SENATE BILL No. 11

An Act concerning retirement and pensions; relating to the Kansas public employees re-
tirement system and systems thereunder; making appropriations for the fiscal year end-
ing June 30, 1999, for the Kansas public employees retirement system; amending K.S.A.
20-2601a, 20-2606, as amended by section 17 of 1998 Senate Bill No. 382, 20-2609, 20-
2610, 20-2620, as amended by section 20 of 1998 Senate Bill No. 382, 72-5501, as
amended by section 22 of 1998 Senate Bill No. 382, 74-4919i, as amended by section
45 of 1998 Senate Bill No. 382, 74-4924 and 74-4955a and K.S.A. 1998 Supp. 20-2601,
as amended by section 15 of 1998 Senate Bill No. 382, 46-2201, 74-4902, as amended
by section 26 of 1998 Senate Bill No. 382, 74-4904, 74-4905, 74-4907, 74-4908, 74-
4910, 74-4911, as amended by section 28 of 1998 Senate Bill No. 382, 74-4913, as
amended by section 33 of 1998 Senate Bill No. 382, 74-4914, 74-4914e, 74-4917, 74-
4919a, as amended by section 38 of 1998 Senate Bill No. 382, 74-4919h, as amended
by section 44 of 1998 Senate Bill No. 382, 74-4919n, as amended by section 49 of 1998
Senate Bill No. 382, 74-4919p, 74-4919q, 74-4920, 74-4921, 74-4927, as amended by
section 53 of 1998 Senate Bill No. 382, 74-4936a, as amended by section 63 of 1998
Senate Bill No. 382, 74-4937, 74-4939, 74-4952, as amended by section 65 of 1998
Senate Bill No. 382, 74-4956, as amended by section 68 of 1998 Senate Bill No. 382,
74-4957, 74-4957a, 74-4960, as amended by section 72 of 1998 Senate Bill No. 382, 74-
4960a, as amended by section 73 of 1998 Senate Bill No. 382, 74-4963, as amended by
section 75 of 1998 Senate Bill No. 382, 74-4963a, as amended by section 76 of 1998
Senate Bill No. 382, 74-4966, 74-4988, 74-4990 and 74-4992 as amended by section 87
of 1998 Senate Bill No. 382, and repealing the existing sections.

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

    Section 1. K.S.A. 1997 Supp. 20-2601, as amended by section 15 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 20-2601.
As used in K.S.A. 20-2601 et seq. and amendments thereto, unless the
context otherwise requires:

    (a) ``Fund'' means the Kansas public employees retirement fund cre-
ated by K.S.A. 74-4921 and amendments thereto;

    (b) ``retirement system for judges'' means the system provided for in
the acts contained in article 26 of chapter 20 of the Kansas Statutes An-
notated and any acts amendatory thereof or supplemental thereto;

    (c) ``judge'' means any duly elected or appointed justice of the su-
preme court, judge of the court of appeals or judge of any district court
of Kansas, who serves in such capacity on and after the effective date of
this act and commencing with the first day of the first payroll period of
the fiscal year ending June 30, 1994, any district magistrate judge who
makes an election as provided in K.S.A. 20-2620 and amendments thereto
or who is elected or appointed on or after July 1, 1993;

    (d) ``member'' means a judge who is making the required contribu-
tions to the fund, or any former judge who has made the required con-
tributions to the fund and has not received a refund of the judge's ac-
cumulated contributions;

    (e) ``prior service'' means all the periods of time any judge has served
in such capacity prior to the effective date of this act except that district
magistrate judges who have service credit under the Kansas public em-
ployees retirement system must make application to the board and, sub-
ject to the provisions of section 83 and amendments thereto, make pay-
ment as required by the board to transfer service credit from the Kansas
public employees retirement system to the retirement system for judges;

    (f) ``current service'' means the period of service any judge serves in
such capacity from and after the effective date of this act;

    (g) ``military service'' means service of any judge for which retirement
benefit credit must be given as provided in the uniformed services em-
ployment and reemployment rights act of 1994, as in effect on July 1,
1998;

    (h) ``total years of service'' means the total number of years served as
a judge, including prior service, military service and current service as
defined by this section, computed to the nearest quarter;

    (i) ``salary'' means the statutory salary of a judge;

    (j) ``final average salary'' means that determined as provided in sub-
section (b) of K.S.A. 20-2610 and amendments thereto;

    (k) ``beneficiary'' means any natural person or persons or estate des-
ignated by a judge in the latest designation of beneficiary received in the
retirement system office to receive any benefits as provided for by this
act. Except as provided in subsection (n), if there is no named beneficiary
living at the time of the judge's death, any benefits provided for by this
act shall be paid to: (1) The judge's surviving spouse; (2) the judge's
dependent child or children; (3) the judge's dependent parent or parents;
(4) the judge's nondependent child or children; (5) the judge's nonde-
pendent parent or parents; or (6) the estate of the deceased member; in
the order of preference as specified in this subsection. Any payment made
to a named beneficiary shall be a full discharge and release to the system
from any further claims. Any payment made to a beneficiary as provided
in clauses (1), (2), (3), (4), (5) or (6) of this subsection, as determined by
the board, shall be a full discharge and release to the system from any
further claims. Whenever any payment is payable to more than one ben-
eficiary such payment shall be made to such beneficiaries jointly. Any
benefits payable to a beneficiary or beneficiaries who are minor children
or incompetent persons shall be made in the name of the beneficiary or
beneficiaries and delivered to the lawfully appointed conservator of such
beneficiaries who was nominated by will or as otherwise provided by law,
except that in those cases where the benefit involves only the payment of
the judge's accumulated contributions with interest as provided by this
act in an amount not to exceed $500, the board is hereby authorized in
its discretion without the appointment of a conservator or the giving of a
bond to pay such amount as is due to the minor or minors themselves,
any payment so made shall be a full discharge and release to the system
from any further claims. Designations of beneficiaries by a member who
is a member of more than one retirement system made on or after July
1, 1987, shall be the basis of any benefits payable under all systems unless
otherwise provided by law;

    (l) ``annuity'' means a series of equal monthly payments, payable at
the end of each calendar month during the life of a retired judge, of
which payments the first payment shall be made as of the end of the
calendar month in which such annuity was awarded and the last payment
shall be at the end of the calendar month in which such judge dies. The
first payment shall include all amounts accrued since the effective date
of the award of annuities, including a pro rata portion of the monthly
amount of any fraction of a month elapsing between the effective date of
such annuity and the end of the calendar month in which such annuity
began;

    (m) ``board'' means the board of trustees of the Kansas public em-
ployees retirement system;

    (n) ``trust'' means an express trust created by any trust instrument,
including a will, and designated by a member to receive benefits and other
amounts payable under K.S.A. 20-2607, 20-2610a and 20-2612, and
amendments thereto, instead of a beneficiary. A designation of a trust
shall be filed with the board. If there is a designated trust at the time of
the member's death, all benefits and other amounts payable under K.S.A.
20-2607, 20-2610a and 20-2612, and amendments thereto, shall be paid
to the trust instead of the member's beneficiary. If no will is admitted to
probate within six months after the death of the member or no trustee
qualifies within such six months or if the designated trust fails, for any
reason whatsoever, any benefits and other amounts payable under K.S.A.
20-2607, 20-2610a and 20-2612, and amendments thereto, shall be paid
to the member's beneficiary and any payments so made shall be a full
discharge and release to the retirement system for judges from any fur-
ther claims;

    (o) ``accumulated contributions'' means the sum of all contributions
by a member to the retirement system for judges which are credited to
the member's account, with interest allowed thereon after June 30, 1982;

    (p) ``federal internal revenue code'' means the federal internal reve-
nue code of 1954 or 1986, as in effect on July 1, 1998, and as applicable
to a governmental plan; and

    (q) except as otherwise provided in K.S.A. 20-2601 et seq. and
amendments thereto, words and phrases used in K.S.A. 20-2601 et seq.
and amendments thereto shall have the same meanings ascribed to them
as are defined in K.S.A. 74-4902 and amendments thereto.

    Sec. 2. K.S.A. 20-2601a is hereby amended to read as follows: 20-
2601a. (a) On and after July 1, 1975, the Kansas judges retirement board
established pursuant to K.S.A. 20-2604 and amendments thereto shall be
and is hereby abolished, and on said such date, except as otherwise pro-
vided in this act, all of the powers, duties and functions of said Kansas
judges retirement board, whether in its capacity as that board pursuant
to K.S.A. 20-2604 and amendments thereto or in its capacity as the Kansas
official court reporters retirement board pursuant to K.S.A. 20-2704, shall
be and are hereby transferred to and conferred and imposed upon the
board of trustees of the Kansas public employees retirement system.

    (b) Except as otherwise provided in this act, the board of trustees of
the Kansas public employees retirement system shall be the successor in
every way to the powers, duties and functions of the Kansas judges re-
tirement board, whether in its capacity as that board pursuant to K.S.A.
20-2604 and amendments thereto or in its capacity as the Kansas official
court reporters retirement board pursuant to K.S.A. 20-2704, in which
the same were vested prior to July 1, 1975. Every act performed in the
exercise of such powers, duties and functions by or under the authority
of the board of trustees of the Kansas public employees retirement system
shall be deemed to have the same force and effect as if performed by the
Kansas judges retirement board in which such powers, duties and func-
tions were vested prior to July 1, 1975.

    (c) On and after July 1, 1975, whenever the Kansas judges retirement
board, or words of like effect, is referred to or designated by a statute or
contract or other document, such reference or designation shall be
deemed to apply to the board of trustees of the Kansas public employees
retirement system.

    (d) On and after July 1, 1975, whenever the Kansas official court
reporters retirement board, or words of like effect, is referred to or des-
ignated by a statute or contract or other document, such reference or
designation shall be deemed to apply to the board of trustees of the
Kansas public employees retirement system.

    (e) The board of trustees of the Kansas public employees retirement
system shall adopt rules and regulations necessary for the administration
of the retirement system for judges and for the transaction of business
consistent with law. All rules or regulations of the Kansas judges retire-
ment board in existence on July 1, 1975, whether adopted when acting
as that board pursuant to K.S.A. 20-2604 and amendments thereto or
when acting as the Kansas official court reporters retirement board pur-
suant to K.S.A. 20-2704, shall continue in force and effect and shall be
deemed to be duly adopted rules or regulations of the board of trustees
of the Kansas public employees retirement system, until revised,
amended, revoked or nullified pursuant to law.

    (f) All decisions and determinations of the Kansas judges retirement
board in effect on July 1, 1975, whether made when acting as that board
pursuant to K.S.A. 20-2604 and amendments thereto or when acting as
the Kansas official court reporters retirement board pursuant to K.S.A.
20-2704, shall continue in force and effect and shall be deemed to be
decisions and determinations of the board of trustees of the Kansas public
employees retirement system, until revised, amended, revoked or nulli-
fied pursuant to law.

    Sec. 3. K.S.A. 20-2606, as amended by section 17 of 1998 Senate Bill
No. 382, is hereby amended to read as follows: 20-2606. (a) Any judge
whose service is terminated prior to retirement, for any cause other than
death, may, upon written request to the board and after 30 days after
such termination, may have returned the total amount of accumulated
contributions which the judge has made to the fund after the retirement
system for judges has a reasonable time to process the application for
withdrawal. The return of accumulated contributions to a judge shall pre-
clude that judge from any benefits under the retirement system for judges
unless and until that judge again serves in such capacity.

    (b) Any incumbent judge over 70 years of age with a total service of
at least eight years at the time the judge's present term of office expires,
or at the time of retirement if the judge retires before the end of the
judge's present term, shall receive retirement annuities as provided in
K.S.A. 20-2608, 20-2609 and 20-2610, and any amendments thereto, un-
less the judge requests the return of accumulated contributions under
this section.

    (c) In case any judge, who has had such judge's accumulated contri-
butions returned under this section, serves again in such capacity, such
judge may return, subject to the provisions of section 83 and amendments
thereto, the amount refunded under this section without interest or pen-
alty and regain such judge's original status under the retirement system
for judges.

    (d) Subject to the provisions of section 83 and amendments thereto,
any member of the retirement system for judges who was previously a
member of the Kansas public employees retirement system or the Kansas
police and firemen's retirement system and who forfeited service credit
under either of those systems by reason of termination of employment
and withdrawal of their contributions to that system, may elect to pur-
chase service credit for the previously forfeited service credit by means
of having employee contributions as provided in K.S.A. 20-2603 and
amendments thereto deducted from such judge's compensation at an ad-
ditional rate of contribution, based upon such judge's attained age at the
time of purchase and using actuarial assumptions and tables in use by the
retirement system at such time of purchase for such periods of service.
Such additional rate of contribution shall commence at the beginning of
the quarter following such election and shall remain in effect until all of
the full quarters of such service have been purchased. Such member may
purchase such service by means of a single lump-sum payment and in lieu
of employee contributions as provided in this subsection. Such service
shall be recredited to that system. The amount of the lump-sum payment
shall be determined by the actuary using the member's then current an-
nual rate of compensation and, the actuarial assumptions and tables then
currently in use by that retirement system and the judge's attained age.

