CHAPTER 96 SENATE BILL No. 421
      An Act concerning the taxation of motor vehicle fuels; imposing incidence of tax on the
      distributor; amending K.S.A. 79-3407, 79-3408, 79-3408c, 79-3409 and 79-3412 and
      repealing the existing sections; also repealing K.S.A. 79-3408g.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 79-3407 is hereby amended to read as follows:
79-3407. Whenever any distributor, manufacturer, importer, or exporter
is 10 days delinquent in the payment of any such tax, penalty or interest,
or any distributor, manufacturer, importer, exporter or retailer is 10 days
delinquent in the making of any such report, or the payment of any such
tax, penalty or interest, or shall make any false report or statement or
application purporting to be under the provisions of this act, or shall make
any false statement in any application, report or statement required by
or purporting to be under the provisions of this act, or purporting to be
under the rules and regulations promulgated by the director under such
provisions, or shall have willfully or persistently violated any of the pro-
visions of this act or of any rules and regulations made thereunder, the
director upon conducting a hearing as provided in this section and upon
finding to the director's satisfaction upon such hearing, that such distrib-
utor, manufacturer, importer, exporter or retailer has been delinquent,
or has violated provisions of this act, may revoke any or all licenses issued
to such distributor, manufacturer, importer, exporter or retailer.

Hearings under this section shall be conducted in accordance with the
Kansas administrative procedure act. In the event that the director re-
vokes any license or licenses the distributor, manufacturer, importer, ex-
porter or retailer to whom such license or licenses were issued shall im-
mediately, upon service of the director's order, surrender the same to the
director and cease using, selling, delivering or manufacturing any mo-
tor-vehicle fuels or special fuels at or from any places of business or
stations for which the license or licenses have been revoked.

Sec. 2. K.S.A. 79-3408 is hereby amended to read as follows: 79-
3408. (a) A tax per gallon or fraction thereof, at the rate computed as
prescribed in K.S.A. 79-34,141, and amendments thereto, is hereby im-
posed on the use, sale or delivery of all motor vehicle fuels or special
fuels which are used, sold or delivered in this state for any purpose what-
soever.

(b) Every retail pump for motor-vehicle fuels shall be conspicuously
labeled to show the content and percentage of any ethyl alcohol or other
alcohol combined or alone in excess of 1% by volume.

(c) Unless otherwise specified in K.S.A. 79-3408c, and amendments
thereto, the incidence of this tax is imposed on the distributor of the first
receipt of the motor fuel and such taxes shall be paid but once. Such tax
shall be computed on all motor-vehicle fuels or special fuels received by
each distributor, manufacturer, or importer or retailer in this state and
paid in the manner provided for herein, except that an allowance of 2.5%
shall be made and deducted by the distributor to cover all ordinary losses
in which may have resulted from physical loss while handling such motor-
vehicle fuels or special fuels. No such allowance shall be made on any
motor-vehicle fuel or special fuel exported from the state or sold to the
United States of America or any of its agencies or instrumentalities as are
now or hereinafter exempt by law from liability to state taxation. No such
allowance shall be made for any motor-vehicle fuel or special fuel sold or
disposed of to a consumer in tank car, transport or pipeline lots.

(d) No tax is hereby imposed upon or with respect to the following
transactions:

(1) The sale or delivery of motor-vehicle fuel or special fuel for export
from the state of Kansas to any other state or territory or to any foreign
country.

(2) The sale or delivery of motor-vehicle fuel or special fuel to the
United States of America and such of its agencies as are now or hereafter
exempt by law from liability to state taxation.

(3) The sale or delivery of motor-vehicle fuel or special fuel to a
contractor for use in performing work for the United States or those
agencies of the United States above mentioned, provided such contractor
has in effect with the United States or any such agency a cost-plus-a-
fixed-fee contract covering the work.

(4) The sale or delivery of motor-vehicle fuel or special fuel which is
aviation fuel.

(5) The first sale or delivery of motor-vehicle fuel or special fuel from
a refinery, pipeline terminal, pipeline tank farm or other place to a duly
licensed distributor who in turn resells to another duly licensed distrib-
utor.

