----------------------------------------------------------------------------


AN ACT relating to taxation; enacting the Kansas estate tax act; defining
  resident trust for income taxation purposes; amending K.S.A. 79-1587
  and K.S.A. 1996 Supp. 79-1541a, 79-1541b, 79-1542, 79-1564, 79-
  1569, 79-1570, 79-1571, 79-1572, 79-1574, 79-1575, 79-1576, 79-1579
  and 79-1580 and repealing the existing sections; also repealing K.S.A.
  79-1538, 79-1548, 79-1554, 79-1557, 79-1566, 79-1584, 79-1584a, 79-
  1584b, 79-1584c, 79-1585 and 79-1586 and K.S.A. 1996 Supp. 79-
  1537, 79-1537b, 79-1537c, 79-1537e, 79-1537f, 79-1538a, 79-1539, 79-
  1540, 79-1541, 79-1542a, 79-1543, 79-1545, 79-1547, 79-1549,
  79-1550, 79-1551, 79-1552, 79-1553, 79-1555, 79-1556, 79-1557a, 79-
  1559, 79-1560, 79-1561, 79-1562, 79-1563, 79-1563a, 79-1565, 79-
  1567, 79-1567a, 79-1568 and 79-1573.
Be it enacted by the Legislature of the State of Kansas:
  New Section 1.  (a) A tax is hereby imposed on the estate of every
resident decedent, and every nonresident decedent who died holding an
interest in property with a Kansas tax situs, whose estate is required by
federal law to file a return for federal state taxes. The amount of such tax
shall be equal to the amount of the maximum credit allowed by section
2011 of the internal revenue code against the tax that would otherwise
be imposed on the transfer of the estate of the decedent by section 2001
of the internal revenue code.
  (b)  When the estate of a resident decedent shall consist of property
within and without the state, or in the case of the estate of a nonresident
decedent who died holding an interest in property with a Kansas tax situs,
the tax imposed under subsection (a) shall be the percentage thereof that
the gross estate for federal estate tax purposes less the value of all property
included therein having a tax situs which is not within the jurisdiction of
the state of Kansas, bears to the total gross estate for federal estate tax
purposes.
  Sec. 2.  K.S.A. 1996 Supp. 79-1541a is hereby amended to read as
follows: 79-1541a. Whenever the amount of the tax imposed upon a gen-
eration-skipping transfer by section 2601 of the internal revenue code is
determined, a tax, equal to the maximum amount of the credit allowed
against such tax by section 2604 of the internal revenue code, is hereby
imposed upon the taxable estate of the decedent as of the date of such
determination. The tax imposed under the provisions of this act shall be
chargeable against the interests of each beneficiary in proportion to the
share received by each beneficiary under such transfer.
  Sec. 3.  K.S.A. 1996 Supp. 79-1541b is hereby amended to read as
follows: 79-1541b. When the property transferred subject to the tax im-
posed by K.S.A. 1996 Supp. 79-1541a shall consist of both property within
and property without the state, the tax imposed shall be the percentage
that the Kansas assets of the generation-skipping trust or generation-skip-
ping trust equivalent bears to the total assets of the generation-skipping
trust or generation-skipping trust equivalent.
  Sec. 4.  K.S.A. 1996 Supp. 79-1542 is hereby amended to read as
follows: 79-1542. As used in this act unless the context otherwise requires:
  (a)  Any term used in this act shall have the same meaning as when
used in a comparable context in the internal revenue code. Any reference
in this act to the ``internal revenue code'' shall mean the provisions of the
United States internal revenue code of 1986, as such code exists on De-
cember 31, 1992 1996. Any reference in this act to a specific provision of
the internal revenue code shall be to such provision as it exists on De-
cember 31, 1992 1996.
  (b)  ``Deemed executor'' includes any person in actual or constructive
possession of any property of the decedent.
  (c)  ``Director'' means the director of taxation.
  (d)  ``Distributee'' means a beneficiary, legatee, devisee, heir, next of
kin, grantee, donee, vendee, joint tenant or any other successor in inter-
est, whether outright or in trust.
  (e)  ``Distributive share'' or ``distributive shares'' means the share or
shares of the distributive estate passing to a distributee or distributees.
  (f) (d)  ``Domicile'' refers to that place where a person resides, has an
intention to remain and to which they intend to return following any
absence.