    Sec. 4. K.S.A. 20-2609 is hereby amended to read as follows: 20-
2609. (a) Any judge who has become permanently physically or mentally
disabled and who is not entitled to retire under K.S.A. 20-2608 and
amendments thereto may, upon being found so disabled by the supreme
court, retire under this section, and upon such retirement such judge
shall be entitled to receive an annuity, each monthly payment of which
shall be in an amount equal to 3.5% of the final average salary of the
judge, determined as provided in subsection (b) of K.S.A. 20-2610 and
amendments thereto, multiplied by the number of total years of service,
but for any judge who becomes disabled as provided in this section on or
after July 1, 1998, such monthly benefits shall be at least 25% 50% but
shall not exceed 70% of the final average salary of the judge, determined
as provided in subsection (b) of K.S.A. 20-2610 and amendments thereto.

    (b) Any judge, or the conservator of any judge, desiring to retire un-
der the provisions of this section shall file an application for such retire-
ment with the clerk of the supreme court, which application shall be in
such form and contain such information as the supreme court shall re-
quire. The court may require such judge to be examined by a physician
appointed by the court and may require such other evidence and proof
of disability as it deems necessary to reach a determination as to whether
such judge is so permanently disabled. If the supreme court shall deter-
mine that any such judge is so permanently disabled it shall promptly
notify the board and thereupon such judge shall be placed on retirement
by the board and monthly receive the retirement annuity as provided in
this section.

    (c) Any judge receiving an annuity under the provisions of this section
shall be considered an active judge for the purposes of K.S.A. 20-2608
and amendments thereto and shall, upon reaching age 65 or upon making
application for retirement, have such judge's retirement under this sec-
tion terminated and such judge shall be placed on retirement under the
provisions of K.S.A. 20-2608 and amendments thereto.

    (d) In the event that a judge eligible for a disability annuity authorized
by this section shall be disabled for a period of five years or more im-
mediately preceding retirement, such judge's final average salary shall be
adjusted upon retirement by the actuarial salary assumption rates in ex-
istence during such period of disability. Effective July 1, 1993, such
judge'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 judge's final average salary shall be adjusted upon
retirement by an amount equal to the lesser of: (1) The percentage in-
crease 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 (2) four percent per annum, measured from the month the
disability occurs to the month that is two months prior to the month of
retirement, for each year of disability after July 1, 1998.

    (e) The provisions of law in effect on the retirement date of a judge
under the retirement system for judges shall govern the retirement ben-
efit payable to the judge, any joint annuitant and any beneficiary.

    Sec. 5. K.S.A. 20-2610 is hereby amended to read as follows: 20-
2610. (a) (1) A judge who retires under K.S.A. 20-2608, and amendments
thereto, shall be entitled to receive an annual annuity payable in monthly
amounts subject to subsection (b), each monthly payment such annual
annuity of which shall be in an amount equal to the total of 5% of the
final average salary of the judge, determined as provided in subsection
(b), multiplied by the number of the judge's years of service up to 10
years, and 3.5% of the final average salary of the judge, determined as
provided in subsection (b), multiplied by the number of the judge's years
of service in excess of 10 years, but such monthly benefits annual annuity
shall not exceed 70% of the final average salary of such judge, determined
as provided in subsection (b). A judge who retires under K.S.A. 20-2608
and amendments thereto, and who became a member of the system after
June 30, 1987, shall be entitled to receive an annual annuity payable in
monthly amounts subject to subsection (b), each monthly payment such
annual amount of which shall be in an amount equal to the total of 3.5%
of the final average salary of the judge, determined as provided in sub-
section (b), multiplied by the number of the judge's years of service, but
such monthly benefits annual annuity shall not exceed 70% of the final
average salary of the judge, determined as provided in subsection (b).

    (2) For purposes of this subsection, the date of membership for a
district magistrate judge who became a member of the system as provided
by K.S.A. 20-2620 and amendments thereto and who purchased service
as provided in subsection (c) of K.S.A. 20-2620 and amendments thereto
shall be the day such district magistrate judge became a district magistrate
judge and if such district magistrate judge's membership date as deter-
mined in this subsection is earlier than July 1, 1987, such district mag-
istrate judge shall be entitled to the 5% of final average salary calculation
for up to 10 years of service as provided in this subsection. Any additional
cost associated with the provisions of this subsection shall be paid by such
district magistrate judge by means of a single lump-sum payment or equal
annual payments for not to exceed five years. The lump-sum or annual
payments shall be determined by the system's actuary by using the mem-
ber's final average salary at the time of application, actuarial assumptions
and tables currently in use by the system and the member's attained age.
No participating employer shall pay all or any part of any cost associated
with the provisions of this subsection.

    (b) For any judge who retires under K.S.A. 20-2608 or 20-2609, and
amendments thereto, on or after July 1, 1975, the annuity shall be based
on the final average salary of such judge as provided in this subsection.
The final average salary of a judge who becomes permanently physically
or mentally disabled and who is retired under K.S.A. 20-2608 or 20-2609,
and amendments thereto, shall be determined as if such judge had retired
on the date such judge became permanently physically or mentally disa-
bled. The final average salary of a former judge whose service is termi-
nated without retiring and who later retires under K.S.A. 20-2608, and
amendments thereto, shall be determined as if such former judge had
retired at the time such service was terminated.

    In the case of judges who retire on or after July 1, 1993, the final
average salary shall mean the average highest annual salary paid to the
judge for any three years of the last 10 years of service as a judge im-
mediately preceding retirement or termination of employment, or if serv-
ice as a judge is less than three years, then the final average salary shall
be the average annual salary paid to the judge during the full period of
service as a judge, or if service as a judge is less than one year, then the
final average salary shall be computed by multiplying the amount of
monthly salary such judge was receiving at the time of retirement by 12.

    (c) The provisions of law in effect on the retirement date of a judge
under the retirement system for judges shall govern the retirement ben-
efit payable to the judge, any joint annuitant and any beneficiary.

    (d) A judge who retires under K.S.A. 20-2608, and amendments
thereto, and who, after such retirement, again is appointed or elected as
a judge, shall have the judge's retirement annuity suspended as provided
in this subsection. Such judge shall become an active member and make
employee contributions to the system and receive service credit for any
service after the date of commencement of service in such position. Upon
again retiring, any credited service such member subsequently accrues
shall be added to all previous service and the retirement annuity shall be
recalculated in accordance with the provisions of this section.

    Sec. 6. K.S.A. 20-2620, as amended by section 20 of 1998 Senate Bill
No. 382, is hereby amended to read as follows: 20-2620. (a) Except as
otherwise provided, each district magistrate judge holding such position
on the effective date of this act may become a member of the retirement
system for judges on the first day of the payroll period of the fiscal year
ending June 30, 1994, only by filing with the board of trustees of the
Kansas public employees retirement system on or before the first day of
the payroll period of the fiscal year ending June 30, 1994, a written elec-
tion to become a member of the system. Failure to file such written
election shall be presumed to be an election not to become a member of
the system. Such election, whether to become a member or not to be-
come a member, shall be irrevocable. In addition, any such district mag-
istrate judge who makes the election previously provided in this section,
may elect to transfer such district magistrate judge's service credit from
the Kansas public employees retirement system as provided in subsection
(e) of K.S.A. 20-2601 and amendments thereto and subsection (c). The
date of membership for a district magistrate judge who became a member
of the system as provided in this section and who purchased service as
provided in subsection (c) shall be the day that such district magistrate
judge became a district magistrate judge. Such district magistrate judge
shall be subject to the provisions of subsection (a)(2) of K.S.A. 20-2610
and amendments thereto.

    (b) Each person who becomes a district magistrate judge on or after
the effective date of this act shall become a member of the retirement
system for judges on the first day such person holds the position of district
magistrate judge.

    (c) The board of trustees of the Kansas public employees retirement
system shall transfer to the credit of the district magistrate judge under
the retirement system for judges such amounts as may be presently cred-
ited to a district magistrate judge's account for contribution under the
Kansas public employees retirement system and an equivalent amount to
the employer's account for contributions for such district magistrate judge
whenever an application for conversion of service under the Kansas public
employees retirement system is received from a district magistrate judge.
Subject to the provisions of section 83 and amendments thereto, any
district magistrate judge may purchase such service by electing such pur-
chase prior to retirement by means of a single lump-sum payment or
equal annual payments for not to exceed five years. The lump-sum or
annual payments shall be determined by the system's actuary by using
the member's final average salary at the time of application, actuarial
assumptions and tables currently in use by the system and the member's
attained age.

    Sec. 7. K.S.A. 1997 Supp. 46-2201 is hereby amended to read as
follows: 46-2201. (a) On January 1, 1993, there is hereby created the joint
committee on pensions, investments and benefits which shall be com-
posed of five senators and eight members of the house of representatives.
The five senate members shall be the chairperson of the standing com-
mittee on ways and means of the senate, or a member of such committee
appointed by the chairperson, two members appointed by the president
and two members appointed by the minority leader. The eight represen-
tative members shall be the chairperson of the standing committee on
appropriations of the house of representatives, or a member of such com-
mittee appointed by the chairperson, four members appointed by the
speaker and three members appointed by the minority leader.

    (b) All members of the joint committee on pensions, investments and
benefits shall serve for terms ending on the first day of the regular leg-
islative session in odd-numbered years. After June 30 in odd-numbered
years, the chairperson shall be one of the representative members of the
joint committee selected by the speaker and the vice-chairperson shall
be one of the senate members selected by the president. After June 30
in even-numbered years, the chairperson shall be one of the senate mem-
bers of the joint committee selected by the president and the vice-chair-
person shall be one of the representative members of the joint committee
selected by the speaker. The chairperson and vice-chairperson of the joint
committee shall serve in such capacities until July 1 of the ensuing year.
The vice-chairperson shall exercise all of the powers of the chairperson
in the absence of the chairperson.

    (c) The joint committee on pensions, investments and benefits shall
meet at any time and at any place within the state on call of the chair-
person. Members of the joint committee shall receive compensation and
travel expenses and subsistence expenses or allowances as provided in
K.S.A. 75-3212 and amendments thereto when attending meetings of
such committee authorized by the legislative coordinating council.

    (d) In accordance with K.S.A. 46-1204 and amendments thereto, the
legislative coordinating council may provide for such professional services
as may be requested by the joint committee on pensions, investments and
benefits.

    (e) The joint committee on pensions, investments and benefits may
introduce such legislation as deemed necessary in performing such com-
mittee's functions.

    (f) The joint committee on pensions, investments and benefits shall:

    (1) Monitor, review and make recommendations regarding invest-
ment policies and objectives formulated by the board of trustees of the
Kansas public employees retirement system;

    (2) review and make recommendations relating to benefits for mem-
bers under the Kansas public employees retirement system;

    (3) consider and make recommendations to the standing committee
of the senate specified by the president of the senate relating to the
confirmation of members of the board of trustees of the Kansas public
employees retirement system appointed pursuant to K.S.A. 74-4905 and
amendments thereto. On and after July 1, 1993, the information provided
by the Kansas bureau of investigation or other criminal justice agency
pursuant to subsection (h) of K.S.A. 74-4905 and amendments thereto
relating to the confirmation of members of the board to the standing
committee of the senate specified by the president shall be forwarded by
the Kansas bureau of investigation or such other criminal justice agency
to such joint committee for such joint committee's consideration and
other than conviction data, shall be confidential and shall not be disclosed
except to members and employees of the joint committee as necessary to
determine qualifications of such member. The committee, in accordance
with K.S.A. 75-4319 and amendments thereto shall recess for a closed or
executive meeting to receive and discuss information received by the
committee pursuant to this subsection; and

    (4) review and make recommendations to the legislature by the first
day of legislative session commencing in 1997 relating to the implemen-
tation of a permanent policy regarding adjustments in retirement benefit
payments to retirants and disabled members. Such recommendations
should include a review of cost-of-living adjustments, the shared earnings
proposal presented to the 1996 legislature and other mechanisms for pre-
funding adjustments in retirement benefit payments to retirants and dis-
abled members as an alternative to annual cost-of-living adjustments. In
conducting such review the committee may utilize legislative staff, Kansas
public employees retirement system staff, the Kansas public employees
retirement system actuary and other consultants. Any recommendations
shall include actuarially based cost estimates, including an assessment of
the impact on the Kansas public employees retirement system fund's
unfunded actuarial liability; and

    (5) review and make recommendations relating to inclusion of city
and county correctional officers as eligible members of the Kansas police
and firemen's retirement system.

