to which demoted if the appointing authority
determines that the employee can reasonably be expected to perform satisfactorily the duties
of the position to which the employee is demoted. A permanent employee who is demoted
pursuant to this section shall have permanent status in the class to which demotion is made,
effective on the date of the demotion.

      (i) In case of a situation in which the possibility of proposing dismissal, suspension or
demotion of a permanent employee is indicated, but where the appointing authority needs
time to conduct an investigation before proposing such action, or in a situation where
immediate removal of an employee from such employee's job is needed to avoid disruption
of work, or for the protection of persons or property, or for a similar reason, the appointing
authority may relieve the employee of duties or change the duties of the employee for a
limited period and keep the employee in pay status. The secretary of administration shall
provide by rules and regulations, adopted pursuant to K.S.A. 75-3706, and amendments
thereto, procedures to be followed in such cases.

      Sec.  28. K.S.A. 75-4370 is hereby amended to read as follows: 75-4370. (a) In
establishing certified pools of eligible candidates under the Kansas civil service act, a
preference shall be given to each state officer or employee (1) who (1)(A) is in the classified
service under the Kansas civil service act and is employed by an institution that is closed or
abolished or otherwise ceases operations or that is scheduled for such closure, abolition or
cessation of operations and has a budget reduction imposed that is associated with such
closure, abolition or cessation of operations, and (2) who (B) is laid off from employment
with such institution for the reason of such closure, abolition or cessation of operations or
such imposition of a budget reduction, and (3) who (C) remains in such employment until
the date the officer or employee is laid off or (2) (A) is in the classified service under the
Kansas civil service act and is laid off from employment at the Topeka correctional facility
due to the transfer of the reception and diagnostic unit from the Topeka correctional facility
to the El Dorado correctional facility, and (B) remains in such employment until the date
the officer or employee is laid off.

      (b) To qualify for the preference established by this section, a person described in
subsection (a) also shall meet the requirements for the vacant position. In addition to other
applicable provisions of the Kansas civil service act and rules and regulations and policies
adopted thereunder, the preference established by this section (1) shall place the person
into the reemployment pool, (2) shall provide an opportunity for an interview for any vacant
position in the same or higher pay grade than the position from which the person was laid
off and for which the person meets the qualifications, and (3) shall grant a right of first
refusal for any vacant position. No state agency shall be required to interview more than
seven applicants for any one position. The right of first refusal shall allow the person the
right to accept the first position applied for by the person for which the person meets the
qualifications and for which the pay grade is the same as or lower than the pay grade of the
position from which the person was laid off. The right of first refusal may be exercised only
one time and must be exercised within the 24 months following the date of layoff.

      (c) The secretary of administration shall give a global notice of layoff to all state officers
and employees, who are employed by an institution that is scheduled for closure, abolition
or cessation of operations, up to 180 days prior to such closure, abolition or cessation of
operations. The global notice of layoff shall be effective for all such state officers and
employees, including any state officer or employee who is transferred to or employed by
such institution within 180 days of the date of such closure, abolition or cessation of
operations, for all purposes of lay off procedures under K.S.A. 75-2948 and amendments
thereto, except each such officer or employee receiving the global notice of layoff shall also
be given an individual notice of layoff which specifies such officer or employee's individual
date of layoff.

      (d) Notice of layoff pursuant to K.S.A. 75-2948 and amendments thereto, shall be given
to state officers and employees whose proposed layoff is caused by the transfer of the
reception and diagnostic unit from the Topeka correctional facility to the El Dorado
correctional facility.

      (d) (e) The secretary of administration shall adopt rules and regulations necessary to
implement the provisions of this section.

      (e) (f) This section shall be part of and supplemental to the Kansas civil service act.

      Sec.  29. K.S.A. 75-4371 is hereby amended to read as follows: 75-4371. (a) Each state
officer or employee (1) who (1)(A) is employed by an institution that is closed or abolished
or otherwise ceases operations or that is scheduled for such closure, abolition or cessation
of operations and has a budget reduction imposed that is associated with such closure,
abolition or cessation of operations, and (2) who (B) is laid off from employment with such
institution for the reason of such closure, abolition or cessation of operations or such
imposition of a budget reduction, and (3) who (C) remains in such employment until the
date the officer or employee is laid off; or (2)(A) is in the classified service under the Kansas
civil service act and is laid off from employment at the Topeka correctional facility due to
the transfer of the reception and diagnostic unit from the Topeka correctional facility to the
El Dorado correctional facility, and (B) remains in such employment until the date the officer
or employee is laid off, may receive compensation for 20% of all accumulated hours of sick
leave credited to such state officer or employee as of the date of being laid off. Each state
officer or employee, who is eligible for and who elects to receive compensation for
accumulated sick leave under this section, shall file a written statement of election therefor
which shall be in such form as may be prescribed by the secretary of administration and
which shall include a specific waiver of any right to receive any payment for accumulated
sick leave under the provisions of K.S.A. 75-5517 and amendments thereto. No state officer
or employee, who receives compensation for accumulated sick leave under this section, shall
receive any payment for accumulated sick leave under the provisions of K.S.A. 75-5517 and
amendments thereto. Payment for accumulated sick leave under this section shall be made
from the state leave payment reserve fund.

      (b) For the purposes of retirement employee contributions and retirement benefits,
each payment of compensation for accumulated sick leave under this section shall be subject
to the applicable provisions of the statutes governing the Kansas public employees
retirement system, K.S.A. 74-4901 et seq., and amendments thereto.

      (c) The secretary of administration shall adopt rules and regulations necessary to
implement the provisions of this section.

      Sec.  30. K.S.A. 75-4372 is hereby amended to read as follows: 75-4372. (a) Each state
officer or employee (1) who (1)(A) is employed by an institution that is closed or abolished
or otherwise ceases operations or that is scheduled for such closure, abolition or cessation
of operations and has a budget reduction imposed that is associated with such closure,
abolition or cessation of operations, and (2) who (B) is laid off from employment with such
institution for the reason of such closure, abolition or cessation of operations or such
imposition of a budget reduction, and (3) who (C) remains in such employment until the
date the officer or employee is laid off; or (2)(A) who is in the classified service under the
Kansas civil service act and is laid off from employment at the Topeka correctional facility
due to the transfer of the reception and diagnostic unit from the Topeka correctional facility
to the El Dorado correctional facility, and (B) remains in such employment until the date
the officer or employee is laid off, shall continue to be qualified to participate in the state
health care benefits program as provided in this section.

      (b) In accordance with the following, each such state officer or employee may
participate in the state health care benefits program after being laid off for the following
periods:

      (1) For the six-month period after the date of such person's layoff, during which period
that portion of the cost of participation of such person which would have been paid by the
state agency if such person was still a state officer or employee shall be paid as provided in
subsection (c); and

      (2) for the eighteen-month period after such six-month period, during which period the
entire cost of participation of such person shall be paid by such person.

      (c) There is hereby established the closure health insurance fund in the state treasury
which shall be administered by the secretary of administration. In accordance with the
provisions of appropriation acts, the secretary of administration shall cause to be deposited
in the closure health insurance fund an amount equal to the full cost for six months of the
employer contribution for full-time single member health care insurance under the state
health care benefits program for each such laid off state officer and employee on the officer
or employee's last day of service. Expenditures shall be made from the closure health
insurance fund for the purpose of paying the employer's portion for full-time single member
health insurance under the state health care benefits program for each such laid off state
officer or employee until the expiration of six months or until notified by the laid off officer
or employee that such officer or employee is otherwise covered by health care insurance.
The secretary of administration shall establish a system to account for the state health
insurance expenditures for each such laid off state officer or employee. Upon notice that
the person who had been laid off is otherwise covered by health care insurance, the balance
attributed to such person shall be paid to the person who had been laid off. After such six-
month period, any participation by such person in the state health care benefits program
shall be paid by such person.