  (g) (e)  ``Estate'' and ``property'' shall mean the real, personal and
mixed property or interest therein of the testator, intestate, grantor, bar-
gainor, vendor or donor which shall pass or be transferred to legatees,
devisees, heirs, next of kin, grantees, donees, vendees, or successors and
shall include all personal property within or without the state.
  (h) (f)  ``Executor'' and ``administrator'' mean the duly appointed,
qualified and acting executor or administrator of the decedent in this
state.
  (i) (g)  ``Nonresident decedent'' means a decedent who was not a res-
ident decedent at the time of death.
  (j) (h)  ``Personal representative'' means the executor, administrator
or deemed executor of the decedent.
  (k) (i)  ``Resident decedent'' means a decedent who was domiciled in
this state at the time of death.
  (l) (j)  ``Secretary'' means the secretary of revenue, or the secretary's
designee.
  (m) (k)  ``Tax'' includes tax, penalty and interest, unless the context of
a particular section otherwise requires.
  (n) (l)  ``Transfer'' shall include the passing of property or any interest
therein in possession or enjoyment, present or future, by inheritance,
descent, devise, succession, bequest, grant, deed, bargain, sale, gift or
appointment in the manner herein prescribed.
  Sec. 5.  K.S.A. 1996 Supp. 79-1564 is hereby amended to read as
follows: 79-1564. (a) Except as hereinafter provided, the executor or ad-
ministrator of the estate of every decedent whose death gives rise to a tax
liability under the provisions of this act, within nine months following the
death of the decedent, shall make and The personal representative of
every estate subject to the tax imposed by section 1 who is required by
federal law to file a return for federal estate taxes shall file in the office
of the director a return on forms prepared and furnished by the secretary
together with a copy of the federal estate tax return on or before the date
the federal estate tax return is required to be filed.
  (b)  In those estates in which no executor or administrator has been
appointed, the deemed executor shall make and file such return. In the
event there is more than one deemed executor, all deemed executors
shall be jointly responsible for completing and filing one return reporting
all of the assets of the estate except as hereinafter provided.
  (c)  If, after exercising due diligence, the personal representative mak-
ing and filing such return is unable to make a complete return as to any
part of the gross estate of the decedent, such personal representative shall
make and file a return reporting all information as to the estate assets,
including a description thereof and the name of any person holding a
legal or beneficial interest in the assets to the best of such personal re-
presentative's knowledge.
  (d) (b)  The taxes imposed under the provisions of this act shall be
paid at the expiration of nine months after the death of the decedent.
Such taxes shall be payable from the assets of the estate or proceeds
therefrom, in order, so far as practicable, that each distributive share of
the estate shall bear a just and equitable proportion of such taxes unless
otherwise directed by the will of the decedent or trust agreement by the
personal representative to the director not later than the date of the filing
of the return.
  (1)  The executor or administrator of the estate of every decedent who
is required to file a return shall pay to the director all taxes imposed under
this act. In the event the tax imposed against the shares of the decedent's
estate exceeds the value of the assets or the proceeds therefrom which
were in the custody or control of the executor or administrator, the ex-
ecutor or administrator shall pay the tax imposed to the extent of the
value of the amount or the proceeds therefrom within such executor's or
administrator's custody or control and the balance of the taxes may be
stayed upon application to and approval by the director. Such application
shall be made at the time the return is filed upon forms prescribed by
the secretary. Upon approval of such application payment of the taxes
shall be stayed for a period not to exceed one year and the executor or
administrator shall have a right to proceed against the individual distri-
butee or distributees receiving such taxable shares and may perfect a lien
therefor under the provisions of K.S.A. 79-1569, and amendments
thereto.
  (2)  Except as hereinafter provided, the deemed executor or deemed
executors of the estate of every decedent who are required to file a return
shall pay to the director all of the taxes imposed by this act. To the extent
that all deemed executors do not join in the filing of the return, the
deemed executors who jointly file shall pay only that portion of the taxes
representing the aggregate tax liability imposed upon the distributive
shares of those so filing.