    Sec. 8. K.S.A. 72-5501, as amended by section 22 of 1998 Senate Bill
No. 382, is hereby amended to read as follows: 72-5501. As used in this
act, unless the context otherwise requires:

    (a) ``Retirement system'' means the state school retirement system;

    (b) ``board'' means the board of trustees of the Kansas public em-
ployees retirement system;

    (c) ``school year'' means either the twelve-month period beginning on
September first, or the legal school term during such period. In case of
doubt the board shall decide what constitutes a school year. The board
shall not give credit for a school year that represents less than 140 days,
except that the board may give credit for a school year if not less than 80
days of actual service has been rendered and if continuance in school
service was prevented by illness or other emergency beyond the control
of the person entitled to such credit. No person shall receive credit for
more than one school year during any twelve-month period beginning on
September 1. The board shall give credit for 1/2 of a school year for 1/2
school year of continuous full-time service;

    (d) ``school employees'' means persons who have performed or who
shall hereafter perform school services as classroom teachers, adminis-
trators, supervisors, librarians, nurses, clerks, janitors or in any other full-
time capacity in the public schools, area vocational-technical schools or
community junior colleges of the state of Kansas and who are citizens of
the United States and school employees shall include: (1) Persons who
have performed service as a county superintendent of public instruction
or as an employee appointed by and under the supervision of a county
superintendent; (2) persons who have performed service as a state su-
perintendent of public instruction or as an employee appointed by and
under supervision of a state superintendent; (3) persons who have per-
formed services as an employee appointed by the former state board for
vocational education, except that prior to the time of accepting such em-
ployment by such county superintendent, state superintendent or state
board for vocational education such employees had performed school
service in Kansas as a teacher, principal, supervisor, or superintendent;
(4) persons who are employees appointed by and under the supervision
of the constitutional state board of education, including those employees
transferred to the state department of education at its inception in January
of 1969, and who prior to the time of accepting such employment by the
state board of education had performed school service in Kansas as a
teacher, principal, supervisor, or superintendent; (5) the commissioner of
education if such commissioner exercises an irrevocable option to be cov-
ered by the state school retirement system in lieu of being covered by
the Kansas public employees retirement system, which option shall be
exercised by written notice of the commissioner of education at the time
of appointment. Such notice shall be directed to the state school retire-
ment board and the board of trustees of the Kansas public employees
retirement system; (6) all instructional employees for the school for the
blind and such employees shall be excluded from participation in any
other state retirement system; and (7) teachers and supervisors of instruc-
tion at the state institutions under the management of the director of
penal institutions and those under the management of the state board of
social welfare which provide regular classroom instruction for their in-
mates or patients if such instructional personnel have valid certificates
issued by the state board of education, except that the provisions of this
subsection shall not include such employees who have elected or shall
elect, irrevocably, at the time of employment by the institution to partic-
ipate in the Kansas public employees retirement system. The term
``school employees'' shall not include any employee while a member of a
separate retirement system operated by any board of education but if any
such employee at any time becomes eligible to participate in the state
retirement as provided by this act, the years such person served in a school
system in Kansas which maintains a separate retirement system shall be
included in determining years of service of such person under this act.
An employee performing service in a school system maintaining its own
separate retirement system in Kansas may qualify for service credit in the
state system by discontinuing membership in such separate retirement
system prior to the time of retirement and accepting a position which is
covered by the state retirement system, and continuing in such service
for at least one school year. Subject to the provisions of section 83 and
amendments thereto, such employee shall contribute to the state retire-
ment system an amount of money equal to that which was deducted from
such employee's salary for services rendered after September 1, 1941, in
the city maintaining its own retirement system and this amount shall be
credited to the savings account of the employee. If such employee was
for any reason excluded from participation in the separate retirement
system, the board shall give credit for such nonmember service in the
public schools in the city maintaining a separate retirement system with-
out the required transfer of funds. After September 1, 1971, no person
shall be deemed a school employee for the purposes of this act;

    (e) ``school service'' means: (1) Service performed as a school em-
ployee prior to September 1, 1941, if such years of service include at least
six months during the years 1938-39 or 1939-40 or 1940-41; service per-
formed by any employee who was not in school service in any of the school
years from 1938 to 1941, but who reentered school service after Septem-
ber 1, 1941, and continued in such service for at least five years; all service
prior to September 1, 1941, of any annuitant who retired prior to Sep-
tember 1, 1961, and who was granted a service annuity for one or more
years as a contributing member of the school retirement system; all serv-
ice prior to September 1, 1941, of any employee who served for at least
six months during one of the qualifying years from 1938 to 1941 in a
school system maintaining its own separate retirement system in Kansas,
if such employee has not qualified, nor will in the future qualify, for
retirement benefits under the separate retirement system; all service as
a school employee, including out-of-state service as a school employee,
for a period of 12 10 or more years prior to September 1, 1938, except
that service annuities paid by the state of Kansas to such school employees
shall not include such out-of-state service as a school employee, unless
otherwise provided by law; (2) service as a school employee after Septem-
ber 1, 1941, as a contributing member of the school retirement system.
No service credit shall be granted to a school employee who established
or shall hereafter establish membership later than September 1, 1941,
for a period of time between September 1, 1941, and the date of becom-
ing a contributing member of the retirement system. School service shall
include only full-time employees, except that 1/2 year of credit shall be
given to instructional employees who perform school service on at least
a 1/2 time basis throughout a school year. No school service credit shall
be given in fractional units of less than 1/2 year. The board may grant
service credit to employees, who were performing school service at the
time of their induction into the armed forces of the United States, equal
to the time spent in the armed forces between September 1, 1940, and
September 1, 1947, and between June 25, 1950, and July 27, 1953 and
between August 5, 1964, and August 15, 1973, but no such service credit
shall be granted for a period of more than five years spent in the armed
forces between September 1, 1940, and September 1, 1947, or for a
period of more than two years spent in the armed forces between June
25, 1950, and July 27, 1953 or for a period of more than two years spent
in the armed forces between August 5, 1964 and August 15, 1973. In the
event the employee served during the periods between September 1,
1940, and September 1, 1947, and between June 25, 1950, and July 27,
1953, such employee shall be granted a service credit for the actual time
spent in the armed forces between June 25, 1950, and July 27, 1953, nor
shall such service credit be granted to any employee unless such employee
shall reenter school service and continue in such service for at least one
school year. The board may grant service credit to an employee who was
performing school service prior to the time of becoming employed as a
veterans' instructional on-the-farm training instructor equal to the time
spent as such instructor between the dates of September 1, 1946, and
September 1, 1961. The board may grant service credit to an employee
who prior to performing school service was a faculty member of the Kan-
sas vocational school at Topeka, known part of the time as the Kansas
technical institute, which operated under the Kansas state board of re-
gents prior to 1956 equal to the time spent as instructor at such school.
In case of doubt the board shall decide what constitutes school service;
and (3) service for which credit must be given under federal law, includ-
ing, but not limited to, when applicable, the uniformed services employ-
ment and reemployment rights act of 1994, as in effect on July 1, 1998;

    (f) ``school annuitant'' means any person who is entitled to receive a
school annuity;

    (g) ``school annuity'' means the monthly payments due to any school
annuitant. Such payments shall continue for life, and be paid in monthly
installments;

    (h) ``service annuity'' means that part of the school annuity which is
based upon the service record of the person concerned, and which is paid
by the state;

    (i) ``savings annuity'' means that part of the school annuity which re-
sults from the accumulated contributions of the school employee and
interest thereon less the proportionate share of the expense of the ad-
ministration of this act;

    (j) ``disability annuity'' means a school annuity granted to a school
employee who suffers such physical or mental disability as to be unable
to perform school service;

    (k) ``standard annuity'' means the school annuity which is granted to
a school employee at the age of 65 years, as prescribed by this act. The
standard annuity shall be used as the basis in computing actuarially equiv-
alent annuities granted at ages prior to 65 years. Whenever the amount
of any benefit is to be determined on the basis of actuarial assumptions,
the assumption shall be specified in a way that precludes employer dis-
cretion;

    (l) ``service record'' means the individual record kept by the board
for each school employee. It shall show the number of school years of
school service, the salary or wages earned, the date of birth, and such
other data as the board may require;

    (m) ``age'' and ``attained age'' shall be computed as of September 1
of the calendar year under consideration;

    (n) ``deductions'' means the amounts withheld, as provided in this act,
from warrants issued in payment for school services;

    (o) ``actuarial computation'' means computation in accordance with
some standard actuarial table. The board shall determine which one of
the standard actuarial tables shall be used. Whenever the amount of any
benefit is to be determined on the basis of actuarial assumptions, the
assumptions shall be specified in a way that precludes employer discre-
tion; and

    (p) ``compensation'' means the same as provided in section 83 and
amendments thereto for purposes of nondiscrimination testing pursuant
to the federal internal revenue code of 1986, as in effect on July 1, 1998.

    Sec. 9. K.S.A. 1997 Supp. 74-4902, as amended by section 26 of 1998
Senate Bill No. 382, is hereby amended to read as follows: 74-4902. As
used in articles 49 and 49a of chapter 74 and amendments thereto, unless
otherwise provided or the context otherwise requires:

    (1) ``Accumulated contributions'' means the sum of all contributions
by a member to the system which are credited to the member's account,
with interest allowed thereon;

    (2) ``acts'' means K.S.A. 74-4901 to 74-4929, inclusive, the provisions
of articles 49 and 49a of the Kansas Statutes Annotated and amendments
thereto;

    (3) ``actuarial equivalent'' means an annuity or benefit of equal value
to the accumulated contributions, annuity or benefit, when computed
upon the basis of the actuarial tables in use by the system. Whenever the
amount of any benefit is to be determined on the basis of actuarial as-
sumptions, the assumptions shall be specified in a way that precludes
employer discretion;

    (4) ``actuarial tables'' means the actuarial tables approved and in use
by the board at any given time;

    (5) ``actuary'' means the actuary or firm of actuaries employed or
retained by the board at any given time;

    (6) ``agent'' means the individual designated by each participating em-
ployer through whom system transactions and communication are di-
rected;

    (7) ``beneficiary'' means any natural person or persons or estate
named by a member to receive any benefits as provided for by this act.
Designations of beneficiaries by a member who is a member of more
than one retirement system made on or after July 1, 1987, shall be the
basis of any benefits payable under all systems unless otherwise provided
by law. Except as otherwise provided by subsection (33) of this section,
if there is no named beneficiary living at time of member's death, any
benefits provided for by this act shall be paid to: (A) The member's sur-
viving spouse; (B) the member's dependent child or children; (C) the
member's dependent parent or parents; (D) the member's nondependent
child or children; (E) the member's nondependent parent or parents; (F)
the estate of the deceased member; in the order of preference as specified
in this subsection. Any payment made to a named beneficiary shall be a
full discharge and release to the system from any further claims. Any
payment made to a beneficiary as provided in clauses (A), (B), (C), (D),
(E) or (F) of this subsection, as determined by the board, shall be a full
discharge and release to the system from any further claims. Whenever
any payment is payable to more than one beneficiary such payment shall
be made to such beneficiaries jointly. Any benefits payable to a benefi-
ciary or beneficiaries who are minor children or incompetent persons
shall be made in the name of the beneficiary or beneficiaries and deliv-
ered to the lawfully appointed conservator of such beneficiaries who was
nominated by will or as otherwise provided by law, except that in those
cases where the benefit involves only the payment of the member's ac-
cumulated contributions with interest as provided by this act in an amount
not to exceed $500, the board is hereby authorized in its discretion with-
out the appointment of a conservator or the giving of a bond to pay such
amount as is due to the minor or minors themselves, any payment so
made shall be a full discharge and release to the system from any further
claims;

    (8) ``board of trustees,'' ``board'' or ``trustees'' means the managing
body of the system which is known as the Kansas public employees re-
tirement system board of trustees;

    (9) ``compensation'' means, except as otherwise provided, all salary,
wages and other remuneration payable to a member for personal services
performed for a participating employer, including maintenance or any
allowance in lieu thereof provided a member as part of compensation,
but not including reimbursement for travel or moving expenses or on and
after July 1, 1994, payment pursuant to an early retirement incentive
program made prior to the retirement of the member. Beginning with
the employer's fiscal year which begins in calendar year 1991 or for em-
ployers other than the state of Kansas, beginning with the fiscal year
which begins in calendar year 1992, when the compensation of a member
who remains in substantially the same position during any two consecutive
years of participating service used in calculating final average salary is
increased by an amount which exceeds 15%, then the amount of such
increase which exceeds 15% shall not be included in compensation, ex-
cept that (A) any amount of compensation for accumulated sick leave or
vacation or annual leave paid to the member, (B) any increase in com-
pensation for any member due to a reclassification or reallocation of such
member's position or a reassignment of such member's job classification
to a higher range or level and (C) any increase in compensation as pro-
vided in any contract entered into prior to January 1, 1991, and still in
force on the effective date of this act, pursuant to an early retirement
incentive program as provided in K.S.A. 72-5395 et seq. and amendments
thereto, shall be included in the amount of compensation of such member
used in determining such member's final average salary and shall not be
subject to the 15% limitation provided in this subsection. Any contribu-
tions by such member on the amount of such increase which exceeds
15% which is not included in compensation shall be returned to the mem-
ber. Unless otherwise provided by law, beginning with the employer's
fiscal year coinciding with or following July 1, 1985, compensation shall
include any amounts for tax sheltered annuities or deferred compensation
plans. Beginning with the employer's fiscal year which begins in calendar
year 1991, compensation shall include amounts under sections 403b, 457
and 125 of the federal internal revenue code of 1986 and, as the board
deems appropriate, any other section of the federal internal revenue code
of 1986 which defers or excludes amounts from inclusion in income. For
purposes of applying limits under the federal internal revenue code ``com-
pensation'' shall have the meaning as provided in section 83 and amend-
ments thereto;

    (10) ``credited service'' means the sum of participating service and
prior service and in no event shall credited service include any service
which is credited under another retirement plan authorized under any
law of this state;

    (11) ``dependent'' means a parent or child of a member who is de-
pendent upon the member for at least 1/2 of such parent or child's support;

    (12) ``effective date'' means the date upon which the system becomes
effective by operation of law;

    (13) ``eligible employer'' means the state of Kansas, and any county,
city, township, special district or any instrumentality of any one or several
of the aforementioned or any noncommercial public television or radio
station located in this state which receives state funds allocated by the
Kansas public broadcasting commission whose employees are covered by
social security. If a class or several classes of employees of any above
defined employer are not covered by social security, such employer shall
be deemed an eligible employer only with respect to such class or those
classes of employees who are covered by social security;