(6) The sale or delivery of special fuel which is indelibly dyed in ac-
cordance with regulations prescribed pursuant to 26 U.S.C. 4082 and
such special fuel is only used for nonhighway purposes.

(e) Each distributor, manufacturer, importer, exporter or retailer
shall make full reports and furnish such further information as the direc-
tor may require with reference to all transactions upon which no tax is to
be paid.

Sec. 3. K.S.A. 79-3408c is hereby amended to read as follows: 79-
3408c. (a) A tax is hereby imposed on the use, sale or delivery of all motor-
vehicle fuel or special fuel owned at 12:01 a.m. July 1, 1989, and on July
1 of each year thereafter, by any licensed distributor or licensed retailer
at a rate per gallon, or fraction thereof, equal to the amount, if any, by
which the tax per gallon, or fraction thereof, in effect on such date as
prescribed by K.S.A. 79-3408, and amendments thereto, exceeds the rate
of tax upon such motor-vehicle fuel or special fuel which was in effect on
the preceding day. Such tax shall be paid by the licensed distributor or
licensed retailer owning such motor-vehicle fuel or special fuel at such
time and date. On or before the 25th day of the month in which a tax is
imposed under this section, every such distributor and retail dealer shall
make a report to the director on a form prescribed and furnished by the
director showing the total number of gallons, or fraction thereof, of such
motor-vehicle fuel or special fuel owned at the time the tax is imposed
under this section and such report shall be accompanied by a remittance
of the tax due.

Any licensed distributor or licensed retailer who shall fail to make such
report or pay such tax, within the time prescribed, shall be subject to the
same penalties and interest charges prescribed by the motor-vehicle fuel
or special fuel tax law for failure of a licensed distributor to make monthly
reports and payments of motor-vehicle fuel or special fuel tax. The pro-
visions of the motor-fuel tax law relating to remedies for the collection of
delinquent motor-fuel taxes from distributors shall apply to the collection
of taxes imposed by this section which have become delinquent from
licensed distributors and licensed retailers. All taxes, penalties and inter-
est collected by the director under the tax imposed by this section shall
be paid by the director into the state treasury and the state treasurer shall
credit the same to the funds and in the amounts specified in K.S.A. 79-
34,142, and amendments thereto.

(b) Whenever the rate of tax upon motor-vehicle fuels or special fuels
fixed pursuant to K.S.A. 79-3408, and amendments thereto, which be-
come effective on July 1, 1989, or on July 1 in any year thereafter is less
than the rate of tax upon such fuel in effect on the preceding day, the
licensed distributor or licensed retailer owning such fuel at 12:01 a.m. on
the date such reduction in taxes becomes effective shall be entitled to a
refund of taxes paid upon such fuel in an amount equal to the amount by
which taxes were reduced from the amount of motor-vehicle fuels or
special fuels taxes per gallon, or fraction thereof, actually paid upon each
gallon, or fraction thereof, of motor-vehicle fuels or special fuels multi-
plied by the number of gallons of motor-vehicle fuels or special fuels
owned by the distributor or dealer on such date. On or before the 25th
day of the month in which such tax is reduced, every such distributor and
retailer shall make a report to the director on a form prescribed and
furnished by the director showing the total number of gallons of such
motor-vehicle fuel or special fuel owned by such distributor or retailer at
12:01 a.m. on the date upon which such tax was reduced. It shall be the
duty of the director of taxation to examine all such claims and determine
the amount to which each claimant is entitled. In the event any distributor
or retailer entitled to such refund shall owe the state any motor-vehicle
fuel or special fuel tax, penalties, or interest, the refund authorized by
this section shall upon being determined by the director be credited upon
the amount of such taxes, penalties and interest. Whenever the director
shall determine that any distributor or retailer shall be entitled to a refund
under any of the provisions of this section, and such refund cannot be
effected by giving credit therefor, as hereinbefore provided, or against
the future motor-vehicle fuel or special fuel tax liability of such taxpayer
the director shall certify the amount of the refund to the state director
of accounts and reports, who shall draw a warrant for the amount so
certified on the state treasurer in favor of the distributor or retailer en-
titled to such refund, and mail, or otherwise deliver, the same to the
distributor entitled thereto. Such warrant shall be paid by the state trea-
surer to such distributor or retailer from the motor-vehicle fuel or special
fuel tax refund fund.