  (3)  Where an asset not within the custody or control of a personal
representative gives rise to a tax liability and such personal representative
is required to pay such tax or has voluntarily paid such tax from the assets
within such personal representative's custody or control, the personal rep-
resentative shall have a right to proceed against the individual distributee
receiving such share and may perfect a lien therefor under the provisions
of K.S.A. 79-1569, and amendments thereto. For the purpose of this
paragraph: (1) With respect to the tax liability caused without consider-
ation of K.S.A. 79-1539 or 79-1540, and amendments thereto, the per-
sonal representative shall be entitled to recover from the distributee the
amount by which the total tax liability of the decedent's estate resulting
from such assets outside the control of the personal representative and
received by the distributee exceeds the total tax liability which would have
been payable if the value of such property had not been included in the
decedent's gross estate; and (2) with respect to any additional tax liability
resulting from the application of K.S.A. 79-1539 or 79-1540, and amend-
ments thereto, the personal representative shall be entitled to recover
from the distributee that portion of the total tax liability caused by such
application equal to the ratio that the value of such assets outside the
control of the personal representative received by the distributee bears
to the total value of such assets outside the control of the personal rep-
resentative.
  (4)  Whenever the personal representative is required to pay the taxes
imposed upon an asset not within the personal representative's custody
or control and pays the taxes imposed thereon from assets or proceeds
therefrom of the estate within the personal representative's custody or
control and thereafter fails to collect the taxes attributable to the distrib-
utive shares of the decedent's estate which were not within the personal
representative's custody or control, the personal representative shall be
entitled to a refund of the taxes attributable to such shares which were
paid from assets or proceeds therefrom within the personal representa-
tive's custody or control upon application to the director. The application
for refund shall be filed on forms prescribed by the secretary within the
time allowed for refunds pursuant to K.S.A. 79-1574, and amendments
thereto. Upon being satisfied that the personal representative has exer-
cised due diligence in attempting to recover the taxes attributable to the
distributive shares of the decedent's estate which were not within such
personal representative's custody or control, the director shall refund the
same.
  (5)  The director shall issue a receipt acknowledging payment of such
taxes whenever the taxes as shown to be due on the return or any addi-
tional taxes assessed by the director have been paid by a personal rep-
resentative and (A) such executor or administrator has requested a cash
receipt in order to be subrogated to the state's right to proceed in col-
lecting the tax against a distributee; or (B) such executor or administrator
has received a stay of payment from the director. Such a receipt shall be
issued only under circumstances described in clauses (A) or (B) of this
subsection and shall not constitute evidence that a final determination of
taxes pursuant to K.S.A. 79-1571, and amendments thereto, has been
made.
  (e) (c)  If the taxes contemplated by this act are not paid when due,
interest at the rate prescribed by K.S.A. 79-2968(b), and amendments
thereto, shall be charged and collected commencing at the time the same
become payable. When the filing of the return is delayed beyond nine
months after the death of the decedent and the director finds that such
delay was due to the inability of the personal representative to determine
the distributive shares of an estate or the proper recipients thereof, or to
litigation, interest shall commence at the time the return is filed.
  (f)  At the election of the personal representative, the taxes imposed
by this act may be determined by the director. Such election shall be
made by filing a return disclosing all information necessary for the de-
termination of the taxes imposed by this act. Upon receipt of all necessary
information, the director shall determine the taxes due and owing and
shall notify the personal representative of the tax liability by registered or
certified mail. Notwithstanding any election made pursuant to this sec-
tion, the taxes shall be due and payable at the same time and in the same
manner as if the taxes had been determined by the personal represen-
tative. If the election pursuant to this subsection is made before the ex-
piration of the nine-month period after the death of the decedent, interest
shall be charged and collected commencing 10 days after notice of the
tax liability has been received by the personal representative, or at the
expiration of the nine-month period after the decedent's death, whichever
is later. If the election pursuant to this subsection is not timely made and
the director shall find that the delay was not due to the circumstances set
forth in subsection (e), interest shall be charged and collected commenc-
ing at the expiration of the nine-month period after the decedent's death.
  Sec. 6.  K.S.A. 1996 Supp. 79-1569 is hereby amended to read as
follows: 79-1569. (a) Subject to the provisions of subsection (b), Property
of which a decedent died seized or possessed, subject to the taxes imposed
by this act, in whatever form of investment it may happen to be shall be
charged with a lien for all taxes, penalty and interest thereon which are
or may become due on such property; but the lien shall not affect any
property after it has been sold or disposed of for value by the executors
or administrators in accordance with law, and no consent to transfer is-
sued by the director shall be required to release such lien, but in all such
cases a lien shall attach to the proceeds realized from any such sale or
other disposition for all taxes and interest thereon which are or may be
due on such property. That portion of the decedent's property which is
used for the payment of charges against the estate and expenses of its
administration, allowed by any court having jurisdiction thereof, shall be
divested of such lien. The lien on any property subject to the inheritance
tax act by virtue of the provisions of this subsection shall be divested after
10 years from the date of the decedent's death.