      (d) Except as otherwise provided by this section, the participation of each such state
officer or employee in the state health care benefits program shall be in accordance with
the provisions of K.S.A. 75-6501 through 75-6513 and amendments thereto and rules and
regulations and policies adopted by the Kansas state employees health care commission.
Each such state officer or employee may obtain family coverage under the state health care
benefits program administered by the Kansas state employees health care commission
generally in the same manner as other state officers and employees and shall pay the entire
cost of such family coverage.

      New Sec.  31. The secretary of social and rehabilitation services is hereby authorized
and directed to develop and administer provisions for health care benefits and related
assistance which shall be provided to each person who is a blind person who was employed
prior to the effective date of this act at Kansas industries for the blind at facilities on the
Topeka state hospital property, as defined by K.S.A. 1999 Supp. 75-37,123 and amendments
thereto, and who voluntarily terminates or retires or who is laid off from such employment
due to the closure, abolition or other cessation of operations of the Kansas industries for
the blind as a state program at such location.

      Sec.  32. K.S.A. 75-4373 is hereby amended to read as follows: 75-4373. (a) Each state
officer or employee (1) who (1)(A) is employed by an institution that is closed or abolished
or otherwise ceases operations or that is scheduled for such closure, abolition or cessation
of operations and has a budget reduction imposed that is associated with such closure,
abolition or cessation of operations, and (2) who (B) is laid off from employment with such
institution for the reason of such closure, abolition or cessation of operations or such
imposition of a budget reduction, and (3) who (C) remains in such employment until the
date the officer or employee is laid off; or (2)(A) is in the classified service under the Kansas
civil service act and who is laid off from employment at the Topeka correctional facility due
to the transfer of the reception and diagnostic unit from the Topeka correctional facility to
the El Dorado correctional facility, and (B) remains in such employment until the date of
officer or employee is laid off, shall be eligible for the extended death benefit plan providing
term life insurance under this section.

      (b) The extended death benefit plan providing term life insurance under this section
shall provide a death benefit equal to 150% of the annual rate of compensation of the
covered state officer or employee, as of the date the covered state officer or employee is
laid off, for each state officer or employee described in subsection (a). The extended death
benefit plan providing term life insurance under this section shall provide death benefit
coverage for a period of 24 months after the date the covered state officer or employee is
laid off.

      (c) The secretary of administration shall administer the provisions of this section. The
secretary of administration shall issue a request for proposals from qualified vendors for
term life insurance under this section and is hereby authorized to enter into contracts for
such term life insurance pursuant to competitive bids. Contracts entered into for such
insurance shall not be subject to the provisions of K.S.A. 75-4101 and amendments thereto.

      (d) There is hereby created in the state treasury the closure term life insurance fund
which shall be administered by the secretary of administration. All expenditures of moneys
credited to the closure term life insurance fund shall be for the provision of term life
insurance under this section in accordance with appropriation acts upon warrants of the
director of accounts and reports issued pursuant to vouchers approved by the secretary of
administration or the secretary's designee.

      Sec.  33. K.S.A. 75-4374 is hereby amended to read as follows: 75-4374. (a) The head
of any state agency, as defined by K.S.A. 75-3701, and amendments thereto, who hires any
state officer or employee who is laid off or transferred in lieu of layoff between state agencies,
may agree to reimburse such officer or employee's in-state moving expenses in an aggregate
amount of not more than $2,000, as verified by receipts. No such moving expenses shall be
paid when such transfer results in the new official duty station being less than 25 miles from
the old station.

      (b) Moving expenses may include, but not be limited to, the cost of packing and
transporting household goods and personal effects, subsistence expenses while en route from
the old residence to the new residence, subsistence expenses while occupying temporary
quarters in the new location and the expenses of a premove trip to look for a new residence.

      (c) Any state agency, as defined by K.S.A. 75-3701 and amendments thereto, which hires
any state officer or employee, who is a blind person employed at Kansas industries for the
blind at facilities on the Topeka state hospital property and who is laid off or transferred
between state agencies, in lieu of being laid off, shall purchase or otherwise provide all
adaptive equipment and other accommodations required by such state officer or employer
for such state officer or employee's position at such state agency.
      (d) As used in this section, ``state officer or employee'' means a state officer or employee
(1) who (1)(A) is employed by an institution that is closed or abolished or otherwise ceases
operations or that is scheduled for such closure, abolition or cessation of operations, and
(2) who (B) is laid off from employment with such institution for the reason of such closure,
abolition or cessation of operations, and (3) who (C) remains in such employment with such
institution until the date the officer or employee is laid off; or (2)(A) is in the classified
service under the Kansas civil service act and is laid off from employment at the Topeka
correctional facility due to the transfer of the reception and diagnostic unit from the Topeka
correctional facility to the El Dorado correctional facility, and (B) remains in such
employment until the date the officer or employee is laid off.

      Sec.  34. K.S.A. 75-4376 is hereby amended to read as follows: 75-4376. As used in
K.S.A. 75-4370 through 75-4376 and amendments thereto, except as otherwise specifically
provided in such statutes:

      (a) ``Institution'' means Topeka state hospital or, Winfield state hospital and training
center and Kansas industries for the blind of the department of social and rehabilitation
services; and

      (b) ``laid off'' means, (1) in the case of a state officer or employee in the classified service
under the Kansas civil service act, being laid off under K.S.A. 75-2948 and amendments
thereto and,; (2) in the case of a state officer or employee in the unclassified service under
the Kansas civil service act, being terminated from employment with the state agency by
the appointing authority, except that ``laid off'' shall not include any separation from
employment pursuant to a budget reduction or expenditure authority reduction and a
reduction of F.T.E. positions under K.S.A. 75-6801 and amendments thereto; and (3) in
the case of blind persons employed by Kansas industries for the blind, being terminated or
otherwise separated from employment at Kansas industries for the blind at the facilities
located on the Topeka state hospital property because Kansas industries for the blind is
closed, abolished or otherwise ceases operations as a state program at such location; and
      (c) ``Topeka state hospital property'' has the meaning ascribed thereto by K.S.A. 1999
Supp. 75-37,123 and amendments thereto.'';

      And by renumbering sections accordingly;

      On page 58, after line 5, by inserting the following:

      ``(d) The provisions of this section shall be effective on and after July 1, 2000.'';

      Also on page 58, in line 6, after ``The'' by inserting ``lump sum''; in lines 14 and 24, after
the period, by inserting ``The provisions of this section shall be effective on and after July
1, 2000.''; in line 31, after ``legislature'' by inserting ``, except that, commencing January 8,
2001, such member of the legislature shall not receive any retirement benefit for any month
for which such member of the legislature serves when compensation as provided in
subsection (e) is paid in an amount equal to $15,000 or more in any one such calendar
year''; in line 33, after ``member'' by inserting ``for service prior to service as a member of
the legislature''; after line 39, by inserting the following:

      ``(c) When such member who is a member of the legislature retires as a member of the
legislature, such member's final average salary shall be recalculated to include legislative
compensation, if such inclusion of such compensation increases such member's final average
salary, of the member up to the time of retirement from the participating employer other
than the legislature as provided in subsection (a).

      (d) No such member who is a member of the legislature shall accrue any additional
retirement benefits for the period of time between the date the member retired from the
participating employer other than the legislature and the date such member retires as a
member of the legislature.