    (14) ``employee'' means any appointed or elective officer or employee
of a participating employer whose employment is not seasonal or tem-
porary and whose employment requires at least 1,000 hours of work per
year, but not including: (A) Any person covered by or eligible for or who
will become eligible for a retirement annuity under the provisions of
K.S.A. 74-4925 and amendments thereto except as otherwise specifically
provided in subsection (3) of K.S.A. 74-4925 and amendments thereto
and this subsection; (B) Any employee who is a contributing member of
the United States civil service retirement system; (C) any employee of an
eligible employer who is a participant in public service employment under
title II and title VI of the federal comprehensive employment and training
act of 1973; (D) (B) any employee who is a contributing member of the
federal employees retirement system; (C) any employee who is a leased
employee of a participating employer. ``Leased employee'' means the
same as provided in section 414 of the federal internal revenue code; (E)
and (D) any employee or class of employees specifically exempted by law.
After June 30, 1975, no person who is otherwise eligible for membership
in the Kansas public employees retirement system shall be barred from
such membership by reason of coverage by, eligibility for or future eli-
gibility for a retirement annuity under the provisions of K.S.A. 74-4925
and amendments thereto, except that no person shall receive service
credit under the Kansas public employees retirement system for any pe-
riod of service for which benefits accrue or are granted under a retirement
annuity plan under the provisions of K.S.A. 74-4925 and amendments
thereto. After June 30, 1982, no person who is otherwise eligible for
membership in the Kansas public employees retirement system shall be
barred from such membership by reason of coverage by, eligibility for or
future eligibility for any benefit under another retirement plan authorized
under any law of this state, except that no such person shall receive service
credit under the Kansas public employees retirement system for any pe-
riod of service for which any benefit accrues or is granted under any such
retirement plan. Employee shall include persons who are in training at
or employed by, or both, a sheltered workshop for the blind operated by
the secretary of social and rehabilitation services. The entry date for such
persons shall be the beginning of the first pay period of the fiscal year
commencing in calendar year 1986. Such persons shall be granted prior
service credit in accordance with K.S.A. 74-4913 and amendments
thereto. However, such persons classified as home industry employees
shall not be covered by the retirement system. Employees shall include
any member of a board of county commissioners of any county and any
council member or commissioner of a city whose compensation is equal
to or exceeds $5,000 per year;

    (15) ``entry date'' means the date as of which an eligible employer
joins the system. The first entry date pursuant to this act is January 1,
1962;

    (16) ``executive secretary'' means the managing officer of the system
employed by the board under this act;

    (17) ``final average salary'' means in the case of a member who retires
prior to January 1, 1977, and in the case of a member who retires after
January 1, 1977, and who has less than five years of participating service
after January 1, 1967, the average highest annual compensation paid to
such member for any five years of the last 10 years of participating service
immediately preceding retirement or termination of employment, or in
the case of a member who retires on or after January 1, 1977, and who
has five or more years of participating service after January 1, 1967, the
average highest annual compensation paid to such member on or after
January 1, 1967, for any five years of participating service preceding re-
tirement or termination of employment, or, in any case, if participating
service is less than five years, then the average annual compensation paid
to the member during the full period of participating service, or, in any
case, if the member has less than one calendar year of participating service
such member's final average salary shall be computed by multiplying such
member's highest monthly salary received in that year by 12; in the case
of a member who became a member under subsection (3) of K.S.A. 74-
4925 and amendments thereto, or who became a member with a partic-
ipating employer as defined in subsection (3) of K.S.A. 74-4931 and
amendments thereto and who elects to have compensation paid in other
than 12 equal installments, such compensation shall be annualized as if
the member had elected to receive 12 equal installments for any such
periods preceding retirement; in the case of a member who retires after
July 1, 1987, the average highest annual compensation paid to such mem-
ber for any four years of participating service preceding retirement or
termination of employment; in the case of a member who retires on or
after July 1, 1993, who was first hired as an employee, as defined in
subsection (14) of K.S.A. 74-4902 and amendments thereto, prior to July
1, 1993, the average highest annual compensation, as defined in subsec-
tion (9), paid to such member for any four years of participating service
preceding retirement or termination of employment or the average high-
est annual salary, as defined in subsection (34), paid to such member for
any three years of participating service preceding retirement or termi-
nation of employment, whichever is greater; and in the case of a member
who retires on or after July 1, 1993, and who is first hired as an employee,
as defined in subsection (14) of K.S.A. 74-4902 and amendments thereto,
on or after July 1, 1993, the average highest annual salary, as defined in
subsection (34), paid to such member for any three years of participating
service preceding retirement or termination of employment. Final aver-
age salary shall not include any purchase of participating service credit
by a member as provided in subsection (2) of K.S.A. 74-4919h and
amendments thereto which is completed within five years of retirement.
For any application to purchase or repurchase service credit for a certain
period of service as provided by law received by the system after May 17,
1994, for any member who will have contributions deducted from such
member's compensation at a percentage rate equal to two or three times
the employee's rate of contribution or will begin paying to the system a
lump-sum amount for such member's purchase or repurchase and such
deductions or lump-sum payment commences after the commencement
of the first payroll period in the third quarter, ``final average salary'' shall
not include any amount of compensation or salary which is based on such
member's purchase or repurchase. Any application to purchase or repur-
chase multiple periods of service shall be treated as multiple applications.
For purposes of this subsection, the date that such member is first hired
as an employee for members who are employees of employers that
elected to participate in the system on or after January 1, 1994, shall be
the date that such employee's employer elected to participate in the sys-
tem. In the case of any former member who was eligible for assistance
pursuant to K.S.A. 74-4925 and amendments thereto prior to July 1, 1998,
for the purpose of calculating final average salary of such member, such
member's final average salary shall be based on such member's salary
while a member of the system or while eligible for assistance pursuant to
K.S.A. 74-4925 and amendments thereto, whichever is greater;

    (18) ``fiscal year'' means, for the Kansas public employees retirement
system, the period commencing July 1 of any year and ending June 30 of
the next;

    (19) ``Kansas public employees retirement fund'' means the fund cre-
ated by this act for payment of expenses and benefits under the system
and referred to as the fund;

    (20) ``leave of absence'' means a period of absence from employment
without pay, authorized and approved by the employer, and which after
the effective date does not exceed one year;

    (21) ``member'' means an eligible employee who is in the system and
is making the required employee contributions, or; any former employee
who has made the required contributions to the system and has not re-
ceived a refund if such member is within five years of termination of
employment with a participating employer; or any former employee who
has made the required contributions to the system, has not yet received
a refund and has been granted a vested benefit;

    (22) ``military service'' means service in the uniformed forces of the
United States, for which retirement benefit credit must be given under
the provisions of USERRA or service in the armed forces of the United
States or in the commissioned corps of the United State States public
health service, which service is immediately preceded by a period of em-
ployment as an employee or by the entering into of an employment con-
tract with a participating employer and is followed by return to employ-
ment as an employee with the same or another participating employer
within 12 months immediately following discharge from such military
service, except that if the board determines that such return within 12
months was made impossible by reason of a service-connected disability,
the period within which the employee must return to employment with
a participating employer shall be extended not more than two years from
the date of discharge or separation from military service;

    (23) ``normal retirement date'' means the date on or after which a
member may retire with full retirement benefits pursuant to K.S.A. 74-
4914 and amendments thereto;

    (24) ``participating employer'' means an eligible employer who has
agreed to make contributions to the system on behalf of its employees;

    (25) ``participating service'' means the period of employment after
the entry date for which credit is granted a member;

    (26) ``prior service'' means the period of employment of a member
prior to such member's the entry date for which credit is granted a mem-
ber under this act;

    (27) ``prior service annual salary'' means the highest annual salary,
not including any amounts received as payment for overtime or as re-
imbursement for travel or moving expense, received for personal services
by the member from the current employer in any one of the three cal-
endar years immediately preceding January 1, 1962, or the entry date of
the employer, whichever is later, except that if a member entered the
employment of the state during the calendar year 1961, the prior service
annual salary shall be computed by multiplying such member's highest
monthly salary received in that year by 12;

    (28) ``retirant'' means a member who has retired under this system;

    (29) ``retirement benefit'' means a monthly income or the actuarial
equivalent thereof paid in such manner as specified by the member pur-
suant to this act or as otherwise allowed to be paid at the discretion of
the board, with benefits accruing from the first day of the month coin-
ciding with or following retirement and ending on the last day of the
month in which death occurs. Upon proper identification a surviving
spouse may negotiate the warrant issued in the name of the retirant;

    (30) ``retirement system'' or ``system'' means the Kansas public em-
ployees retirement system as established by this act and as it may be
amended;

    (31) ``social security'' means the old age, survivors and disability in-
surance section of the federal social security act;

    (32) ``total disability'' means a physical or mental disability which pre-
vents the member from engaging, for remuneration or profit, in any oc-
cupation for which the member is reasonably suited by education, training
or experience;

    (33) ``trust'' means an express trust, created by a trust instrument,
including a will, designated by a member to receive payment of the in-
sured death benefit under K.S.A. 74-4927 and amendments thereto and
payment of the member's accumulated contributions under subsection
(1) of K.S.A. 74-4916 and amendments thereto. A designation of a trust
shall be filed with the board. If there is a designated trust at the time of
the member's death, the insured death benefit for the member under
K.S.A. 74-4927 and amendments thereto and the member's accumulated
contributions under subsection (1) of K.S.A. 74-4916 and amendments
thereto shall be paid to the trust in lieu of the member's beneficiary. If
no will is admitted to probate within six months after the death of the
member or no trustee qualifies within such six months or if the designated
trust fails, for any reason whatsoever, the insured death benefit under
K.S.A. 74-4927 and amendments thereto and the member's accumulated
contributions under subsection (1) of K.S.A. 74-4916 and amendments
thereto shall be paid in accordance with the provisions of subsection (7)
of this section as in other cases where there is no named beneficiary living
at the time of the member's death and any payments so made shall be a
full discharge and release to the system from any further claims;

    (34) ``salary'' means all salary and wages payable to a member for
personal services performed for a participating employer, including main-
tenance or any allowance in lieu thereof provided a member as part of
salary. Salary shall not include reimbursement for travel or moving ex-
penses, payment for accumulated sick leave or vacation or annual leave,
severance pay or any other payments to the member determined by the
board to not be payments for personal services performed for a partici-
pating employer constituting salary or on and after July 1, 1994, payment
pursuant to an early retirement incentive program made prior to the
retirement of the member. When the salary of a member who remains
in substantially the same position during any two consecutive years of
participating service used in calculating final average salary is increased
by an amount which exceeds 15%, then the amount of such increase
which exceeds 15% shall not be included in salary. Any contributions by
such member on the amount of such increase which exceeds 15% which
is not included in compensation shall be returned to the member. Unless
otherwise provided by law, salary shall include any amounts for tax shel-
tered annuities or deferred compensation plans. Salary shall include
amounts under sections 403b, 457 and 125 of the federal internal revenue
code of 1986 and, as the board deems appropriate, any other section of
the federal internal revenue code of 1986 which defers or excludes
amounts from inclusion in income. For purposes of applying limits under
the federal internal revenue code ``salary'' shall have the meaning as pro-
vided in section 83 and amendments thereto. In any case, if participating
service is less than three years, then the average annual salary paid to the
member during the full period of participating service, or, in any case, if
the member has less than one calendar year of participating service such
member's final average salary shall be computed by multiplying such
member's highest monthly salary received in that year by 12;

    (35) ``federal internal revenue code'' means the federal internal rev-
enue code of 1954 or 1986, as in effect on July 1, 1998, and as applicable
to a governmental plan; and

    (36) ``USERRA'' means the federal uniformed services employment
and reemployment rights act of 1994 as in effect on July 1, 1998.

    Sec. 10. K.S.A. 1997 Supp. 74-4904 is hereby amended to read as
follows: 74-4904. (1) The system may sue and be sued in its official name,
but its trustees, officers, employees and agents shall not be personally
liable for acts of the system unless such person acted with willful, wanton
or fraudulent misconduct or intentionally tortious conduct. Any agree-
ment in settlement of litigation involving the system and the investment
of moneys of the fund is a public record as provided in K.S.A. 45-215 et
seq. and amendments thereto and subject to the provisions of that act.
The service of all legal process and of all notices which may be required
to be in writing, whether legal proceedings or otherwise, shall be had on
the executive secretary at such executive secretary's office. All actions or
proceedings directly or indirectly against the system shall be brought in
Shawnee county.

    (2) Any person aggrieved by any order or decision of the board made
without a hearing, may, within 30 days after notice of the order or decision
of the board make written request to the board for a hearing thereon.
The board shall hear such party or parties in accordance with the provi-
sions of the Kansas administrative procedure act at its next regular meet-
ing or at a special meeting within 60 days after receipt of such request.
For the purpose of any hearing under this section, the board may appoint
one or more presiding officers. Any such presiding officer shall be a mem-
ber of the board or, an employee of the board or any other person des-
ignated by the board to serve as such presiding officer. Any such appoint-
ment shall apply to a particular hearing or to a set or class of hearings as
specified by the board in making such appointment. The board shall re-
view an initial order resulting from a hearing under this section. Any
member of the board who serves as a presiding officer shall be reim-
bursed for actual and necessary expenses and shall receive compensation
in an amount fixed by the board not to exceed the per diem compensation
allowable for members of the board. The board is hereby authorized to
enter into a contract with any other person designated by the board to
serve as a presiding officer who is not a member or employee of the board
and to provide for reimbursement for actual and necessary expenses and
compensation for such person serving as a presiding officer.