  (b)  If the taxes imposed under this act are not paid when due, the
spouse, transferee, surviving tenant, person in possession of the property
by reason of the exercise, nonexercise, or release of a power of appoint-
ment, or beneficiary, who receives, or has on the date of the decedent's
death, property included in the gross estate under K.S.A. 79-1548 through
79-1553 and 79-1555 through 79-1557, and amendments thereto, to the
extent of the value of such property at the time of the decedent's death
shall be personally liable for such tax. Any part of such property trans-
ferred by, or transferred by a transferee of, such spouse, transferee, trus-
tee, surviving tenant, person in possession, or beneficiary to a purchaser
or holder of a security interest shall be divested of the lien provided for
in subsection (a) and a similar lien shall then attach to all the property of
such spouse, transferee, trustee, surviving tenant, person in possession,
beneficiary or transferee of any such person, except any part transferred
to a purchaser or a holder of a security interest.
  (c)  Upon issuance of a receipt for taxes paid pursuant to subsection
  (d)(5) of K.S.A. 79-1564 and amendments thereto to a personal repre-
sentative who has paid the taxes imposed by this act or an approved
application for stay filed pursuant to subsection (d)(1) of K.S.A. 79-1564
and amendments thereto, the personal representative shall be subrogated
to the right to proceed against any real or personal property in which a
distributee has an interest which the state might have had. The issuance
of a receipt for taxes paid by the director after payment of the taxes or
approved application for stay shall be deemed an assignment by the state
to the personal representative of the right to proceed against the real and
personal property in which a distributee has an interest and shall be con-
clusive evidence thereof. A right to proceed shall arise and a lien shall be
perfected to aid the personal representative in the right to proceed against
property of a distributee only if the personal representative files a notice
of lien with the register of deeds. The lien shall be effective only against
property of a distributee located in the county where the notice of lien is
filed. Such notice of lien may be filed in any county wherein any real or
personal property in which the distributee has an interest is located. The
notice of lien shall be made on forms prescribed by the secretary. Upon
satisfaction of the lien, a release shall be issued by such personal repre-
sentative on forms prescribed by the secretary.
  (d)  If the personal representative has requested and received a re-
fund of taxes paid pursuant to subsection (d)(4) of K.S.A. 79-1564, and
amendments thereto, or whenever the personal representative fails to
collect the tax pursuant to subsection (d)(4) of K.S.A. 79-1564, and
amendments thereto, or is not required to pay the tax imposed by this
act or the taxes imposed by this act are not paid at the expiration of nine
months after the death of the decedent,
  (b)  If the personal representative fails to timely pay the tax imposed
by section 1, the director shall enforce the director's lien by the issuance
of a warrant under the director's hand and official seal, directed to the
sheriff of any county of the state, commanding such sheriff to levy upon
and sell the real and personal property of the distributee estate found
within the sheriff's county for the payment of the amount thereof, with
the added interest and the cost of executing the warrant, and to return
such warrant to the director and pay to the director the money collected
by virtue thereof not more than 60 days from the date of the warrant.
The sheriff shall within five days after the receipt of the warrant, file with
the clerk of the district court of the sheriff's county a copy thereof, and
thereupon the clerk shall enter in the appearance docket in appropriate
columns, the name of the distributee estate named in the warrant, the
amount of the tax or portion thereof and interest for which the warrant
is issued and the date such copy is filed. The amount of such warrant so
docketed shall thereupon become a lien upon the title to, and interest in,
the real property of the distributee estate against whom it is issued in the
same manner, as a judgment duly docketed in the office of such clerk.