      (e) The participating employer shall report to the system within 30 days of when the
compensation paid to the retirant is equal to or exceeds any limitation provided in subsection
(a). Upon request of the executive secretary of the system, the secretary of revenue shall
provide such information as may be needed by the executive secretary to carry out the
provisions of this section. For determination of the amount of legislative compensation, as
provided in subsection (a) and this subsection, for members of the legislature, compensation
shall include any amount paid as provided pursuant to subsections (a), (b), (c) and (d) of
K.S.A. 46-137a, and amendments thereto, or pursuant to K.S.A. 46-137b, and amendments
thereto. Notwithstanding any provision of law to the contrary, when a member of the
legislature is paid an amount of compensation of $15,000 or more in any one calendar year,
the member may continue to receive any amount provided in subsections (b) and (d) of
K.S.A. 46-137a, and amendments thereto, and still be entitled to receive such member's
retirement benefit.'';

      Also on page 58, in line 40 by striking ``(c)'' and inserting ``(f)'';

      On page 59, in line 5, by striking ``(d)'' and inserting ``(g)''; after line 8, by inserting the
following:

      ``(h) The provisions of this section shall be effective on and after July 1, 2000.'';

      Also on page 59, in line 16, after ``official'' by inserting ``, except that such local official
shall not receive any retirement benefit for any month for which such local official serves
in such office when compensation is paid in an amount equal to $15,000 or more in any
one such calendar year. The participating employer shall report to the system within 30 days
of when the compensation paid to the retirant is equal to or exceeds any limitation provided
in this subsection. Upon request of the executive secretary of the system, the secretary of
revenue shall provide such information as may be needed by the executive secretary to carry
out the provisions of this section''; in line 20, after ``official'' by inserting ''or be entitled to
any benefit provided in K.S.A. 74-4916 or 74-4927, and amendments thereto'';

      On page 60, in line 12, by striking all after the period; by striking all in lines 13 through
15 and inserting ''The provisions of this section shall be effective on and after July 1, 2000.'';
in line 38, by striking ``No''; by striking all in lines 39 through 41 and inserting ''The
provisions of this section shall be effective on and after July 1, 2000.``; after line 41, by
inserting the following:

      ``Sec.  42. K.S.A. 75-4370, 75-4371, 75-4372, 75-4373, 75-4374 and 75-4376 and K.S.A.
1999 Supp. 46-233 are hereby repealed.''

      And by renumbering sections accordingly;

      On page 61, in line 1, before ``K.S.A.'' by inserting ``On and after July 1, 2000,''; also in
line 1, by striking the first ``and'' and by inserting ``, 74-4914c,''; also in line 1, after ``74-
4927k'' by inserting ``, 75-2929d and 75-2949''; in line 2, after ``20-2625,'' by inserting ``74-
4914,''; in line 3, by striking ``74-4920,''; also in line 3, after ``74-4927,'' by inserting ``as
amended by section 5 of 2000 House Bill No. 2034,''; in line 7, by striking ``statute book''
and inserting ``Kansas register'';

      On page 1, in the title, in line 10, after ``concerning'' by inserting ``public employment,
public officers and employees; relating to''; also in line 10, by striking ``relating to''; in line
13, by striking ``employer contribution rate;''; also in line 13, before ``amending'' by inserting
``personnel disciplinary actions, policies and procedures; compensation and benefits;
procedures, benefits and property dispositions related to persons laid off to closed
institutions or transferred functions;''; in line 14, by striking ``and'' the first time it appears
and by inserting ``, 74-4914c,''; also in line 14, after ``74-4927k'' by inserting ``, 75-2929d,
75-2949, 75-4370, 75-4371, 75-4372, 75-4373, 75-4374 and 75-4376''; in line 15, after ``20-
2625,'' by inserting ``46-233, 74-4914,''; in line 16, by striking ``74-4920,''; also in line 16,
after ``74-4927,'' by inserting ``, as amended by section 5 of 2000 House Bill No. 2034,'';

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Dave Kerr

                                                                                    Alicia L. Salisbury

                                                                                    Marge Petty
 Conferees on the part of Senate
                                                                                   

                                                                                    Kenny A. Wilk

                                                                                    Deena Horst

                                                                                    Bonnie Sharp
 Conferees on part of House


   Senator Kerr moved the Senate adopt the Conference Committee Report on S Sub HB
2624.

 On roll call, the vote was: Yeas 39, Nays 1, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

 Nays: Huelskamp.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2641, submits the following report:

      The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with Senate Committee
amendments, as follows:

      On page 1, by striking all in lines 19 through 43;

      On page 2, by striking all in lines 1 through 7; following line 7, by inserting the following:

      ``New Section  1. (a) The driver of a vehicle shall not overtake and pass another vehicle
when approaching within 100 feet of a stationary authorized emergency vehicle on a highway
that consists of two lanes carrying traffic in opposite directions, when the authorized
emergency vehicle is making use of visual signals meeting the requirements of K.S.A. 8-
1720, and amendments thereto, or subsection (d) of K.S.A. 8-1722, and amendments
thereto.

      (b) From and after the effective date of this act, and prior to July 1, 2001, a law
enforcement officer shall issue a warning citation to anyone violating the provisions of
subsection (a).

      (c) This section shall be part of and supplemental to the uniform act regulating traffic
on highways.

      New Sec.  2. ``Low-speed vehicle'' means any four-wheeled electric vehicle whose top
speed is greater than 20 miles per hour but not greater than 25 miles per hour and is
manufactured in compliance with the national highway and traffic safety administration
standards for low-speed vehicles in 49 C.F.R. 571.500.

      New Sec.  3. (a) It shall be unlawful for any person to operate a low-speed vehicle on
any street or highway with a posted speed limit greater than 40 miles per hour.

      (b) The provisions of subsection (a), shall not prohibit a low-speed vehicle from crossing
a street or highway with a posted speed limit in excess of 40 miles per hour.

      (c) This section shall be a part of and supplemental to the uniform act regulating traffic
on highways.

      New Sec.  4. ``Electric-assisted bicycle'' means a bicycle with two or three wheels, a
saddle, fully operative pedals for human propulsion, and an electric motor. The electric-
assisted bicycle's electric motor must have a power output of no more than 1,000 watts, be
incapable of propelling the device at a speed of more than 20 miles per hour on level ground
and incapable of further increasing the speed of the device when human power alone is
used to propel the device beyond 20 miles per hour.

      Sec.  5. K.S.A. 1999 Supp. 8-126 is hereby amended to read as follows: 8-126. The
following words and phrases when used in this act shall have the meanings respectively
ascribed to them herein:

      (a) ``Vehicle'' means every device in, upon or by which any person or property is or may
be transported or drawn upon a public highway, excepting devices moved by human power
or used exclusively upon stationary rails or tracks.

      (b) ``Motor vehicle'' means every vehicle, other than a motorized bicycle or a motorized
wheelchair, which is self-propelled.

      (c) ``Truck'' means a motor vehicle which is used for the transportation or delivery of
freight and merchandise or more than 10 passengers.

      (d) ``Motorcycle'' means every motor vehicle designed to travel on not more than three
wheels in contact with the ground, except any such vehicle as may be included within the
term ``tractor'' as herein defined.

      (e) ``Truck tractor'' means every motor vehicle designed and used primarily for drawing
other vehicles, and not so constructed as to carry a load other than a part of the weight of
the vehicle or load so drawn.

      (f) ``Farm tractor'' means every motor vehicle designed and used as a farm implement
power unit operated with or without other attached farm implements in any manner
consistent with the structural design of such power unit.

      (g) ``Road tractor'' means every motor vehicle designed and used for drawing other
vehicles, and not so constructed as to carry any load thereon independently, or any part of
the weight of a vehicle or load so drawn.

      (h) ``Trailer'' means every vehicle without motive power designed to carry property or
passengers wholly on its own structure and to be drawn by a motor vehicle.

      (i) ``Semitrailer'' means every vehicle of the trailer type so designed and used in
conjunction with a motor vehicle that some part of its own weight and that of its own load
rests upon or is carried by another vehicle.

      (j) ``Pole trailer'' means any two-wheel vehicle used as a trailer with bolsters that support
the load, and do not have a rack or body extending to the tractor drawing the load.

      (k) ``Specially constructed vehicle'' means any vehicle which shall not have been
originally constructed under a distinctive name, make, model or type, or which, if originally
otherwise constructed shall have been materially altered by the removal of essential parts,
or by the addition or substitution of essential parts, new or used, derived from other vehicles
or makes of vehicles.

      (l) ``Foreign vehicle'' means every motor vehicle, trailer or semitrailer which shall be
brought into this state otherwise than in ordinary course of business by or through a
manufacturer or dealer and which has not been registered in this state.

      (m) ``Person'' means every natural person, firm, partnership, association or corporation.