    Sec. 11. K.S.A. 1997 Supp. 74-4905 is hereby amended to read as
follows: 74-4905. (a) On July 1, 1993, the board of trustees of the Kansas
public employees retirement system, as such board existed on June 30,
1993, is hereby abolished. On July 1, 1993, there is hereby established a
new board of trustees of the Kansas public employees retirement system.
Such board established on July 1, 1993, shall consist of nine members, as
follows:

    (1) Six appointed members, four appointed by the governor subject
to confirmation by the senate as provided in K.S.A. 75-4315b and amend-
ments thereto, one appointed by the president of the senate and one
appointed by the speaker of the house of representatives. Except as pro-
vided by K.S.A. 1996 1997 Supp. 46-2601, no person appointed to the
board whose appointment is subject to confirmation, shall exercise any
power, duty or function as a member of the board until confirmed by the
senate. No more than two members of the board whose appointment is
subject to confirmation shall be from the same political party;

    (2) two retirement system members elected by the members and re-
tirants of the system as provided in subsection (12) of K.S.A. 74-4909 and
amendments thereto. As provided in this subsection, only active and re-
tired members of the system shall be eligible to be elected to the board
and only active and retired members of the system shall be eligible to
elect the two retirement system members pursuant to this subsection.
Inactive members shall not be eligible to be elected to the board nor to
elect the two retirement system members elected pursuant to this sub-
section. If a member elected to the board as provided in this subsection
becomes inactive, such member is disqualified from service on the board
and such member's board position shall be vacant and such vacancy shall
be filled as provided in subsection (b)(1). Of the two retirement system
members elected pursuant to this subsection, one shall be a member of
the retirement system who is in school employment as provided in K.S.A.
74-4931 et seq. and amendments thereto and one shall be a member of
the retirement system other than a member who is in school employment.
For purposes of this subsection, retirement system means the Kansas
public employees retirement system, the Kansas police and firemen's re-
tirement system and the retirement system for judges; and

    (3) the state treasurer.

    (b) (1) Except as provided by this paragraph and paragraph (2), all
members of the board as provided in subsection (a)(1) and (a)(2) shall
serve four-year terms, except that of the members first appointed by the
governor, two shall be appointed for two-year terms and the member
appointed by the speaker of the house of representatives shall be ap-
pointed for a two-year term. The governor shall designate the term for
which each of the members first appointed shall serve. All members ap-
pointed to fill vacancies in the membership of the board and all members
appointed to succeed members appointed to membership on the board
shall be appointed in like manner as that provided for the original ap-
pointment of the member succeeded. All members appointed to fill va-
cancies of a member of the board appointed by the governor, the presi-
dent of the senate or the speaker of the house of representatives shall be
appointed to fill the unexpired term of such member. All vacancies on
the board by a member elected by the members and retirants of the
system shall be filled by the board as provided by rules and regulations
adopted as provided in subsection (12) of K.S.A. 74-4909 and amend-
ments thereto.

    (2) Except as provided in K.S.A. 1996 1997 Supp. 46-2601, no person
appointed to the board by the governor shall exercise any power, duty or
function as a member of the board until confirmed by the senate. The
terms of members appointed by the governor who are serving on the
board on the effective date of this act shall expire on January 15, of the
year in which such member's term would have expired under the provi-
sions of this section prior to amendment by this act. Thereafter, members
shall be appointed for terms of four years and until their successors are
appointed and confirmed.

    (c) The board shall elect a chairperson of the board at the first regular
meeting held on or after July 1, 1993, and at each annual meeting there-
after from the members of the board. The chairperson shall preside over
meetings of the board and perform such other duties as required by the
board.

    (d) The chairperson shall appoint another board member as vice-
chairperson, and the vice-chairperson shall perform the duties of chair-
person in the absence of the chairperson or upon the chairperson's ina-
bility or refusal to act.

    (e) The six members appointed pursuant to subsection (a)(1) shall
have demonstrated experience in the financial affairs of a public or private
organization or entity which employs 100 or more employees or had at
least five years' experience in the field of investment management or
analysis, actuarial analysis or administration of an employee benefit plan.

    (f) No person shall serve on the board if such person has knowingly
acquired a substantial interest in any nonpublicly traded investment made
with moneys of the fund. Any such person who knowingly acquires such
an interest shall vacate such member's position on the board and shall be
guilty of a class A misdemeanor. For purposes of this subsection, ``sub-
stantial interest'' means any of the following:

    (1) If an individual or an individual's spouse, either individually or
collectively, has owned within the preceding 12 months a legal or equi-
table interest exceeding $5,000 or 5% of any business, whichever is less,
the individual has a substantial interest in that business.

    (2) If an individual or an individual's spouse, either individually or
collectively, has received during the preceding calendar year compensa-
tion which is or will be required to be included as taxable income on
federal income tax returns of the individual and spouse in an aggregate
amount of $2,000 from any business or combination of businesses, the
individual has a substantial interest in that business or combination of
businesses.

    (3) If an individual or an individual's spouse holds the position of
officer, director, associate, partner or proprietor of any business, the in-
dividual has a substantial interest in that business, irrespective of the
amount of compensation received by the individual or individual's spouse.

    (4) If an individual or an individual's spouse receives compensation
which is a portion or percentage of each separate fee or commission paid
to a business or combination of businesses, the individual has a substantial
interest in any client or customer who pays fees or commissions to the
business or combination of businesses from which fees or commissions
the individual or the individual's spouse, either individually or collectively,
received an aggregate of $2,000 or more in the preceding calendar year.

    (5) If an individual or an individual's spouse has received a loan from
or received financing from any bank, savings and loan, credit union or
any other financial institution in an amount which exceeds $2,000, the
individual has a substantial interest in that financial institution.

    As used in this subsection, ``client or customer'' means a business or
combination of businesses.

    Any person who serves on the board shall fully disclose any substantial
interest that such person has in any publicly traded investment made with
moneys of the fund.

    (g) No person who serves on the board shall be employed for a period
of two years commencing on the date the person no longer serves on the
board and ending two years after such date with any organization in which
moneys of the fund were invested, except that the employment limitation
contained in this subsection shall not apply if such person's employment
is with an organization whose stock or other evidences of ownership are
traded on the public stock or bond exchanges.

    (h) All members of the board named, appointed or elected to the
board shall be subject to an investigation by the Kansas bureau of inves-
tigation or other criminal justice agencies. Information to be obtained
during such investigation shall include criminal history record informa-
tion, including arrest and conviction data, criminal intelligence informa-
tion and information relating to criminal and background investigations
as necessary to determine qualifications of such member. Such infor-
mation shall be forwarded to the senate committee specified by the pres-
ident of the senate for such committee's consideration and other than
conviction data, shall be confidential and shall not be disclosed except to
members and employees of the committee as necessary to determine
qualifications of such member. The committee, in accordance with K.S.A.
75-4319 and amendments thereto shall recess for a closed or executive
meeting to receive and discuss information received by the committee
pursuant to this subsection.

    (i) All of the powers, duties and functions of the board of trustees of
the Kansas public employees retirement system as such board existed
prior to July 1, 1993, are hereby transferred to and conferred and imposed
upon the board of trustees established pursuant to this act. The board of
trustees of the Kansas public employees retirement system established
pursuant to this act shall be the successor in every way of the powers,
duties and functions of the board of trustees existing prior to July 1, 1993,
in which the same were vested prior to July 1, 1993.

    Sec. 12. K.S.A. 1997 Supp. 74-4907 is hereby amended to read as
follows: 74-4907. (1) The principal office of the system shall be in quarters
at Topeka, Kansas. Offices shall be assigned to the system by the secretary
of administration.

    (2) The board shall keep a complete record of all proceedings which
shall be open at all reasonable hours to inspection. Any agreement in
settlement of litigation involving the system and the investment of moneys
of the fund shall be open for inspection by any person and suitable facil-
ities shall be made available by the system for this purpose as provided
by the provisions of K.S.A. 45-215 et seq. and amendments thereto. A
report covering the operation of the system for the past fiscal year, in-
cluding income and disbursements, and of the financial condition of the
system at the end of such fiscal year, showing the valuation of assets and
investments and liabilities of the system, shall be delivered after the end
of each fiscal year and prior to January 1 of the next fiscal year to the
governor and to the chairperson of the legislative coordinating council,
to the secretary of the senate and to the chief clerk of the house of rep-
resentatives and shall be made readily available to the members and par-
ticipating employers of the system. Such report shall include the financial
statements of the system and supporting schedules, presented in accord-
ance with generally accepted accounting principles. Such supporting
schedules presented in the annual report shall include a listing which
reports the cost and the fiscal year end lower amount of cost or market
value for each individual alternative investment of the system which was
initiated on or after July 1, 1991, and reports, in aggregate, the cost and
the fiscal year end lower amount of cost or market value for those alter-
native investments of the system initiated prior to July 1, 1991. The re-
tirement system shall maintain a listing which reports the cost and the
fiscal year end lower amount of cost or market value for each individual
alternative investment of the system which was initiated prior to July 1,
1991, and such listing shall be available for review in camera by the joint
committee on pensions, investments and benefits and as may be required
under the provisions of the legislative post audit act.

    Sec. 13. K.S.A. 1997 Supp. 74-4908 is hereby amended to read as
follows: 74-4908. (1) The board shall appoint an executive secretary and
shall establish the compensation therefor. Subject to the direction of the
board, the executive secretary shall be the managing officer of the system
and as such shall have charge of the office, records and supervision and
direction of the employees of the system. The executive secretary shall
be in the unclassified service under the Kansas civil service act.

    (2) The executive secretary shall recommend to the board the ad-
ministrative organization, the number and qualifications of employees
necessary to carry out the intent of this act and the directions of the board.
Upon approval of the board, the executive secretary is authorized to em-
ploy such persons in accordance with the Kansas civil service act.

    (3) The board of trustees shall select and employ or retain a qualified
actuary who shall serve at its pleasure as its technical advisor on matters
regarding operation of the system. The actuary shall:

    (a) Make an annual valuation of the liabilities and reserves of the
system, and a determination of the contributions required by the system
to discharge its liabilities and administrative costs under this act, and
recommend to the board rates of employer contributions required to
establish and maintain the system on an actuarial reserve basis. Such
recommended employer contributions shall not be based on any other
purpose outside of the needs of the system as prescribed by this subsec-
tion.

    (b) As soon after the effective date as practicable and once every
three years thereafter, make a general investigation of the actuarial ex-
perience under the system including mortality, retirement, employment
turnover and interest, and recommend actuarial tables for use in valua-
tions and in calculating actuarial equivalent values based on such inves-
tigation.

    (c) Cooperate with and provide any assistance to the actuary, the
legislative coordinating council and the joint committee on pensions, in-
vestments and benefits related to the independent actuarial audit and
evaluation as provided in K.S.A. 1996 1997 Supp. 74-4908a and amend-
ments thereto.

    (d) Perform such other duties as may be assigned by the board.

    (4) The attorney general of the state shall furnish such legal services
as may be necessary upon receipt of a request from the board, except
that legal services may be furnished by other counsel as the board in its
discretion deems necessary and prudent.

    (5) The board shall employ or retain qualified investment counsel or
counselors or may negotiate with a trust company to assist and advise in
the judicious investment of funds as herein provided.

    (6) The board may appoint a deputy executive secretary, an invest-
ment officer, an investment analyst, a real estate manager, a direct place-
ment manager, a chief fiscal officer, a member services officer, an attor-
ney, an assistant investment officer and an information resource officer
to advise and assist the board in the performance of powers, duties and
functions relating to the management and investment of the fund and in
such other matters as may be directed by the board. Such appointed
officers and employees shall be in the unclassified service under the Kan-
sas civil service act. The compensation of such appointed officers and
employees shall be established by the board.

    Sec. 14. K.S.A. 1997 Supp. 74-4910 is hereby amended to read as
follows: 74-4910. (1) An eligible employer may join the system on January
1 of any year. Application for affiliation shall be in the form of a resolution
approved by the governing or legislative body of the eligible employer or
by any other body or officer authorized by law or recognized by the board
to approve the action. No city or township shall become a participating
employer except by the adoption of a resolution therefor, which shall be
published once in the official city or township newspaper or, if there is
none, in a newspaper of general circulation in the city or county. No such
resolution shall take effect until 60 days after its final publication. If within
60 days of its final publication a petition signed by electors equal in num-
ber to not less than 10% of the electors who voted at the last preceding
regular election in the township, in the case of townships, the last regular
city election in the city, in the case of cities is filed in the office of the
clerk of such city, or township demanding that such resolution be sub-
mitted to a vote of the electors, the resolution shall not take effect until
submitted to a referendum and approved by a majority of the electors
voting thereon. A 2/3 vote of the members-elect of the governing body
shall be necessary for the affiliation of any eligible employer other than
a city or township. An application for affiliation with the system shall be
filed with the board not later than 30 days prior to the date participation
is to begin, except as such time limit may be extended by the board. Upon
the filing of a certified copy of such resolutions with the board an election
pursuant to this section shall be irrevocable, and the employer shall be-
come a participating employer on January 1 of the year immediately fol-
lowing the filing of such election with the board.

    (2) The state of Kansas in its capacity as an eligible employer, shall
become, by operation of law, a participating employer on the first entry
date. The Kansas turnpike authority shall not become a participating em-
ployer nor shall its officers or employees be covered by the retirement
system until such time as its governing body by a 2/3 vote of the members
of such governing body adopts a resolution for affiliation and files the
same in the same manner and on the same conditions as in the case of
an eligible employer other than a city or township.