The sheriff shall proceed in the same manner and with like 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
the sheriff's 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. In the discretion of the director, a warrant of like
terms, force and effect may be issued and directed to any officer or em-
ployee of the director, and in the execution thereof such officer or em-
ployee shall have all the powers conferred by laws upon sheriffs, and the
subsequent proceedings thereunder shall be the same as provided where
the warrant is issued directly to the sheriff. The distributee estate shall
have the right to redeem the real estate within a period of 18 months
from the date of such sale. If a warrant be returned, unsatisfied in full,
the director shall have the same remedies to enforce the claim for taxes
as if the state of Kansas had recovered judgment against the distributee
for the amount of the tax. No law exempting any goods and chattels, land
and tenements from forced sale under execution shall apply to a levy and
sale under any such warrants or upon any execution issued upon any
judgment rendered in any action for inheritance taxes. The director shall
have the right at any time after the warrant has been returned unsatisfied
or satisfied only in part, to issue alias warrants until the full amount of
the tax is collected.
  Sec. 7.  K.S.A. 1996 Supp. 79-1570 is hereby amended to read as
follows: 79-1570. No final account of a personal representative shall be
allowed by the district court unless such account shows, and the judge of
such court finds, that all taxes imposed by the provisions of this act upon
any property or interest therein belonging to the estate to be settled by
such account and already payable have been paid, and that all taxes which
may become due on such estate have been paid or settled as hereinbefore
provided, or that the payment thereof to the state is secured by bond.
  Sec. 8.  K.S.A. 1996 Supp. 79-1571 is hereby amended to read as
follows: 79-1571. (a) As soon as practicable after the return is filed and
the taxes paid, the director shall issue a closing letter. Such closing letter
shall be issued upon the director being satisfied that there has been a
final determination of all taxes due and that all such taxes have been paid.
The director shall issue such closing letter to the personal representative,
and when the estate is involved in probate proceedings before a district
court, a copy of such closing letter shall be forwarded to the judge of
such court for recording in full in the journal of such court.
  (b)  In the event that all deemed executors do not join in the filing of
a return, or in the event the personal representative is unable to make a
complete return as to any part of the gross estate of the decedent, upon
the director being satisfied that a final determination of the taxes due on
that portion of the estate reported has been made and all taxes due
thereon have been paid, the director shall issue a closing letter as to that
portion of the gross estate which has actually been reported.
  (c)  The closing letter shall be applicable only to assets reported in the
return filed with the director. To the extent the gross assets of the de-
cedent were reported, the issuance of a closing letter shall be conclusive
evidence that all taxes have been determined and paid and shall release
any lien which attached to the decedent's property and that of any
deemed executor or distributee unless such lien has been subrogated,
assigned and perfected pursuant to K.S.A. 79-1569, and amendments
thereto. The closing letter may contain a legal description of the real
property so reported.
  (d)  Release of the lien imposed by K.S.A. 79-1569, and amendments
thereto, may be provided by filing notice of release in the office of the
register of deeds in any county where any such real property included in
the gross estate is located or, when the estate is involved in proceedings
before the district court, with the court. Any such notice of release shall
be in such form as prescribed by the secretary and may include use of or
reference to the closing letter issued by the director or may be included
as part of that closing letter.
  Sec. 9.  K.S.A. 1996 Supp. 79-1572 is hereby amended to read as
follows: 79-1572. (a) Assets belonging to the estate of a deceased non-
resident, other than intangible assets of a decedent who at the time of
death resided in the United States but outside this state, shall not be
delivered or transferred to a foreign personal representative of such de-
cedent without serving notice upon the director of taxation of the time
and place of such intended delivery or transfer at least seven days before
the time of such delivery or transfer. The director or the director's rep-
resentative may examine such assets prior to the time of such delivery or
transfer. Failure to serve such notice or to allow such examination or the
making of a delivery or transfer of such assets against the objection of the
director shall render the person, association, or corporation making the
delivery or transfer liable for the payment of the tax and interest due
upon such assets, in an action brought by the department of revenue in
the name of the state.
  (b)  A foreign or Kansas person, corporation, partnership or other as-
sociation of persons may release or transfer intangible assets of a nonres-
ident decedent upon receipt of a sworn affidavit from the personal rep-
resentative of the decedent's estate, stating that the decedent was not a
resident of the state of Kansas at the time of the decedent's death but
that such decedent was a resident of another state in the United States.