(c) The provisions of this section shall not apply to any licensed re-
tailer who is a native American whose licensed place of business or busi-
nesses are located on such retailer's reservation, nor to any native Amer-
ican tribes having licensed places of business or businesses located on such
tribe's reservation.

Sec. 4. K.S.A. 79-3409 is hereby amended to read as follows: 79-
3409. Every distributor paying such tax or being liable for the payment
shall be entitled to charge and collect an amount, including the cost of
doing business that could include such tax on motor-vehicle fuels or spe-
cial fuels sold or delivered by such distributor, as a part of the selling
price. When the price of motor-vehicle fuels or special fuels posted on a
price sign does not include the state and federal tax which such retail
dealer's distributor paid or for which the distributor was liable, the total
of the taxes must be shown in numbers the same size as the price of the
motor fuel. Any deviation from the maximum price charged for a given
grade of motor-vehicle fuels or special fuels must be stated in letters at
least six inches high and legible. Fractions of cents must be posted in
numbers at least 1/5 the height of the whole number.

Sec. 5. K.S.A. 79-3412 is hereby amended to read as follows: 79-
3412. Whenever any person shall be in default for more than 10 days in
payment of any taxes, penalties or interest accruing or accrued under the
provisions of this act, and no seizure of property of such delinquent dis-
tributor, manufacturer, importer, exporter or retailer person has been
made under any other provisions of this act, the director shall, unless the
director has good reason to the contrary, issue a warrant under the sec-
retary's or the secretary's designee's hand and official seal, directed to the
sheriff of any county of the state, commanding the sheriff to levy upon
and sell the real and personal property of the taxpayer found within the
sheriff's county for the payment of the amount thereof with the added
penalties, interest and cost of executing the warrant and to return the
warrant to the secretary or the secretary's designee and to pay to the
secretary or the secretary's designee the money collected by virtue of it
not more than 60 days from the date of the warrant. The sheriff, within
five days after the receipt of the warrant, shall file with the clerk of the
district court of the county a copy thereof, and thereupon the clerk shall
enter in the appearance docket the name of the taxpayer person specified
in the warrant, the amount of the tax or portion of it, interest and penalties
for which the warrant is issued and the date such copy is filed and note
the taxpayer's name in the general index. No fee shall be charged for
either entry. The amount of such warrant so docketed shall thereupon
become a lien upon the title to and interest in the real property of the
taxpayer against whom it is issued. The sheriff shall proceed in the same
manner and with the same effect as prescribed by law with respect to
executions issued against property upon judgments of a court of record
and shall be entitled to the same fees for services to be collected in the
same manner.

The court in which the warrant is docketed shall have jurisdiction over
all subsequent proceedings as fully as though a judgment had been ren-
dered in the court. At the discretion of the secretary or the secretary's
designee, a warrant of like terms, force and effect may be issued and
directed to any officer or employee of the secretary, and in the execution
thereof, such officer or employee shall have all the powers conferred by
law upon sheriffs, with respect to executions issued against property upon
judgments of a court of record, and the subsequent proceedings there-
under shall be the same as provided where the warrant is issued directly
to the sheriff. The taxpayer shall have the right to redeem the real estate
within a period of 18 months from the date of such sale. If a warrant is
returned, unsatisfied in full, the secretary or the secretary's designee shall
have the same remedies to enforce the claim for taxes as if the state of
Kansas had recovered judgment against the taxpayer for the amount of
the tax. No law exempting any goods and chattels, lands and tenements
from forced sale under execution shall apply to a levy and sale under any
such warrant or upon any execution issued upon any judgment rendered
in any action for motor fuel taxes. The secretary or the secretary's des-
ignee shall have the right at any time after a warrant has been returned
unsatisfied or satisfied only in part, to issue alias warrants until the full
amount of the tax is collected.

Sec. 6. K.S.A. 79-3407, 79-3408, 79-3408c, 79-3408g, 79-3409 and
79-3412 are hereby repealed.

Sec. 7. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 9, 1998

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