    (3) If a participating employer is paying or has paid the salary or other
compensation of the judge, clerk or any other employee, whether elective
or appointive, such judge, clerk or other employee of such court or courts,
whether elective or appointive, shall be deemed an employee of the par-
ticipating employer. Such employee shall be governed by the provisions
governing other eligible employees of such participating employer. Any
participating employer which has not heretofore included such employees
as eligible employees under the retirement system shall on the first day
of the month coinciding with or following the effective date of this act
include such employees if otherwise eligible as eligible employees under
the retirement system. Such employees, whether elective or appointive,
if employed on the employer's entry date may elect to pay forthwith the
employee contributions from the employer's entry date and thereby be
governed by the provisions governing other employees employed by the
participating employer on entry date except that no such employee shall
be considered to be new employees on the first day of the month coin-
ciding with or following the effective date of this act and commence
making employee contributions in compliance with other provisions gov-
erning the retirement system and the participating employer shall make
the employer contributions in accordance with the alternative elected by
the employee and other provisions governing the retirement system.

    (4) Any employer whose employees are covered by social security and
who otherwise do not meet the provisions of subsection (13) of K.S.A.
74-4902 and amendments thereto may elect to affiliate under this section
upon meeting the definition of a governmental entity or instrumentality
as determined by the system. If, subsequent to such determination, the
United States internal revenue service determines that such employer
does not meet the definition of a governmental entity or instrumentality,
such affiliation shall be null and void and all employee accrued rights
associated with such affiliation shall be null and void and the system shall
refund such amounts presently credited to each employee's account and
an equivalent amount to the employer for each employee. The provisions
of this subsection shall apply to current and future participating employ-
ers.

    (5) For affiliations on and after January 1, 1999, any eligible em-
ployer, prior to the filing of an application for affiliation under this system,
shall request the board of trustees to submit a proposal for such affiliation
including an estimate of the employer's contribution rate necessary to
comply with the actuarial standard of this system. Such eligible employer
shall furnish all necessary data from which such proposal is prepared,
and shall pay all costs involved.

    Sec. 15. K.S.A. 1997 Supp. 74-4911, as amended by section 28 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4911.
(1) Any employee of a participating employer other than an elected of-
ficial on the entry date of such employer shall be a member of the system
on either the entry date or the first day of the payroll period coinciding
with or following the completion of one year of service, whichever is later.
For purposes of this act occasional breaks in service which shall not ex-
ceed an aggregate of 10 days in any such year shall not constitute a break
in service for purposes of determining the membership date of such em-
ployee.

    (2) Except as otherwise provided in this subsection, any employee
other than an elected official who is employed by a participating employer
after the entry date of such employer shall be a member of the system
on the first day of the payroll period coinciding with or following com-
pletion of one year of continuous service. For purposes of this act, oc-
casional breaks in service which shall not exceed an aggregate of 10 days
in any such year shall not constitute a break in continuous service for
purposes of determining the membership date of such employee. For
purposes of this subsection, any employee of a local governmental unit
which has its own pension plan who becomes an employee of a partici-
pating employer as a result of a merger or consolidation of services pro-
vided 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 one year of continuous service re-
quirement contained in this subsection.

    (3) Any employee who is an elected official and is eligible to join the
system shall file, within 90 days after taking the oath of office, an irrev-
ocable election to become or not to become a member of the system.
Such election shall become effective immediately upon making such elec-
tion, if such election is made within 14 days of taking the oath of office
or, otherwise, on the first day of the first payroll period of the first quarter
following receipt of the election in the office of the retirement system.
In the event that such elected official fails to file the election to become
a member of the retirement system, it shall be presumed that such person
has elected not to become a member.

    (4) Except as otherwise required by USERRA, any employee other
than an elected official who is in military service or on leave of absence
on the entry date of such employee's employer shall become a member
of the system upon returning to active employment or on the first day of
the payroll period coinciding with or following the completion of one year
of service, whichever is later. For purposes of this act, occasional breaks
in service which shall not exceed an aggregate of 10 days in any such year
shall not constitute a break in service for purposes of determining the
membership date of such employee.

    (5) Any employee of the state of Kansas other than an elected official,
who is receiving or is eligible for assistance by the state board of regents
in the purchase of a retirement annuity under K.S.A. 74-4925, and
amendments thereto, and who becomes ineligible for such assistance be-
cause such employee's position is reclassified to a position in the classified
service under the Kansas civil service act, or who becomes ineligible for
such assistance because such person accepts and transfers to a position
in the classified service under the Kansas civil service act shall be a mem-
ber of the system on the first day of the payroll period coinciding with or
following the effective date of such reclassification or transfer. Any such
employee who became ineligible for such assistance prior to the effective
date of this act because of such a reclassification or such a transfer oc-
curring prior to the effective date of this act and who is not a member of
the system on the effective date of this act shall be a member of the
system on the first day of the payroll period coinciding with or following
the effective date of this act.

    (6) Any employee of the state board of regents or of an educational
institution under its management, other than an elected official, who is a
member of the system and who becomes ineligible to be a member of
the system because such employee's position is reclassified to a position
under the Kansas civil service act which is eligible for assistance by the
state board of regents in the purchase of a retirement annuity under
K.S.A. 74-4925 and amendments thereto, or who becomes ineligible to
be a member of the system because such employee transfers to a position
under the Kansas civil service act which is eligible for such assistance,
shall become eligible for such assistance in accordance with the provisions
of K.S.A. 74-4925 and amendments thereto, unless such employee files
a written election in the office of the retirement system, in the form and
manner prescribed by the board of trustees thereof, to remain a member
of the system prior to the first day of the first complete payroll period
occurring after the effective date of such reclassification or transfer. Fail-
ure to file such written election shall be presumed to be an election not
to remain a member of the system and to become eligible for assistance
by the state board of regents in the purchase of a retirement annuity
under K.S.A. 74-4925 and amendments thereto. Such election, whether
to remain a member of the system or to become eligible for such assis-
tance, shall be effective as of the effective date of such reclassification or
transfer, and shall be irrevocable.

    (7) Any elected official who at the time of becoming an elected official
is already a member of the system by being or having been an employee
of a participating employer shall continue as a member of the system.

    Sec. 16. K.S.A. 1997 Supp. 74-4913, as amended by section 33 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4913.
(1) Prior service shall be credited as follows:

    (a) A member shall receive full credit for continuous employment
prior to the entry date with such member's employer on the entry date.
If the employee was also employed on March 15, 1961, by the employer
who is the employee's employer on the employee's entry date of the year
immediately preceding the entry date of that employer, then all such pre-
vious employment, whether or not continuous, shall be credited; other-
wise no credit shall be granted for employment prior to a break in con-
tinuous employment. Any member or retirant who has been credited with
prior service as hereinbefore provided and who was employed by any
participating employer on March 15, 1961 of the year immediately pre-
ceding the entry date of that employer, may apply to the board on such
forms as it may prescribe for prior service credit with a participating
employer other than the member's entry date employer. Upon receipt of
written verification of such employment from the participating employer,
the board may shall grant such additional prior service credit and with
respect to a retirant, shall adjust the amount of the retirement benefit
accordingly commencing with the next monthly benefit payment due fol-
lowing receipt of the written verification, except that such retirant shall
not be entitled to any retroactive adjustment in the amount of such re-
tirement benefit as a result of the board granting such additional prior
service credit. In the case of any person other than a retirant receiving a
retirement benefit, such person may make application for an adjustment
in the benefit amount in the same manner as a member or retirant, and
in such case the adjustment in the benefit amount shall be determined
by the board upon the advice of the actuary, and shall commence with
the next monthly benefit payment due following receipt of the written
verification;

    (b) leaves of absence and military service shall not be counted as
breaks in continuous employment; however, military service which is im-
mediately preceded and followed by employment with a participating
employer shall be credited, except that after July 1, 1974, not more than
five years' credit for military service shall be granted hereunder to the
extent required under USERRA, but leaves of absence shall not be cred-
ited;

    (c) any member who was employed in the Kansas state employment
service, now a section of the Kansas division of employment security,
during any of the time the Kansas state employment service was loaned
by the state to the federal government (January 1, 1942, for the duration
of the emergency period of world war II, which service was returned to
the state by the federal government effective November 16, 1946) shall
be entitled to prior service credit for the time so employed during the
period stated for any service rendered under the jurisdiction of the United
States employment service for the federal government in like manner as
if the employment service had remained under the jurisdiction of the
state of Kansas;

    (d) any member who is not otherwise eligible for service credit as
provided for in subsection (1)(a) may be granted credit for the service
upon the attainment of 38 quarters of participating service;

    (e) any member who was employed by the university of Wichita prior
to July 1, 1964, shall be entitled to prior service credit for such time of
employment under the Kansas public employees retirement system,
when such employment is not the basis for other pension rights.

    (2) Participating service shall be credited as follows: (a) A member
shall receive credit for participating service with a participating employer
in accordance with the rules and regulations established by the board of
trustees, except that no more than one calendar quarter of participating
service shall be credited for any employment within any one calendar
quarter;

    (b) leaves of absence and military service shall not count as a break
in continuous employment. In the case of a leave of absence, the member
shall leave such member's accumulated contribution on deposit with the
fund; however, the period of military service shall be credited, except that
after July 1, 1974, not more than five years' credit for military service
shall be granted hereunder to the extent required under USERRA, but
leaves of absence shall not be credited. Employees who enter the military
service from their employment after the employer's entry date and who
have not completed one year of service at the time of their entry into the
military service, shall not become members of the retirement system until
they return to the employment of that or another participating employer.
In the case of such employee whose combined public employment and
military service does not equal one year at the time of such employee's
return to employment, the date of membership shall be the first day of
the payroll period coinciding with or following the completion of one
combined public employment and military year of service. Such service
shall be granted in accordance with this section;

    (c) a period of retirement under the system or a period of total dis-
ability, immediately followed by employment with a participating em-
ployer, shall not count as a break in continuous employment, except that
such periods while not employed shall not be credited as participating
service;

    (d) termination of employment, followed by employment with a par-
ticipating employer within five years after such termination, does not
constitute a break in continuous employment if such person has not with-
drawn such person's accumulated contribution. Such period while not
employed shall not be credited as participating service.

    (3) In determining the number of years of credited prior service or
participating service a fractional year of six months or more shall be con-
sidered as one year and a fractional year of less than six months shall be
disregarded.

    Sec. 17. K.S.A. 1997 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, 1986, age 65 or age 60 with
the completion of 35 years of credited service or at any age with the
completion of 40 years of credited service, or commencing July 1, 1993,
any alternative normal retirement date already prescribed by law or 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 serv-
ice credit for any service after the date of retirement.

    (3) Any member who is an employee of an affiliating employer pur-
suant 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 employ-
ment 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 serv-
ice is paid, during calendar years 1988 through 1990, in an amount equal
to $6,000 or more in any one such calendar year; during calendar year
1991, in an amount equal to $9,720 or more; during calendar year 1992,
in an amount equal to $10,200 or more; during calendar year 1993, in an
amount equal to $10,560 or more; during calendar year 1994, in an
amount equal to $11,160 or more; or during calendar year 1995 and all
calendar years thereafter, in an amount equal to $11,280 $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 par-
ticipating employer shall not make contributions nor receive additional
credit under such system for such service except as provided by this sec-
tion. Upon request of the executive secretary of the system, the secretary
of revenue shall provide such information as may be needed by the ex-
ecutive 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, appointees or members of the legislature or any
other elected officials.

    (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 require-
ments contained in this section.

    Sec. 18. K.S.A. 1997 Supp. 74-4914e is hereby amended to read as
follows: 74-4914e. (1) As used in this section:

    (a) ``Correctional employee'' means any member of the system who
is a security officer or other employee of the department of corrections
and who is in a position for which the duties and responsibilities involve
regular contact with inmates as certified by the secretary of corrections;

    (b) ``disability'' means the total inability to perform permanently the
duties of the position of a correctional employee in which the correctional
employee was employed at the time of disability;

    (c) ``service-connected'' means any physical or mental disability re-
sulting from external force, violence or disease occasioned by an act of
duty as a correctional employee and includes, for any correctional em-
ployee after five years of credited service, any death or disability resulting
from a heart disease or disease of the lung or respiratory tract, except that
in the event that the correctional employee ceases to be a contributing
member except by reason of a service-connected disability for a period
of six months or more and then again becomes a contributing member
the provision relating to death or disability resulting from a heart disease
or disease of the lung or respiratory tract shall not apply until such cor-
rectional employee has again become a contributing member for a period
of not less than two years or unless clear and precise evidence is presented
that the heart disease or disease of the lung or respiratory tract was in
fact occasioned by an act of duty as a correctional employee; and

    (d) ``final average salary'' means the average highest annual compen-
sation paid to a correctional employee for any three of the last five years
of participating service immediately preceding the date of disability, or if
participating service is less than three years, then the average annual
compensation paid to the correctional employee during the full period of
participating service or if a correctional employee has less than one cal-
endar year of participating service the correctional employee's final av-
erage salary shall be computed by multiplying the correctional employee's
highest monthly salary received in that year by 12.

    (2) If any active contributing correctional employee becomes totally
and permanently disabled due to service-connected causes as defined in
subsection (1), such correctional employee shall be retired and the fol-
lowing benefits shall become payable and shall continue until the correc-
tional employee's death or until the correctional employee recovers from
the disability if a report of the event in a form acceptable to the board is
filed in the office of the executive secretary of the board within 220 days
after the date of the event or act of duty causing such disability and an
application for such benefit, in such form and manner as the board shall
prescribe, is filed by the correctional employee or the correctional em-
ployee's authorized representative in the office of the executive secretary
of the board within two years of the date of disability:

    (a) The correctional employee shall receive a retirement benefit
equal to 50% of the correctional employee's final average salary. Such
benefit shall accrue from the day upon which the correctional employee
ceases to draw compensation.