  Sec. 10.  K.S.A. 1996 Supp. 79-1574 is hereby amended to read as
follows: 79-1574. (a) Except as otherwise provided in this section, the
amount of any tax imposed by this act shall be assessed within three years
after the return or affidavit was filed, whether or not such return was
filed on or after the date prescribed, or the tax as shown to be due on
such return was paid, whichever is the later date, and no proceedings in
court for the collection of such taxes shall be begun after the expiration
of such period. Where the assessment of any inheritance tax imposed
under this act has been made within the period of limitation properly
applicable thereto, such tax may be collected by distraint or by a pro-
ceeding in court, but only if begun within one year after the period of
limitation as provided in this act. The foregoing provisions of this section
shall not apply in those cases where the time for the payment of the tax
has been extended pursuant to K.S.A. 79-1544 or 79-1567, and amend-
ments thereto. In those cases where the director has retained jurisdiction
over the estate pursuant to K.S.A. 79-1544, and amendments thereto,
assessment of taxes or proceedings to collect taxes must be made or com-
menced within three years after notice of the death of the life tenant. In
those cases where a bond has been given guaranteeing the payment of
the tax pursuant to K.S.A. 79-1567, and amendments thereto, assessment
of taxes or proceedings for collection of the tax must be made or com-
menced within three years after the date of the expiration of the last bond
so given.
  (b)  For the purposes of this section, a return of tax required under
this act filed before the last day prescribed by law shall be deemed to be
filed on such last day and any tax shown to be due on such return and
paid before the last day prescribed by law shall be deemed to be paid on
such last day.
  (c)  In the case of a false or fraudulent return or affidavit with intent
to evade tax or in the case of failure to file a return, the tax may be
assessed, or a proceeding in court for collection of such tax may be begun
at any time. If the personal representative omits from the gross estate
items includable in such gross estate as exceed 25% of the gross estate
stated in the return or affidavit, the tax may be assessed or a proceeding
in court for collection of such tax may be begun at any time within six
years after the return or affidavit was filed. In determining the items
omitted from the gross estate, there shall not be taken into account any
item which is omitted from the gross estate if such item is disclosed in
the return or affidavit, or in a statement attached to the return or affidavit,
in a manner adequate to apprise the director of the nature and amount
of such item.
  (d)  No refund or credit shall be allowed by the director after three
years from the date the return was filed, or one year after an assessment
is made, whichever is the later date, unless before the expiration of such
period a claim therefor is filed by the personal representative.
  (e)  In case a personal representative has made claim for a refund,
such personal representative shall have the right to commence a suit for
the recovery of the same at the expiration of six months after the filing
of the claim for refund, if no action has been taken by the director.
  (f)  Any personal representative of an estate of a decedent who has
been notified of any adjustment by the internal revenue service shall
notify the director within 90 days of the date such adjustment is agreed
to or becomes final between the estate and the internal revenue service.
Such adjustments shall be reported by filing an amended return and a
copy of the revenue agent's report detailing such adjustments, along with
any other statements or documents as may be necessary to explain and
support the adjustments.:
  (1)  Notwithstanding the provisions of subsections (a) or (d), addi-
tional tax may be assessed and proceedings in court for collection of such
taxes may be commenced and any refund or credit may be allowed by
the director of taxation within 180 days following receipt of any such
report of adjustments by the Kansas department of revenue. No assess-
ment shall be made nor shall any refund or credit be allowed under the
provisions of this paragraph except to the extent the same is attributable
to changes in the estate due to adjustments indicated by such report.
  (2)  In the event of failure to comply with the provisions of this sub-
section, the statute of limitations shall be tolled.
  Sec. 11.  K.S.A. 1996 Supp. 79-1575 is hereby amended to read as
follows: 79-1575. As soon as practicable after the return or affidavit is
filed, the director shall make an examination thereof and determine the
correct amount of the tax liability. If the tax found due is less than the
amount paid, the excess paid shall be refunded to the personal represen-
tative who paid the tax, except that no refund of an amount of $25 or less
shall be made. If the tax found due shall be greater than the amount
theretofore paid, or if a claim for a refund is denied, notice shall be mailed
to the person filing the return by registered or certified mail. Within 30
days after the mailing of the notice any personal representative aggrieved
by any such determination of the director may request a hearing of the
director relating to the tax liability by filing a written request with the
director. The hearing shall be conducted in accordance with the provi-
sions of the Kansas administrative procedure act. An order finding addi-
tional tax shall be accompanied by a notice and demand for payment. The
tax shall be paid within 30 days thereafter, together with interest on the
additional tax from the date the tax was due unless an appeal is taken in
the manner provided by K.S.A. 74-2438, and amendments thereto. No
additional tax shall be assessed for less than $25.