      (n) ``Owner'' means a person who holds the legal title of a vehicle, or in the event a
vehicle is the subject of an agreement for the conditional sale thereof with the right of
purchase upon performance of the conditions stated in the agreement and with an
immediate right of possession vested in the conditional vendee or in the event a vehicle is
subject to a lease of 30 days or more with an immediate right of possession vested in the
lessee; or in the event a party having a security interest in a vehicle is entitled to possession,
then such conditional vendee or lessee or secured party shall be deemed the owner for the
purpose of this act.

      (o) ``Nonresident'' means every person who is not a resident of this state.

      (p) ``Manufacturer'' means every person engaged in the business of manufacturing
motor vehicles, trailers or semitrailers.

      (q) ``New vehicle dealer'' means every person actively engaged in the business of buying,
selling or exchanging new motor vehicles, travel trailers, trailers or vehicles and who holds
a dealer's contract therefor from a manufacturer or distributor and who has an established
place of business in this state.

      (r) ``Used vehicle dealer'' means every person actively engaged in the business of buying,
selling or exchanging used vehicles, and having an established place of business in this state
and who does not hold a dealer's contract for the sale of new motor vehicles, travel trailers,
trailers or vehicles.

      (s) ``Highway'' means every way or place of whatever nature open to the use of the
public as a matter of right for the purpose of vehicular travel. The term ``highway'' shall not
be deemed to include a roadway or driveway upon grounds owned by private owners,
colleges, universities or other institutions.

      (t) ``Department'' or ``motor vehicle department'' or ``vehicle department'' means the
division of vehicles of the department of revenue, acting directly or through its duly
authorized officers and agents.

      (u) ``Commission'' or ``state highway commission'' means the director of vehicles of the
department of revenue.

      (v) ``Division'' means the division of vehicles of the department of revenue.

      (w) ``Travel trailer'' means every vehicle without motive power designed to be towed
by a motor vehicle constructed primarily for recreational purposes and measuring eight feet
or less in width.

      (x) ``Passenger vehicle'' means every motor vehicle, as herein defined, which is designed
primarily to carry 10 or fewer passengers, and which is not used as a truck.

      (y) ``Self-propelled farm implement'' means every farm implement designed for specific
use applications with its motive power unit permanently incorporated in its structural design.

      (z) ``Farm trailer'' means every trailer as defined in subsection (h) of this section and
every semitrailer as defined in subsection (i) of this section, designed and used primarily as
a farm vehicle.

      (aa) ``Motorized bicycle'' means every device having two tandem wheels or three wheels,
which may be propelled by either human power or helper motor, or by both, and which
has:

      (1) A motor which produces not more than 3.5 brake horsepower;

      (2) a cylinder capacity of not more than 50 130 cubic centimeters;

      (3) an automatic transmission; and

      (4) the capability of a maximum design speed of no more than 30 miles per hour.

      (bb) ``All-terrain vehicle'' means any motorized nonhighway vehicle 45 inches or less in
width, having a dry weight of 650 pounds or less, traveling on three or more low-pressure
tires, having a seat designed to be straddled by the operator. As used in this subsection, low-
pressure tire means any pneumatic tire six inches or more in width, designed for use on
wheels with rim diameter of 12 inches or less, and utilizing an operating pressure of 10
pounds per square inch or less as recommended by the vehicle manufacturer.

      (cc) ``Implement of husbandry'' means every vehicle designed or adapted and used
exclusively for agricultural operations, including feedlots, and only incidentally moved or
operated upon the highways. Such term shall include, but not be limited to:

      (1) A farm tractor;

      (2) a self-propelled farm implement;

      (3) a fertilizer spreader, nurse tank or truck permanently mounted with a spreader used
exclusively for dispensing or spreading water, dust or liquid fertilizers or agricultural
chemicals, as defined in K.S.A. 2-2202, and amendments thereto, regardless of ownership;

      (4) a truck mounted with a fertilizer spreader used or manufactured principally to spread
animal dung;

      (5) a mixer-feed truck owned and used by a feedlot, as defined in K.S.A. 47-1501, and
amendments thereto, and specially designed and used exclusively for dispensing food to
livestock in such feedlot.

      (dd) ``Motorized wheelchair'' means any self-propelled vehicle designed specifically for
use by a physically disabled person that is incapable of a speed in excess of 15 miles per
hour.

      (ee) ``Oil well servicing, oil well clean-out or oil well drilling machinery or equipment''
means a vehicle constructed as a machine used exclusively for servicing, cleaning-out or
drilling an oil well and consisting in general of a mast, an engine for power, a draw works
and a chassis permanently constructed or assembled for one or more of those purposes.
The passenger capacity of the cab of a vehicle shall not be considered in determining
whether such vehicle is an oil well servicing, oil well clean-out or oil well drilling machinery
or equipment.

      Sec.  6. K.S.A. 1999 Supp. 8-1,126 is hereby amended to read as follows: 8-1,126. When
a motor vehicle which bears a special license plate or placard issued pursuant to K.S.A. 8-
1,125, and amendments thereto, is being operated by or used for the transportation of a
person with a disability, such motor vehicle:

      (a) May be parked in any parking space, whether on public or private property, which
is clearly marked as being reserved for the use of persons with a disability or persons
responsible for the transportation of a person with a disability, except a parking space on
private property which is clearly marked as being reserved for the use of a specified person
with a disability;

      (b) may be parked for a period of time not to exceed 24 hours in any parking zone
which is restricted as to the length of parking time permitted, except where stopping,
standing or parking is prohibited to all vehicles, where parking is reserved for special types
of vehicles or where parking would clearly present a traffic hazard; and

      (c) shall be exempt from any parking meter fees of the state or any city, county or other
political subdivision.

      Sec.  7. K.S.A. 1999 Supp. 8-235 is hereby amended to read as follows: 8-235. (a) No
person, except those expressly exempted, shall drive any motor vehicle upon a highway in
this state unless such person has a valid driver's license. No person shall receive a driver's
license unless and until such person surrenders or with the approval of the division, lists to
the division all valid licenses in such person's possession issued to such person by any other
jurisdiction. All surrendered licenses or the information listed on foreign licenses shall be
returned by the division to the issuing department, together with information that the
licensee is now licensed in a new jurisdiction. No person shall be permitted to have more
than one valid license at any time.

      (b) Any person licensed under the motor vehicle drivers' license act may exercise the
privilege granted upon all streets and highways in this state and shall not be required to
obtain any other license to exercise such privilege by any local authority. Nothing herein
shall prevent cities from requiring licenses of persons who drive taxicabs or municipally
franchised transit systems for hire upon city streets, to protect the public from drivers whose
character or habits make them unfit to transport the public. If a license is denied, the
applicant may appeal such decision to the district court of the county in which such city is
located by filing within 10 days after such denial, a notice of appeal with the clerk of the
district court and by filing a copy of such notice with the city clerk of the involved city. The
city clerk shall certify a copy of such decision of the city governing body to the clerk of the
district court and the matter shall be docketed as any other cause and the applicant shall
be granted a trial of such person's character and habits. The matter shall be heard by the
court de novo in accordance with the code of civil procedure. The cost of such appeal shall
be assessed in such manner as the court may direct.

      (c) Any person operating in this state a motor vehicle, except a motorcycle, which is
registered in this state other than under a temporary thirty-day permit shall be the holder
of a driver's license which is classified for the operation of such motor vehicle, and any
person operating in this state a motorcycle which is registered in this state shall be the
holder of a class M driver's license, except that any person operating in this state a
motorcycle which is registered under a temporary thirty-day permit shall be the holder of
a driver's license for any class of motor vehicles.

      (d) No person shall drive any motorized bicycle upon a highway of this state unless: (1)
Such person has a valid driver's license which entitles the licensee to drive a motor vehicle
in any class or classes; or (2) such person is at least 15 years of age and has passed the
written and visual examinations required for obtaining a class C driver's license, in which
case the division shall issue to such person a class C license which clearly indicates such
license is valid only for the operation of motorized bicycles; or (3) such person has had their
driving privileges suspended and has made application to the division for the issuance of a
class C license for the operation of motorized bicycles, in accordance with paragraph (2), in
which case the division shall issue to such person a class C license which clearly indicates
such license is valid only for the operation of motorized bicycles.