    (b) Each of the correctional employee's unmarried children under
the age of 18 years or each of the correctional employee's children under
the age of 23 years who are full-time students as provided in K.S.A. 74-
49,117 and amendments thereto shall receive an annual benefit equal to
10% of the correctional employee's final average salary. Such benefit shall
accrue from the day upon which the correctional employee ceases to draw
compensation and shall end on the first day of the month in which each
such child or children attains the age of 18 years, die or marry, whichever
occurs earlier or in which each such child or children attains the age of
23 years, if such child or children are full-time students as provided in
K.S.A. 74-49,117 and amendments thereto.

    (c) In no case shall the total benefits payable under paragraphs (a)
and (b) of this subsection (2) be in excess of 75% of the correctional
employee's final average salary.

    (d) In the event a correctional employee who is retired under para-
graph (a) of this subsection (2), dies within two years after the date of
such retirement, then benefits may be payable under subsection (2) of
K.S.A. 74-4916 and amendments thereto.

    (e) In the event a correctional employee who is retired under para-
graph (a) of this subsection (2), dies more than two years after the date
of such retirement, and the proximate cause of such death is the serv-
ice-connected cause from which the disability resulted, then benefits may
be payable under subsection (2) of K.S.A. 74-4916 and amendments
thereto.

    (f) In the event a correctional employee who is retired under subsec-
tion (2) dies after the date of retirement and no benefits are payable under
paragraphs (d) and (e) the following benefits shall be payable:

    (i) To the correctional employee's spouse, if lawfully wedded to the
correctional employee at the time of the correctional employee's death, a
lump-sum benefit equal to 50% of the correctional employee's final av-
erage salary at the time of the correctional employee's retirement.

    (ii) To the correctional employee's spouse, if lawfully wedded to the
correctional employee at the time of the correctional employee's death, an
annual benefit equal to 50% of the correctional employee's retirement
benefit payable in monthly installments, to accrue from the first day of
the month following the correctional employee's date of death and ending
on the first day of the month in which the spouse dies. If there is no
surviving spouse, or if after the death of the spouse there remain one or
more children under the age of 18 years or one or more children under
the age of 23 years who is a full-time student as provided in K.S.A. 74-
49,117, and amendments thereto, the annual spouse's benefit shall be pay-
able in equal shares to such children and each child's share shall end on
the first day of the month in which such child attains the age of 18 years
or dies, whichever occurs earlier or in which such child attains the age of
23 years, if such child is a full-time student as provided in K.S.A. 74-
49,117, and amendments thereto.

    The provisions of this subsection shall apply in all cases of such cor-
rectional employees who die after October 1, 1996.

    (3) If any correctional employee who is an active contributing mem-
ber prior to such correctional employee's normal retirement becomes
totally and permanently disabled for a period of 180 days from causes not
service-connected, and not as the result of a willfully negligent or inten-
tional act of the correctional employee, such correctional employee shall
be retired and the following benefit shall become payable and shall con-
tinue until the correctional employee's death or until the correctional
employee recovers from such disability whichever occurs first if a report
of the disability in a form acceptable to the board is filed in the office of
the executive secretary of the board within 220 days after the date of the
commencement of such disability and if an application for such benefit
in such form and manner as the board shall prescribe is filed in the office
of the executive secretary of the board within two years of the date of
disability:

    A retirement benefit equal to 2% of the correctional employee's final
average salary multiplied by the number of years of credited service, ex-
cept that such retirement benefit shall be at least equal to 25% of the
member's final average salary but not to exceed the amount of the re-
tirement benefit provided in paragraph (a) of subsection (2). Such benefit
shall not become payable until satisfactory evidence is presented to the
board that the correctional employee is and has been for a period of 180
days totally and permanently disabled, but benefits shall accrue from the
day upon which the correctional employee ceases to draw compensation.

    (4) Any correctional employee who is employed for compensation by
an employer other than the department of corrections and whose disa-
bility is incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (3).

    (5) If a correctional employee becomes totally and permanently dis-
abled and no benefits are payable under subsections (2) or (3), the sum
of the correctional employee's accumulated contributions shall be paid to
the correctional employee.

    (6) Any correctional employee receiving benefits under this section
shall submit to medical examination, not oftener than annually, by one or
more physicians or any other practitioners of the healing arts holding a
valid license issued by Kansas state board of healing arts, as the board of
trustees may direct. If upon such medical examination the examiners re-
port to the board that the retirant is physically able and capable of resum-
ing employment with the participating employer from whose employment
the correctional employee retired, the disability benefits shall terminate.
A retirant who has been receiving benefits under the provisions of this
section and who returns to employment of a participating employer shall
immediately commence accruing service credit which shall be added to
that which has been accrued by virtue of previous service.

    (7) Any retirant who has been receiving benefits under the provisions
of this section for a period of five years shall be deemed finally retired
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the retirant remains totally and permanently disabled, a further medical
examination or examinations may be required.

    (8) Refusal or neglect to submit to examination as provided in sub-
section (6) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the correctional employee's rights in and
to all benefits under the system may be revoked by the board.

    (9) Any retirement benefits payable under the provisions of this sec-
tion shall be in lieu of all other benefits under the system.

    (10) Each correctional employee shall report to such member's par-
ticipating employer any event or act of duty causing disability within 200
days after such event or act of duty. The department of corrections shall
file in the office of the executive secretary of the board, in a form ac-
ceptable to the board, a report of the event or act of duty causing disability
within 220 days after the event or act of duty.

    (11) Benefits payable under this section shall be reduced by the orig-
inal amount of any disability benefits received under the federal social
security act or the workers compensation act. For any correctional em-
ployee already retired on the effective date of this act, no reduction of
the original social security benefits shall be applicable to benefits paid
prior to the effective date of this act. In no case shall a correctional em-
ployee who is entitled to receive benefits under this section receive less
than $100 per month.

    (12) The provisions of this section shall apply to disabilities occurring
after June 30, 1982, and prior to July 1, 1995. At the direction of the
board of trustees, the actuary shall conduct an experience evaluation of
benefits payable under this section and the board shall provide copies of
such study to the governor and members of the legislature.

    (13) The provisions of K.S.A. 74-4927 and amendments thereto re-
lating to insured disability benefits shall not be applicable to correctional
employees subject to the provisions of this section.

    (14) In the event a correctional employee who is retired under sub-
section (3) dies after the date of retirement and no benefits are payable
under that subsection, the following benefits shall be payable:

    (i) To the correctional employee's spouse, if lawfully wedded to the
correctional employee at the time of the correctional employee's death, a
lump-sum benefit equal to 50% of the correctional employee's final av-
erage salary at the time of the correctional employee's retirement.

    (ii) To the correctional employee's spouse, if lawfully wedded to the
correctional employee at the time of the correctional employee's death, an
annual benefit equal to 50% of the correctional employee's retirement
benefit payable in monthly installments, to accrue from the first day of
the month following the correctional employee's date of death and ending
on the first day of the month in which the spouse dies. If there is no
surviving spouse, or if after the death of the spouse there remain one or
more children under the age of 18 years or one or more children under
the age of 23 years who is a full-time student as provided in K.S.A. 74-
49,117, and amendments thereto, the annual spouse's benefit shall be pay-
able in equal shares to such children and each child's share shall end on
the first day of the month in which such child attains the age of 18 years
or dies, whichever occurs earlier or in which such child attains the age of
23 years, if such child is a full-time student as provided in K.S.A. 74-
49,117, and amendments thereto.

    The provisions of this subsection shall apply in all cases of such cor-
rectional employees who die after October 1, 1996.

    Sec. 19. K.S.A. 1997 Supp. 74-4917 is hereby amended to read as
follows: 74-4917. (1) Upon termination of employment with a participat-
ing employer, not followed by employment with such participating em-
ployer or another participating employer within 30 days of such termi-
nation, the member shall be paid an amount equal to the member's
accumulated contributions then on deposit with the system after making
application in such form as may be prescribed by the board, except that
the system shall have a reasonable time to process the application for
withdrawal. The participating employer shall, upon giving a terminated
employee a withdrawal application, certify to the system all member con-
tributions which have not been reported previously. In the case of a death
of an active member, the participating employer shall certify to the system
all member contributions which have not been reported previously and
remit such contributions if the participating employer has not submitted
a monthly remittance for the terminating quarter. The participating em-
ployer shall be responsible to the system for any overpayment or under-
payment of member contributions made by the system relating to a with-
drawal of accumulated contributions or a death of an active member
which is due to an inaccurate certification of all member contributions
which have not been reported to the system as required by this section
made by the participating employer. A leave of absence, a period of total
disability or military service shall not be considered a termination of em-
ployment unless the member withdraws accumulated contributions.

    (2) Except as otherwise provided by this subsection, if such member
has completed 10 years of credited service at date of termination, such
member automatically shall be granted a vested retirement benefit in the
system, except that at any time prior to the commencement of retirement
benefit payments the member may withdraw accumulated contributions,
whereupon no other benefits shall be payable for such member's prior
and participating service credit. For purposes of this subsection, any em-
ployee 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 govern-
mental unit in determining whether such employee has met the 10 years
of credited service for vesting requirement contained in this subsection.
Eligibility of such member for retirement benefits and procedures for
making application for retirement benefits shall be in accordance with
K.S.A. 74-4914 and amendments thereto. Such member shall make ap-
plication for retirement in such form as may be prescribed by the board
and retirement benefits shall accrue from the first day of the month fol-
lowing receipt of such application. The amount of the retirement benefit
shall be determined as provided in K.S.A. 74-4915 and amendments
thereto.

    (3) Termination of employment of a member, followed by employ-
ment with a participating employer within five years after such termina-
tion, does not constitute a break in continuous employment if such mem-
ber has not withdrawn accumulated contributions. Such period while not
employed shall not be credited.

    (4) If, after the expiration of five years following the termination of
employment, a former member becomes an employee of such former
member's former participating employer, or another participating em-
ployer, such former member shall be deemed to be a new employee. If
a member, who has a vested benefit again becomes an employee of a
participating employer, any credited service such member subsequently
accrues shall be added to that which had been vested by virtue of previous
service. Eligibility of such member for retirement benefits and proce-
dures for making application for retirement benefits shall be in accord-
ance with K.S.A. 74-4914 and amendments thereto.

    Sec. 20. K.S.A. 1997 Supp. 74-4919a, as amended by section 38 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4919a.
(1) An employee of a participating employer who becomes a member as
provided in K.S.A. 74-4911 and amendments thereto, after completion
of one year of continuous employment as therein provided may purchase
participating service credit for such year of employment by making ap-
plication therefor. Such application and payment may be made at any
time after the employee becomes a member and continues to be em-
ployed by a participating employer. Any member of the system who has
not retired may purchase, subject to the provisions of section 83 and
amendments thereto, such service credit by paying the then present value
of the retirement benefits based on such service by means of a single
lump-sum payment in the amount determined by the actuary using the
member's attained age and the actuarial assumptions and tables currently
in use by this retirement system. If an employee was employed before
the participating employer's entry date and did not become a member
until the first day of the month or the first day of the first payroll period,
whichever is applicable, coinciding with or following the completion of
one year continuous employment, the member may purchase, subject to
the provisions of section 83 and amendments thereto, participating serv-
ice credit for the period from the participating employer's entry date until
such member became a member by paying to the system the then present
value of the retirement benefits based on such service by means of a
single lump-sum payment in the amount determined by the actuary using
the member's attained age and the actuarial assumptions and tables cur-
rently in use by this retirement system.

    Notwithstanding any other provision of this subsection, if an employee
purchases such participating service credit within 12 months of such em-
ployee's membership in the system, such employee may purchase such
participating service credit by making application therefor and paying to
the system a lump-sum amount equivalent to 4% of the compensation paid
to such member for personal services during such period. If an employee
was employed for a partial year after the participating employer's entry
date and did not become a member at that time, but became a member
at a later date, the member may purchase, subject to the provisions of
section 83 and amendments thereto, participating service credit for such
partial year of employment by paying the then present value of the re-
tirement benefits based on such service by means of a single lump-sum
payment in the amount determined by the actuary using the member's
attained age and the actuarial assumptions and tables currently in use by
this retirement system.

    (2) Any employee of the state of Kansas who was receiving or was
eligible for assistance by the state board of regents in the purchase of a
retirement annuity under K.S.A. 74-4925 and amendments thereto, and
who became ineligible for such assistance prior to the effective date of
this act because such employee's position was reclassified to a position in
the classified service under the Kansas civil service act, or who became
ineligible for such assistance because such person accepted and trans-
ferred to a position in the classified service under the Kansas civil service
act, and who becomes a member of the system on the first day of the
payroll period coinciding with or following the effective date of this act
in accordance with subsection (5) of K.S.A. 74-4911 and amendments
thereto, may purchase, subject to the provisions of section 83 and amend-
ments thereto, participating service credit for the period of employment
from the effective date of such reclassification or transfer to the date of
such employee's membership in the system. Such employee may pur-
chase such participating service credit by making application therefor and
paying to the system a lump-sum amount equivalent to 4% of the com-
pensation paid to such member for personal services during such period
by the state of Kansas or as provided in subsection (3). Such application
and payment may be made at any time after the employee becomes a
member and continues to be employed by a participating employer.