  Sec. 12.  K.S.A. 1996 Supp. 79-1576 is hereby amended to read as
follows: 79-1576. Subject to the right of any personal representative to
apply for review as provided for in this act, the director shall hear and
determine all questions relative to such tax. The attorney for the director,
at the request of the director, shall represent the state in any court pro-
ceedings brought to review any action of the director. If any district court
shall find that any such tax remains due and that proper proceedings have
not been taken before the director for abatement thereof, it shall order
the personal representative to pay the same, with interest, and costs, and
no question regarding the validity of such tax shall be heard in such court.
If it appears that there are no goods or assets of the estate in the personal
representative's hands, the court may assess the amount of the tax against
the personal representative, as if for the personal representative's own
debt, and may enforce compliance with such order; but the personal
representatives shall be personally liable only for such taxes as shall be
payable while they continue in such offices or have custody or control of
decedent's property. In the cases where the tax is due and payable by and
collectible from the distributee, all actions shall be prosecuted by the
attorney for the director in the name of the state, and such actions may
be brought in the same courts as other actions for money.
  Sec. 13.  K.S.A. 1996 Supp. 79-1579 is hereby amended to read as
follows: 79-1579. A refund clearing fund, designated inheritance estate
tax abatement refund, not to exceed $50,000 shall be set apart and main-
tained by the director of taxation from inheritance estate tax collections
and held by the state treasurer for the prompt payment of all abatements
and refunds. If the director of taxation finds that a claim for refund duly
filed by a personal representative pursuant to K.S.A. 79-1564(d)(4), 79-
1574(d) or 79-1575, and amendments thereto, should be allowed, or if a
court upon a final judgment shall find that the inheritance estate tax,
penalty or interest paid by a personal representative is in excess of the
amount legally due, then the director of taxation shall issue the director's
vouchers to the director of accounts and reports for the refund to the
personal representative of such tax, penalty or interest together with in-
terest provided for hereinafter. Upon receipt of such voucher properly
executed and endorsed, the director of accounts and reports shall issue
the director's warrants to the state treasurer for the payment to the per-
sonal representative out of the inheritance estate tax abatement refund
fund. The director of taxation shall file a duplicate of such voucher and
also a statement which shall set forth the reasons why such abatement or
refund was allowed. Upon the allowance of an abatement or refund of
any tax or interest paid, interest shall be allowed and paid on the amount
of such abatement or refund at the rate of 12% per annum from the date
such tax, penalty or interest was paid to the date the refund or abatement
of inheritance estate taxes is made. No refunds in an amount of less than
$25 shall be made.
  Sec. 14.  K.S.A. 1996 Supp. 79-1580 is hereby amended to read as
follows: 79-1580. (a) The director of taxation shall fix and charge an
amount pursuant to K.S.A. 45-218 and 45-219, and amendments thereto
for furnishing certified copies of returns or affidavits.
  (b)  All fees collected hereunder shall be remitted to the state treas-
urer at least monthly. Upon receipt of each such remittance, the state
treasurer shall deposit the entire amount thereof in the state treasury and
the same shall be credited to the state general fund.
  Sec. 15.  K.S.A. 79-1587 is hereby amended to read as follows: 79-
1587. (a) All reports and returns required under the provisions of the
Kansas inheritance estate tax act shall be preserved for three years and
thereafter until the director of taxation orders them to be destroyed.
  (b)  Except in accordance with proper judicial order, or as provided
in subsection (c) of this section, subsection (g) of K.S.A. 17-7511, and
amendments thereto, or 46-1106, and amendments thereto, it shall be
unlawful for the director of taxation, or any deputy, agent, clerk or other
officer, employee or former employee of the department of revenue or
any other state officer or employee or former state officer or employee
to divulge, or to make known in any way, the value of any estate or any
particulars set forth or disclosed in any report, return, federal return or
federal return information required under the provisions of the Kansas
inheritance estate tax act; and it shall be unlawful for the director of
taxation, any deputy, agent, clerk or other officer or employee of the
department of revenue engaged in the administration of the Kansas in-
heritance estate tax act to engage in the business or profession of tax
accounting or to accept employment, with or without consideration, from
any person, firm or corporation for the purpose, directly or indirectly, of
preparing tax returns or reports required by the laws of the state of Kan-
sas, by any other state or by the United States government, or to accept
any employment for the purpose of advising, preparing material or data,
or the auditing of books or records to be used in an effort to defeat or
cancel any tax or part thereof that has been assessed by the state of Kan-
sas, any other state or by the United States government.