      (e) Violation of this section shall constitute a class B misdemeanor.

      Sec.  8. K.S.A. 1999 Supp. 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),:
      (1) Any person applying for a driver's license shall comply with the provisions of
subsection (b) of K.S.A. 8-240, and amendments thereto; and
      (2) any person who is under the age of 18 years and at least 16 years of age, 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.  9. K.S.A. 1999 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) has held an
instructional permit issued under the provisions of K.S.A. 8-239, and amendments thereto,
for a period of at least six months and has completed at least 25 hours of adult supervised
driving; and (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: (1) 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;
or (2) fails to provide the required affidavit stating that the licensee has completed at least
50 hours of adult supervised driving with 10 of those hours being at night 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 provides such affidavit to the division or the person
reaches 17 years of age, whichever occurs first.

      Any licensee issued a restricted license under this subsection 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 the required 25 hours prior to being
issued a restricted license and 25 hours of additional adult supervised driving. Of the 50
hours required by this subsection, at least 10 of those hours shall be at night. The adult
supervised driving 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.

      (b) Who is under the age of 18 years, except as provided in K.S.A. 1999 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.

      (h) Who has not submitted proof of age or proof of identity, as required by K.S.A. 8-
240, and amendments thereto.
      (i) Whose presence in the United States is in violation of federal immigration laws.

      Sec.  10. K.S.A. 1999 Supp. 8-240 is hereby amended to read as follows: 8-240. (a) Every
application for an instruction permit shall be made upon a form furnished by the division
of vehicles and accompanied by a fee of $2 for class A, B, C or M and $5 for all commercial
classes. Every other application shall be made upon a form furnished by the division and
accompanied by an examination fee of $3, unless a different fee is required by K.S.A. 8-
241, and amendments thereto, and by the proper fee for the license for which the application
is made. If the applicant is not required to take an examination the examination fee shall
not be required. The examination shall consist of three tests, as follows: (1) Vision; (2)
written; and (3) driving. If the applicant fails the vision test, the applicant may have
correction of vision made and take the vision test again without any additional fee. If an
applicant fails the written test, the applicant may take such test again upon the payment of
an additional examination fee of $1.50. If an applicant fails the driving test, the applicant
may take such test again upon the payment of an additional examination fee of $1.50. If an
applicant fails to pass all three of the tests within a period of six months from the date of
original application and desires to take additional tests, the applicant shall file an application
for reexamination upon a form furnished by the division, which shall be accompanied by a
reexamination fee of $3, except that any applicant who fails to pass the written or driving
portion of an examination four times within a six-month period, shall be required to wait a
period of six months from the date of the last failed examination before additional
examinations may be given. Upon the filing of such application and the payment of such
reexamination fee, the applicant shall be entitled to reexamination in like manner and subject
to the additional fees and time limitation as provided for examination on an original
application. If the applicant passes the reexamination, the applicant shall be issued the
classified driver's license for which the applicant originally applied, which license shall be
issued to expire as if the applicant had passed the original examination.

      (b)  (1) For the purposes of obtaining any driver's license, an applicant, except for any
applicant under 16 years of age, shall provide at least two of the documents specified in
K.S.A. 8-246, and amendments thereto. Any applicant under 16 years of age shall provide
at least one of the documents specified in K.S.A. 8-246, and amendments thereto, which
shall contain the date of birth of the applicant and such applicant's parent or guardian shall
sign the application for any driver's license shall submit, with the application, proof of age
or proof of identity, or both, as the division may require.
      (2) An applicant who submits proof of age or of identity issued by an entity other than
a state or the United States shall also submit such proof as the division may require that the
applicant is lawfully present in the United States.
      (3) The division shall not issue any driver's license to any person who is not lawfully
present in the United States.
      (4) The division shall not issue any driver's license to any person who is not a resident
of the state of Kansas, except as provided in K.S.A. 1999 Supp. 8-2,148, and amendments
thereto.
      (5) The parent or guardian of an applicant under 16 years of age shall sign the
application for any driver's license submitted by such applicant.

      (c) Every application shall state the name, date of birth, sex and residence address of
the applicant, and briefly describe the applicant, and shall state whether the applicant has
theretofore been licensed as a driver, and, if so, when and by what state or country, and
whether any such license has ever been suspended or revoked, or whether an application
has ever been refused, and, if so, the date of and reason for such suspension, revocation or
refusal. In addition to the above criteria, applications for commercial drivers' licenses and
instruction permits for commercial licenses must include the following: The applicant's
social security number; the person's signature; the person's color photograph; certifications,
including those required by 49 C.F.R. 383.71(a), effective January 1, 1991; a consent to
release driving record information; and, any other information required by the division.

      (d) When an application is received from a person previously licensed in another
jurisdiction, the division shall request a copy of the driver's record from the other
jurisdiction. When received, the driver's record shall become a part of the driver's record
in this state with the same force and effect as though entered on the driver's record in this
state in the original instance.

      (e) When the division receives a request for a driver's record from another licensing
jurisdiction the record shall be forwarded without charge.

      (f) A fee shall be charged as follows:

      (1) For a class C driver's license issued to a person at least 21 years of age, but less than
65 years of age, $12;

      (2) for a class C driver's license issued to a person less than 21 years of age or 65 years
of age or older, or a farm permit, $8;

      (3) for a class M driver's license issued to a person at least 21 years of age, but less than
65 years of age, $6.50;

      (4) for a class M driver's license issued to a person less than 21 years of age or 65 years
of age or older, $5;

      (5) for a class A or B driver's license issued to a person who is at least 21 years of age,
but less than 65 years of age, $18;

      (6) for a class A or B driver's license issued to a person less than 21 years of age or 65
years of age or older, $12; or

      (7) for any class of commercial driver's license, $14.

      A fee of $10 shall be charged for each commercial driver's license endorsement, except
air brake endorsements which shall have no charge.

      If one fails to make an original application or renewal application for a driver's license
within the time required by law, or fails to make application within 60 days after becoming
a resident of Kansas, a penalty of $1 shall be added to the fee charged for the driver's
license.

      Sec.  11. K.S.A. 1999 Supp. 8-293 is hereby amended to read as follows: 8-293. Except
as provided in paragraph (3) of subsection (d) of K.S.A. 8-235, and amendments thereto, no
licensee shall be issued a new or replacement driver's license if: (a) The license has been
surrendered pursuant to K.S.A. 8-1001, and amendments thereto; (b) the licensee has been
issued a temporary license; or (c) a suspension, revocation or cancellation order has been
stayed by a court or by the division of vehicles.

      Sec.  12. K.S.A. 8-1103 is hereby amended to read as follows: 8-1103. (a) Whenever any
person providing wrecker or towing service, as defined by law, while lawfully in possession
of a vehicle, at the direction of a law enforcement officer or the owner, renders any service
to the owner thereof by the recovery, transportation, protection, storage or safekeeping
thereof, a first and prior lien on the vehicle is hereby created in favor of such person
rendering such service and the lien shall amount to the full amount and value of the service
rendered. The lien may be foreclosed in the manner provided in this act. If the name of
the owner of the vehicle is known to the person in possession of such vehicle, then within
15 days, notice shall be given to the owner that the vehicle is being held subject to satisfaction
of the lien. Any vehicle remaining in the possession of a person providing wrecker or towing
service for a period of 60 days after such wrecker or towing service was provided may be
sold to pay the reasonable or agreed charges for such recovery, transportation, protection,
storage or safekeeping of such vehicle and personal property therein, the costs of such sale,
the costs of notice to the owner of the vehicle and publication as required by this act, except
that any such vehicle and personal property of a total value of less than $500 $1,000 may
be sold at any time, after giving the notices required by this act, unless a court order has
been issued to hold such vehicle for the purpose of a criminal investigation or for use as
evidence at a trial. If a court orders any vehicle to be held for the purpose of a criminal
investigation or for use as evidence at a trial, then such order shall be in writing, and the
court shall assess as costs the reasonable or agreed charges for the protection, storage or
safekeeping accrued while the vehicle was held pursuant to such written order. Any personal
property within the vehicle need not be released to the owner thereof until the reasonable
or agreed charges for such recovery, transportation or safekeeping have been paid, or
satisfactory arrangements for payment have been made, except that personal medical
supplies shall be released to the owner thereof upon request. The person in possession of
such vehicle and personal property shall be responsible only for the reasonable care of such
property. Any personal property within the vehicle not returned to the owner shall be sold
at the auction authorized by this act.