  (c)  Nothing herein shall be construed to prohibit the publication of
statistics, so classified as to prevent the identification of particular reports
or returns and the items thereof, or the inspection of returns by the
attorney general or other legal representatives of the state. Nothing in
this section shall prohibit the post auditor from access to all inheritance
estate tax reports or returns in accordance with and subject to the pro-
visions of subsection (g) of K.S.A. 46-1106, and amendments thereto.
Nothing in this section shall be construed to prohibit the disclosure of
the taxpayer's name, social security number, last known address and total
tax liability, including penalty and interest, from inheritance estate tax
returns to a debt collection agency contracting with the secretary of rev-
enue pursuant to K.S.A. 75-5140 to 75-5143, inclusive, and amendments
thereto. Any person receiving any information under the provisions of this
subsection shall be subject to the confidentiality provisions of subsection
  (b) of this section and to the penalty provisions of subsection (d) of this
section.
  (d)  Any violation of subsections (b) or (c) of this section shall be a
class B misdemeanor; and if the offender be an officer or employee of
the state, such officer or employee shall be dismissed from office.
  (e)  Notwithstanding the provisions of this section, the secretary of
revenue may permit the commissioner of internal revenue of the United
States, or the proper official of any state imposing an inheritance or estate
tax, or the authorized representative of either, to inspect the inheritance
estate tax returns made under the provisions of the Kansas inheritance
estate tax act and the secretary of revenue may make available or furnish
to the taxing officials of any other state or the commissioner of internal
revenue of the United States or other taxing officials of the federal gov-
ernment, or their authorized representatives, information contained in
inheritance tax reports or returns or any audit thereof or the report of
any investigation made with respect thereto, filed pursuant to the Kansas
inheritance estate tax act, as the secretary may consider proper, but such
information shall not be used for any other purpose than that of the
administration of tax laws of such state, the state of Kansas or of the
United States.
  (f)  Notwithstanding the provisions of this section, the inheritance es-
tate tax return filed with respect to the estate of a decedent shall, upon
written request, be open to inspection by or disclosure to: (1) The ad-
ministrator, executor or trustee of such decedent's estate,; and (2) any
heir at law, next of kin or beneficiary under the will of such decedent or
a donee or distributee of the decedent's property, but only if the secretary
of revenue finds that such heir at law, next of kin, beneficiary, donee or
distributee has a material interest which will be affected by information
contained therein.
  New Sec. 16.  This act and the provisions of article 15 of chapter 79
of the Kansas Statutes Annotated not repealed by this act shall be known
and may be cited as the Kansas estate tax act.
  New Sec. 17.  The provisions of this act shall be applicable to the
estates of all decedents dying after December 31, 1996. The provisions
of article 15 of chapter 79 of the Kansas Statutes Annotated in effect
immediately before the effective date of this act shall be applicable to the
estates of all decedents dying before January 1, 1997.
  Sec. 18.  K.S.A. 79-1538, 79-1548, 79-1554, 79-1557, 79-1566, 79-
1584, 79-1584a, 79-1584b, 79-1584c, 79-1585, 79-1586 and 79-1587 and
K.S.A. 1996 Supp. 79-1537, 79-1537b, 79-1537c, 79-1537e, 79-1537f, 79-
1538a, 79-1539, 79-1540, 79-1541, 79-1541a, 79-1541b, 79-1542, 79-
1542a, 79-1543, 79-1545, 79-1547, 79-1549, 79-1550, 79-1551, 79-1552,
79-1553, 79-1555, 79-1556, 79-1557a, 79-1559, 79-1560, 79-1561, 79-
1562, 79-1563, 79-1563a, 79-1564, 79-1565, 79-1567, 79-1567a, 79-1568,
79-1569, 79-1570, 79-1571, 79-1572, 79-1573, 79-1574, 79-1575, 79-
1576, 79-1579 and 79-1580 are hereby repealed.
  Sec. 19.  This act shall take effect and be in force from and after
January 1, 1997, and its publication in the statute book.