      (b) At the time of providing wrecker or towing service, any person providing such
wrecker or towing service shall give written notice to the driver, if available, of the vehicle
being towed that a fee will be charged for storage of such vehicle. Failure to give such
written notice shall invalidate any lien established for such storage fee.

      Sec.  13. K.S.A. 8-1104 is hereby amended to read as follows: 8-1104. Before any such
vehicle and personal property is sold, the person intending to sell such vehicle shall request
verification from the division of vehicles of the last registered owner and any lienholders, if
any. Such verification request shall be submitted to the division of vehicles no less than 45
days nor more than 60 days after such person took possession of the vehicle, except that if
the value of the vehicle and personal property is less than $500 $1,000, the verification
request shall be submitted to the division of vehicles within 60 days after such person took
possession of the vehicle. Notice of sale, as provided in this act, shall be mailed by certified
mail to any such registered owner and any such lienholders within 10 days after receipt of
verification of the last owner and any lienholders, if any. The person intending to sell such
vehicle and personal property pursuant to this act shall cause a notice of the time and place
of sale, containing a description of the vehicle and personal property, to be published at
least once each week for three consecutive weeks in a newspaper published in the county
where such sale is advertised to take place, and if there is no newspaper published in such
county, then the notice shall be published in some newspaper of general circulation in such
county. Notices given under this section shall state that if the amount due, together with
storage, publication, notice and sale costs, is not paid within 15 days from the date of mailing,
the vehicle and personal property will be sold at public auction.

      Sec.  14. K.S.A. 8-1108 is hereby amended to read as follows: 8-1108. Failure to give
any notice required under the provisions of this act shall invalidate any lien established
under stop the imposition of storage fees, until the notice provisions are complied with in
accordance with the provisions of this act.

      Sec.  15. K.S.A. 8-1324 is hereby amended to read as follows: 8-1324. (a) Any resident
may make application to the division of vehicles and be issued one identification card,
certified by the registrant and attested by the division as to true name, correct age,
photograph and other identifying data as the division may require. Every application for an
identification card shall be signed and verified by the applicant and shall contain such bona
fide documentary evidence of the age and identity of such applicant as the division may
require. The applicant, except for any applicant under 16 years of age, shall provide at least
two of the documents specified in K.S.A. 8-1326, and amendments thereto. Any applicant
under 16 years of age shall provide at least one of the documents specified in K.S.A. 8-1326,
and amendments thereto, and the applicant's parent or guardian shall sign the application
for the identification card.

      (b) An applicant who submits documentary evidence under subsection (a), issued by an
entity other than a state or the United States shall also submit such proof as the division
may require that the applicant is lawfully present in the United States.
      (c) The division shall not issue an identification card to any person who is not lawfully
present in the United States.
      (d) The parent or guardian of an applicant under 16 years of age shall sign the
application for an identification card submitted by such applicant.
      (e) The division shall require payment of a fee of $6 $8 at the time application for an
identification card is made, except that persons who are 65 or more years of age or who are
handicapped, as defined in K.S.A. 8-1,124, and amendments thereto, shall be required to
pay a fee of only $2 $4.

      (b) (f) For the purposes of K.S.A. 8-1324 through 8-1328, and amendments thereto, a
person shall be deemed to be a resident of the state if:

      (1) The person owns, leases or rents a place of domicile in this state;

      (2) the person engages in a trade, business or profession in this state;

      (3) the person is registered to vote in this state;

      (4) the person enrolls the person's child in a school in this state; or

      (5) the person registers the person's motor vehicle in this state.

      Sec.  16. K.S.A. 8-1332 is hereby amended to read as follows: 8-1332. (a) When used
in reference to an identification card, ``cancellation'' means that an identification card is
terminated without prejudice and must be surrendered. Cancellation of a card may be made
when such card has been issued through error, because the person is not entitled to a card
or when voluntarily surrendered to the division.

      (b) The division is hereby authorized to cancel any identification card upon determining
that the cardholder was not entitled to the issuance of such card or that the cardholder failed
to give the required or correct information in such person's application or committed any
fraud in making such application.
      (c) Upon cancellation of an identification card the cardholder must surrender the
identification card so canceled to the division.

      Sec.  17. K.S.A. 8-1439 is hereby amended to read as follows: 8-1439. ``Motor-driven
cycle'' means every motorcycle, including every motor scooter, with a motor which produces
not to exceed five (5) brake horsepower, and every bicycle with motor attached, except a
motorized bicycle or a low power cycle an electric-assisted bicycle.

      Sec.  18. K.S.A. 8-1439a is hereby amended to read as follows: 8-1439a. ''Motorized
bicycle`` means every device having two tandem wheels or three wheels which may be
propelled by either human power or helper motor, or by both, and which has:

      (a) A motor which produces not more than 3.5 brake horsepower;

      (b) a cylinder capacity of not more than 50 130 cubic centimeters;

      (c) an automatic transmission; and

      (d) the capability of a maximum design speed of no more than 30 miles per hour except
a low power cycle.

      Sec.  19. K.S.A. 1999 Supp. 8-1486 is hereby amended to read as follows: 8-1486. K.S.A.
8-1414a, 8-1459a and 8-1475a, and amendments thereto, and K.S.A. 1999 Supp. 8-1402a,
8-1439c and, 8-1458a and 8-1487, and amendments thereto, and K.S.A. 1999 Supp. 8-1487
sections 2 and 4, and amendments thereto, shall be a part of, and supplemental to, the
uniform act regulating traffic on highways.'';

      By renumbering sections accordingly;

      On page 3, preceding line 1, by inserting:

      ``Sec.  21. K.S.A. 8-1592b is hereby amended to read as follows: 8-1592b. Vehicle
registration and driver's license shall not be required for operation of a low power cycle an
electric-assisted bicycle. Traffic regulations applicable to bicycles shall apply to low power
cycles electric-assisted bicycles, except tricycles with no brake horsepower.

      Sec.  22. K.S.A. 8-1701 is hereby amended to read as follows: 8-1701. (a) It is unlawful
for any person to drive or move or for the owner to cause or knowingly permit to be driven
or moved on any highway any vehicle or combination of vehicles which does not contain
those parts or is not at all times equipped with such lamps and other equipment in proper
condition and adjustment as required in this article, or which is equipped in any manner in
violation of any provision of any section of this article 17, or for any person to do any act
forbidden or fail to perform any act required by any provision of any section of this article
17. Except as otherwise provided in K.S.A. 8-1742a, 8-1743, 8-1746 and 8-1750 to 8-1760,
inclusive, and amendments thereto, any violation of this subsection (a) or of any other
provision of this article 17 is a traffic infraction.

      (b) Nothing contained in this article 17 shall be construed to prohibit the use of
additional parts and accessories on any vehicle not inconsistent with the provisions of this
article.

      (c) The provisions of this article 17 with respect to equipment required on vehicles shall
not apply to implements of husbandry, road machinery, road rollers or farm tractors except
as specifically made applicable in this act.

      (d) The provisions of this article 17 with respect to equipment required on vehicles shall
not apply to motorcycles or motor-driven cycles, except as specifically made applicable by
law.

      (e) A low-speed vehicle which is in compliance with the equipment requirements in 49
C.F.R. 571.500 shall be deemed to be in compliance with the provisions of this article 17.

      Sec.  23. K.S.A. 8-1717 is hereby amended to read as follows: 8-1717. (a) Every farm
tractor manufactured or assembled after January 1, 1975, shall be equipped with vehicular
hazard warning lights of a type described in K.S.A. 8-1722, and amendments thereto, visible
from a distance of not less than 1,000 feet to the front and rear in normal sunlight, which
shall be displayed whenever any such vehicle is operated upon a highway.

      (b) Every farm tractor manufactured or assembled after January 1, 1975, shall at all
times, and every other such motor vehicle shall at all times mentioned in K.S.A. 8-1703,
and amendments thereto, be equipped with lamps and reflectors as follows:

      (1) At least two head lamps meeting the requirements of K.S.A. 8-1724, 8-1726 or 8-
1727, and amendments thereto.

      (2) At least one red lamp visible when lighted from a distance of not less than 1,000
feet to the rear mounted as far to the left of the center of the vehicle as practicable.

      (3) At least two red reflectors visible from all distances within 600 feet to 100 feet to
the rear when directly in front of lawful lower beams of head lamps.

      (c) On every combination of farm tractor and towed farm equipment or towed
implement of husbandry, the farm tractor shall be equipped as required in subsections (a)
and (b), and the towed unit shall be equipped at all times mentioned in K.S.A. 8-1703, and
amendments thereto, with lamps and reflectors as follows:

      (1) If the towed unit or its load extends more than four feet to the rear of the tractor
or obscures any light thereon, the unit shall be equipped on the rear with at least one red
lamp visible when lighted from a distance of not less than 1,000 feet to the rear, mounted
as far to the left of the center of the towed unit as practicable, and at least two red reflectors
visible from all distances within 600 feet to 100 feet to the rear when directly in front of
lawful lower beams of head lamps.

      (2) If the towed unit of such combination extends more than four feet to the left of the
center line of the tractor, the unit shall be equipped on the front with an amber reflector
visible from all distances within 600 feet to 100 feet to the front when directly in front of
lawful lower beams of head lamps. This reflector shall be so positioned to indicate, as nearly
as practicable, the extreme left projection of the towed unit.

      (3) If the towed unit or its load obscures either of the vehicle hazard warning lights on
the tractor, the towed unit shall be equipped with vehicle hazard warning lights described
in subsection (a).

      (d) The two red reflectors required in the preceding subsections shall be so positioned
as to show from the rear, as nearly as practicable, the extreme width of the vehicle or
combination carrying them. If all other requirements are met, reflective tape or paint may
be used in lieu of the reflectors required by subsection (c).

      (e) As used in this section:

      (1) ``Slow-moving vehicle'' means any vehicle, farm tractor, implement of husbandry,
equipment or piece of machinery designed for use at speeds of less than 25 miles per hour,
or which is normally moved at speeds of less than 25 miles per hour, and includes all road
construction or maintenance machinery, except when such machinery is engaged in actual
construction or maintenance work and there is either a flagman or clearly visible warning
signs to warn of such machinery's presence on the roadway.

      (2) ``Slow-moving vehicle emblem'' means a triangular-shaped emblem of substantial
construction having equal sides of 14 inches and an altitude of 12 inches, and such emblem
shall be painted a fluorescent yellow-orange color and bordered with reflective red-colored
strips having a minimum width of 1 3/4 inches, with the vertices of the overall triangle
truncated in such a manner that the remaining altitude shall be at least 14 inches.

      (f) The secretary of transportation shall approve slow-moving vehicle emblems which
meet the requirements of this act, and shall compile and publish a list of approved emblems
and the manufacturers thereof.

      (g) A slow-moving vehicle emblem shall be mounted or affixed on the rear of the slow-
moving vehicle in compliance with standard S276.2 of the American society of agricultural
engineers, as such standard was revised in March, 1968.

      (h) No person shall operate any slow-moving vehicle on any highway which is within
the national system of interstate and defense highways, the state highway system or the state
system of modern express highways and freeways, unless such vehicle is equipped with a
properly mounted slow-moving vehicle emblem, which has been approved by the secretary
of transportation, and which is maintained in a clean, fluorescent and reflective condition,
or display a slow-moving vehicle emblem on any vehicle other than a slow-moving vehicle
or display such emblem on a slow-moving vehicle which is being operated at a speed of 25
miles per hour or more, or to use such emblem in any manner other than authorized by
this section.

      (i) Notwithstanding the provisions of this section, a low-speed vehicle shall not be
required to display a slow-moving vehicle emblem.'';

      On page 4, following line 19, by inserting:

``Unlawful passing of stopped emergency vehiclesection 1$20'';
      On page 6, preceding line 18, by inserting:

``Unlawful operation of low-speed vehiclesection 3$20'';
      By renumbering sections accordingly;

      On page 8, in line 7, by striking all following ``K.S.A.'' where it appears for the first time
and inserting ``8-1103, 8-1104, 8-1106, 8-1108, 8-1324, 8-1332, 8-1439, 8-1439a, 8-1439b,
8-1530, 8-1592b, 8-1701 and 8-1717 and K.S.A. 1999 Supp. 8-126, 8-1,126, 8-235, 8-235d,
8-237, 8-240, 8-293, 8-1486 and 8-2118'';

      In the title, in line 14, by striking all following ``ACT''; by striking all of lines 15 and 16
and inserting ``relating to vehicles; concerning the regulation thereof; relating to the duties
of the division of vehicles; providing for certain electric vehicles; concerning wrecker and
towing service; amending K.S.A. 8-1103, 8-1104, 8-1108, 8-1324, 8-1332, 8-1439, 8-1439a,
8-1530, 8-1592b, 8-1701 and 8-1717 and K.S.A. 1999 Supp. 8-126, 8-1,126, 8-235, 8-235d,
8-237, 8-240, 8-293, 8-1486 and 8-2118 and repealing the existing sections; also repealing
K.S.A. 8-1106 and 8-1439b.'';

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Ben Vidricksen

                                                                                    Nick Jordan

                                                                                    Mark Gilstrap
 Conferees on the part of Senate
                                                                                   

                                                                                    Gary K. Hayzlett

                                                                                    John D. Ballou

                                                                                    Bruce Larkin
 Conferees on part of House


   Senator Vidricksen moved the Senate adopt the Conference Committee Report on
HB 2641.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.


EXPLANATION OF VOTE
 Mr. President: Even though I am appalled that people can get a moped license after
their drivers license has been suspended, I will vote for this bill because of the other valuable
economic and safety issues it contains. Next session, should I be re-elected, I plan to pre-
file a bill to remedy this ridiculous situation.--Rich Becker

 Senator Vratil requests the record to show he concurs with the ``Explanation of Vote''
offered by Senator Becker on HB 2641.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2660, submits the following report:

 The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with Senate Committee
amendments, as follows:

 On page 1, in line 18, before ``For'', by inserting ``(a)''; in line 21, by striking ``this act''
and inserting ``sections 2 through 13''; preceding line 22, by inserting new material to read
as follows:

 ``(b) For the fiscal year ending June 30, 2001, appropriations are hereby made, restrictions
and limitations are hereby imposed, and transfers, disbursements, procedures and acts
incidental to the foregoing are hereby directed or authorized as provided in subsection (b)
of section 12.'';

 On page 6, in line 10, by striking ``state general fund'' and inserting ``state of Kansas--
department of corrections inmate benefit fund''; in line 12, following ``parolee,'', by inserting
``for a grant for victim's rights education''; also in line 12, by striking ``claimants''; by striking
all in lines 13 through 16 and inserting new material to read as follows:

``Speak Out for Stephanie Foundation, P.O. Box 7829, Overland Park, KS66207$50,000'';
 On page 8, in line 31, following ``(b)'', by inserting ``On and after January 1, 2001,'';

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Stephen R. Morris

                                                                                    Nick Jordan

                                                                                    Mark Gilstrap
 Conferees on the part of Senate
                                                                                   

                                                                                    David Adkins

                                                                                    Melvin Neufeld

                                                                                    Bill Feuerborn
 Conferees on part of House


   Senator Morris moved the Senate adopt the Conference Committee Report on HB 2660.

 On roll call, the vote was: Yeas 30, Nays 10, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Bleeker, Bond, Brownlee, Downey, Feleciano, Gilstrap, Gooch,
Goodwin, Harrington, Hensley, Jones, Jordan, Langworthy, Lawrence, Lee, Morris, Oleen,
Petty, Praeger, Ranson, Salisbury, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 Nays: Biggs, Clark, Corbin, Donovan, Emert, Hardenburger, Huelskamp, Kerr, Pugh,
Salmans.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to Substitute for HB 2683, submits the following report:

      The House accedes to all Senate amendments to the substitute bill and the committee
further agrees to amend the substitute bill as printed with Senate Committee amendments
as follows;

      On page 1, in line 22, by striking ``New'';

      On page 2, by striking all in lines 21 through 43;

      By striking all on pages 3 through 38;

      On page 39, by striking all in lines 1 through 21; in line 22, by striking ``16'' and inserting
``2''; in line 23, by striking ``Kansas register'' and inserting ``statute book'';

      On page 1, in the title, in line 10, by striking ``crimes,''; also in line 10, by striking ``and
punishment''; in line 12, by striking the semicolon; by striking all in lines 13 through 18; in
line 19, by striking ``sections'';

                                                                                     And your committee on conference recommends the adoption of this report.

                                                                                    Tim Emert

                                                                                    John Vratil

                                                                                    Greta Goodwin
 Conferees on the part of Senate
                                                                                   

                                                                                    Michael O'Neal

                                                                                    Tim Carmody

                                                                                    Janis L. Pauls
 Conferees on part of House


   Senator Emert moved the Senate adopt the Conference Committee Report on Sub for
HB 2683.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
      Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2996, submits the following report:

      The Senate recedes from all of its amendments to the bill;

                                                                                           And your committee on conference recommends the adoption of this report.

                                                                                    Dave Kerr

                                                                                    Alicia L. Salisbury

                                                                                    Christine Downey
 Conferees on the part of Senate
                                                                                   

                                                                                    David Adkins

                                                                                    Melvin Neufeld

                                                                                    Bill Reardon
 Conferees on part of House


   Senator Kerr moved the Senate adopt the Conference Committee Report on HB 2996.

 On roll call, the vote was: Yeas 40, Nays 0, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger, Harrington, Hensley,
Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen, Vratil.

 The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate amendments
to HB 3019, submits the following report:

 The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:

 On page 9, in line 42, by striking ``of'';

 On page 10, in line 24, before the semicolon, by inserting ``, but shall not include the
boundaries of any redevelopment district in a major tourism area which includes an auto
race track facility located in Wyandotte county as follows: Beginning at the intersection of
Interstate 70 and Interstate 435; west along Interstate 70 to 118th Street; north along 118th
Street to State Avenue; northeasterly along proposed relocated State Avenue to 110th Street;
north along 110th Street to Parallel Parkway; east along Parallel Parkway to Interstate 435;
South along Interstate 435 to Interstate 70''; in line 42, by striking ``expansion of the''; in
line 43, after ``area'', by inserting ``be expanded'';

 On page 11, in line 2, by striking the first ``the''; in line 9, after ``the'' by inserting
``proposed''; also in line 9, after ``boundaries'', by striking ``proposed''; in line 14, by striking
``approval'' and inserting ``expansion beyond the campus boundaries''; in line 22, by striking
all after the first ``by''; by striking all in lines 23 and 24, and inserting ``the governing body
of the county, no sales tax increment collected from taxpayers doing business within the
project area, but outside the boundaries of the college campus shall be pledged pursuant
to section 3 as debt service for payment of principle and interest on any bonds issued for
the project until it is first subject to a county-wide election and has received the approval
of a majority of the electors of the county voting thereon at an election held pursuant to
the notice, publication and other election procedures prescribed by K.S.A. 12-187 and
amendments thereto.'';

 On page 12, in line 24, by striking ``all'' and inserting ``any'';

 On page 13, in line 38, by striking ``redevelopment district'' and inserting ``project area'';
also in line 38, by striking all after the comma; in line 39, by striking all before ``any'';

                                                                                           And your committee on conferece recommends the adoption of this report.

                                                                                    Lana Oleen

                                                                                    Nancey Harrington

                                                                                    Sherman Jones
 Conferees on the part of Senate
                                                                                   

                                                                                    William G. Mason

                                                                                    Jene Vickrey

                                                                                    Annie Kuether
 Conferees on part of House


    Senator Oleen moved the Senate adopt the Conference Committee Report on HB 3019.

 On roll call, the vote was: Yeas 29, Nays 11, Present and Passing 0, Absent or Not Voting
0.

 Yeas: Barone, Becker, Biggs, Bond, Corbin, Downey, Emert, Feleciano, Gilstrap, Gooch,
Goodwin, Harrington, Hensley, Jones, Jordan, Langworthy, Lee, Morris, Oleen, Petty,
Praeger, Ranson, Salmans, Steffes, Steineger, Stephens, Umbarger, Vidricksen, Vratil.

 Nays: Bleeker, Brownlee, Clark, Donovan, Hardenburger, Huelskamp, Kerr, Lawrence,
Pugh, Salisbury, Tyson.

 The Conference Committee report was adopted.

INTRODUCTION OF ORIGINAL MOTIONS AND SENATE RESOLUTIONS
 Senator Pugh introduced the following Senate resolution, which was read:

      SENATE RESOLUTION No. 1862--

A  RESOLUTION establishing a study group to study and make recommendations as to
the Kansas Juvenile Offenders Code and the Kansas Code for Care of Children.
      Be it resolved by the Senate of the State of Kansas: That a study group on the Kansas
Juvenile Offenders Code and the Kansas Code for Care of Children be formed, which study
group shall be composed of 15 members to be appointed by the Legislative Coordinating
Council as follows: A member of the Kansas Bar Association, a district judge, a magistrate
judge, a professor from the faculty of the School of Law of the University of Kansas, a
professor from the faculty of the School of Law of Washburn University, a representative
of the Department of Social and Rehabilitation Services, a District or County Attorney, a
member of the Kansas Judicial Council, a law enforcement officer and six members of the
Kansas legislature. The individuals appointed to this study group need to be individuals who
are interested in this area of the law and who possess a broad legal background and practical
experience or scholastic endeavor pertaining to the application of the Kansas Code for Care
of Children and the Kansas Juvenile Offenders Code. The chairperson and the vice-
chairperson shall be designated by the Legislative Coordinating Council; and

      Be it further resolved: That the study group shall meet upon the call of the chairperson
of the study group as authorized by the Legislative Coordinating Council; and

      Be it further resolved: That the study group shall study the current system regarding
the disposition of young people who become subject to the provisions of the Kansas Juvenile
Offender Code and the Kansas Code for Care of Children, hear comments from qualified
participants in the current system as to its operation, consider programs from other
jurisdictions and the writing of academicians on this subject. The study group shall develop
its findings and recommendations for changes in the law or complete recodification thereof
as it deems appropriate and report such findings and recommendations to both houses of
the legislature not later than January 8, 2001; and

      Be it further resolved: That members of the study group shall receive reimbursement
for attending meetings of the study group authorized by the Legislative Coordinating
Council consistent with the provisions of K.S.A. 46-1209 and amendments thereto; and

      Be it further resolved: That the staff of the legislative research department, the office
of the revisor of statutes and the division of legislative administrative services shall provide
such assistance as may be requested by the study group.

REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
 The following resolution was referred to Committee as indicated:

   Committee of the Whole: SR 1862.

ORIGINAL MOTION
 On motion of Senator Ranson, the Senate acceded to the request of the House for a
conference on S Sub for HB 2027.

 The President appointed Senators Ranson, Jordan and Gilstrap as conferees on the part
of the Senate.

 On motion of Senator Oleen, the Senate acceded to the request of the House for a
conference on HB 2838.

 The President appointed Senators Oleen, Harrington and Jones as conferees on the part
of the Senate.

   On motion of Senator Emert the Senate adjourned until 10:00 a.m., Saturday, April 29,
2000.

HELEN A. MORELAND, Journal Clerk.

PAT SAVILLE, Secretary of Senate.