    (3) Except as otherwise provided in this subsection, any member of
the retirement system may purchase, subject to the provisions of section
83 and amendments thereto, participating service credit for employment
service as described in this section, if first commenced prior to January
1, 1996, by electing to effect such purchase by means of having employee
contributions as provided in K.S.A. 74-4919 and amendments thereto
deducted from such member's compensation at a percentage rate equal
to two times or three times the employee's rate of contribution as pro-
vided in K.S.A. 74-4919 and amendments thereto for such periods of
service, in lieu of a lump-sum amount as provided in this section. Such
deductions shall commence at the beginning of the quarter following such
election and shall remain in effect until all quarters of such service have
been purchased. Subject to the provisions of section 83 and amendments
thereto, any person may make any such purchase as described in this
section, if first commenced in calendar year 1996 or thereafter, at an
additional rate of contribution, in addition to the employee's rate of con-
tribution as provided in K.S.A. 74-4919 and amendments thereto, based
upon the member's attained age at the time of purchase and using ac-
tuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased. Notwithstanding any other provision of this subsection, any
member of the retirement system, within 12 months of such member's
membership date in the system, may purchase participating service credit
for employment service as described in this section, by electing to effect
such purchase by means of having employee contributions as provided in
K.S.A. 74-4919, and amendments thereto, deducted from such member's
compensation at a percentage rate equal to two times or three times the
employee's rate of contribution as provided in K.S.A. 74-4910, and
amendments thereto, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such deductions shall commence at
the beginning of the quarter following such election and shall remain in
effect until all quarters of such service have been purchased. Such pur-
chase must be completed within 24 months of such membership date in
the system.

    Sec. 21. K.S.A. 1997 Supp. 74-4919h, as amended by section 44 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4919h.
(1) In addition to any military service credited under the provisions of
K.S.A. 74-4913 or 74-4936 and amendments thereto, or in the event that
an active contributing member does not qualify for credit for military
service as defined in subsection (22) of K.S.A. 74-4902 and amendments
thereto, such member may purchase, subject to the provisions of section
83 and amendments thereto, participating credit for periods of active
service in the armed forces of the United States or in the commissioned
corps of the United States public health service and for periods of service
required to fulfill the requirements of section 651 of title 10, United
States code, which are not otherwise creditable, which when added to
any creditable military service do not exceed six years. Except as provided
in subsection (4)(a) for such purchase of participating credit for such
periods of such military service which is the basis for military pension
rights, such member shall be entitled to purchase one quarter of partic-
ipating service credit for each year of service required to fulfill the
requirements of section 651 of title 10, United States code. Except as
otherwise provided in this section, such purchase shall be effected by the
member submitting proof of such service acceptable to the board and, if
first commenced prior to January 1, 1996, electing in writing to have
employee contributions as provided in K.S.A. 74-4919 and amendments
thereto deducted from such member's compensation at a percentage rate
equal to two times or three times the employee's rate of contribution as
provided in K.S.A. 74-4919 and amendments thereto for such periods of
service. Such deductions shall commence at the beginning of the quarter
following such election and shall remain in effect until all of the full
quarters of such service have been purchased. Any person may make any
such purchase as described in this section, subject to the provisions of
section 83 and amendments thereto, if first commenced in calendar year
1996 or thereafter, at an additional rate of contribution, in addition to the
employee's rate of contribution as provided in K.S.A. 74-4919 and amend-
ments thereto, based upon the member's attained age at the time of
purchase and using actuarial assumptions and tables in use by the retire-
ment system at such time of purchase, for such periods of service, in lieu
of a lump-sum amount as provided in this section. Such additional rate
of contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all quarters of such service
have been purchased.

    (2) (a) Such purchase of participating service credit must be com-
pleted prior to such member's retirement.

    (b) For members purchasing such participating service credit on or
after July 1, 1993, whose purchase is completed within five years before
such member's retirement, subject to the provisions of section 83 and
amendments thereto, such member shall pay the actuarially determined
amount by means of a single lump-sum payment or equal annual pay-
ments which shall be completed prior to retirement. The lump-sum pay-
ment or annual payments shall be determined by the system's actuary by
using the member's current annual salary at the time, actuarial assump-
tions and tables currently in use by the system and the member's attained
age. Any member who purchases such participating service credit and
who does not make the lump-sum payment or annual payments as re-
quired by this subsection shall have any previously credited service under
this section voided and such member shall be refunded such member's
payments previously made for such purchase plus interest. The provisions
of this subsection shall not apply to any member who 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, ab-
olition or cessation of operations, and who is laid off from employment
with such institution for the reason of such closure, abolition or cessation.
As used in this subsection, ``institution'' means Topeka state hospital or
Winfield state hospital and training center; and ``laid off'' means, 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 amend-
ments thereto and in the case of a state officer or employee in the un-
classified 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 budget reduction or expenditure authority reduction and reduction of
F.T.E. positions under K.S.A. 75-6801 and amendments thereto.

    (3) In the event such member has elected to purchase participating
service credit as provided in K.S.A. 74-4919a to 74-4919e, inclusive, and
any amendments thereto, the increased employee contributions and pur-
chase of participating service credit provided herein shall not commence
until after the purchase of participating service credit under K.S.A. 74-
4919a to 74-4919e, inclusive, and any amendments thereto, has been
completed. If a member terminates employment before completing the
purchase of all participating service credit as such member may be enti-
tled to, such member shall only receive such credit for those full quarters
as the percentage rate equal to two times or three times the employee's
rate of contribution as provided in K.S.A. 74-4919 and amendments
thereto or those full quarters as the additional rate of contribution, in
addition to the employee's rate of contribution as provided in K.S.A.
74-4919 and amendments thereto has been deducted from such mem-
ber's compensation.

    (4) (a) Any member of the system who has not yet retired may pur-
chase participating service credit for military service as described in this
section which is the basis for military pension rights at an additional rate
of contribution in addition to the employee's rate of contribution as pro-
vided in K.S.A. 74-4919 and amendments thereto, based upon the mem-
ber's attained age at the time of purchase and using actuarial assumptions
and tables in use by the retirement system at the time of such purchase.
Such additional rate of contribution shall commence at the beginning of
the quarter following such election and shall remain in effect until all
quarters of such service have been purchased. Any such member may
purchase, subject to the provisions of section 83 and amendments thereto,
participating service credit for military service as described in this section
by electing to effect such purchase by means of a single lump-sum pay-
ment in lieu of employee contributions as provided in this section. The
lump-sum payment shall be an amount determined by the actuary using
the member's then current annual rate of compensation, or if not actively
employed, the member's annual rate of compensation when last partici-
pating, the actuarial assumptions and tables currently in use by the re-
tirement system and the member's attained age.

    (b) Any member of the retirement system who has not retired may
purchase, subject to the provisions of section 83 and amendments thereto,
participating service credit for military service as described in this section
which is not the basis for military pension rights by electing to effect such
purchase by means of a single lump-sum payment in lieu of employee
contributions as provided in this section. The lump-sum payment shall
be an amount determined by the actuary using the member's then current
annual rate of compensation, or if not actively employed, the member's
annual rate of compensation when last participating, the actuarial as-
sumptions and tables currently in use by the retirement system and the
member's attained age.

    Sec. 22. K.S.A. 74-4919i, as amended by section 45 of 1998 Senate
Bill No. 382, is hereby amended to read as follows: 74-4919i. Any person
who becomes a member of the Kansas public employees retirement sys-
tem pursuant to subsection (14) of K.S.A. 74-4902, subsection (4) of
K.S.A. 74-4932, K.S.A. 74-4911c, K.S.A. 74-4911d or K.S.A. 74-4919k
and amendments thereto, may elect to purchase additional benefits for
any service performed during the period that such person was barred
from membership in the Kansas public employees retirement system,
except that no person shall purchase additional benefits for any service
which is the basis or will become the basis for retirement credit or benefits
under a retirement annuity under the provisions of K.S.A. 74-4925 and
amendments thereto. As used in this section, ``annual compensation''
means the rate of annual compensation being paid to such member by
the participating employer on the date of application to purchase addi-
tional benefits. At the election of the member the benefit for each year of
service shall be equal to either 1% or 1.75% of the final average salary of
any such member. For any member who elected to purchase service credit
as provided in this section prior to the effective date of this act at the 1%
rate, such member may elect to purchase such service credit at an addi-
tional amount of .75% of final average salary of such member in a
lump-sum amount as otherwise provided in this subsection. Such member
may purchase additional benefits by making application therefor at least
three years prior to date of retirement and, subject to the provisions of
section 83 and amendments thereto, by making at an additional rate of
contribution in addition to the employee's rate of contribution as provided
in K.S.A. 74-4919 and amendments thereto, based upon the member's
attained age at the time of purchase and using actuarial assumptions and
tables in use by the retirement system at the time of such purchase. Such
additional rate of contribution shall commence at the beginning of the
quarter following such election and shall remain in effect until all quarters
of such service have been purchased. Any such member may purchase
service as described in this section by electing to effect such purchase by
means of a single lump-sum payment in lieu of employee contributions as
provided in this section in an amount equal to the then present value of
the benefits being purchased as determined by the actuary using the
member's attained age, annual compensation at the time of purchase and
the actuarial assumptions and tables then in use by the system. The lump-
sum payment shall be made immediately upon being notified of the
amount due. The benefit for each such year of service shall be equal to
1% of the annual compensation at the time the member purchases such
additional benefits.

    Sec. 23. K.S.A. 1997 Supp. 74-4919n, as amended by section 49 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4919n.
Any employee of a participating employer who is a member of the Kansas
public employees retirement system, who was previously employed in
another state in nonfederal governmental employment and which service
otherwise meets the requirements of an employee as prescribed in sub-
section (14) of K.S.A. 74-4902 or subsection (4) of K.S.A. 74-4932 and
amendments thereto, may elect to purchase, subject to the provisions of
section 83 and amendments thereto, prior service for such out-of-state
nonfederal governmental employment. At the election of the member, the
benefit for each such year of employment shall be equal to either 1% or
1.75% of the final average salary of any such member. For any member
who elected to purchase service credit as provided in this section prior to
the effective date of this act at the 1% rate, such member may elect to
purchase such service credit at an additional amount of .75% of final
average salary of such member in a lump-sum amount as otherwise pro-
vided in this subsection. Such member may purchase such prior service
by making application therefor prior to date of retirement at an additional
rate of contribution in addition to the employee's rate of contribution as
provided in K.S.A. 74-4919 and amendments thereto, based upon the
member's attained age at the time of purchase and using actuarial as-
sumptions and tables in use by the retirement system at the time of such
purchase. Such additional rate of contribution shall commence at the
beginning of the quarter following such election and shall remain in effect
until all quarters of such service have been purchased. Subject to the
provisions of section 83 and amendments thereto, any such member may
purchase such prior service as described in this section by electing to
effect such purchase by means of a single lump-sum payment in lieu of
employee contributions as provided in this section in an amount equal to
the then present value of the benefits being purchased as determined by
the actuary using the member's attained age, annual compensation at the
time of purchase and the actuarial assumptions and tables then in use by
this system. The lump-sum payment shall be made immediately upon
being notified of the amount due.

    Sec. 24. K.S.A. 1997 Supp. 74-4919p is hereby amended to read as
follows: 74-4919p. Any member may purchase prior service for periods
of service in the United States peace corps which commenced on or after
January 1, 1962. At the election of the member, the benefit for each such
period of service shall be equal to either 1% or 1.75% of the final average
salary of any such member. For any member who elected to purchase
service credit as provided in this section prior to the effective date of this
act at the 1% rate, such member may elect to purchase such service credit
at an additional amount of .75% of final average salary of such member
in a lump-sum amount as otherwise provided in this subsection. Such
member may purchase such prior service by making application therefor
prior to date of retirement at an additional rate of contribution in addition
to the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto, based upon the member's attained age at the time
of purchase and using actuarial assumptions and tables in use by the
retirement system at the time of such purchase. Such additional rate of
contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all quarters of such service
have been purchased. Any such member may purchase prior service as
described in this section by electing to effect such purchase by means of
a single lump-sum payment in lieu of employee contributions as provided
in this section in an amount equal to the then present value of the benefits
being purchased as determined by the actuary using the member's at-
tained age, annual compensation at the time of purchase and the actuarial
assumptions and tables then in use by this system. The lump-sum pay-
ment shall be made immediately upon being notified of the amount due.
No participating employer shall pay the cost, or any part thereof, of any
prior service authorized to be purchased by a member under this section.
The provisions of this section shall be effective on and after July 1, 1996.

    Sec. 25. K.S.A. 1997 Supp. 74-4919q is hereby amended to read as
follows: 74-4919q. Any employee of a participating employer who is a
member of the Kansas public employees retirement system, who was
previously employed as an employee of the memorial union corporation
which is affiliated with Emporia state university, may elect to purchase
prior service for such employment. At the election of the member, the
benefit for each such year of employment shall be equal to either 1% or
1.75% of the final average salary of any such member. For any member
who elected to purchase service credit as provided in this section prior to
the effective date of this act at the 1% rate, such member may elect to
purchase such service credit at an additional amount of .75% of final
average salary of such member in a lump-sum amount as otherwise pro-
vided in this subsection. Such member may purchase such prior service
by making application therefor prior to date of retirement at an additional
rate of contribution in addition to the employee's rate of contribution as
provided in K.S.A. 74-4919 and amendments thereto, based upon the
member's attained age at the time of purchase and using actuarial as-
sumptions and tables in use by the retirement system at the time of such
purchase. Such additional rate of contribution shall commence at the
beginning of the quarter following such election and shall remain in effect
until all quarters of such service have been purchased. Any such member
may purchase prior service as described in this section by electing to
effect such purchase by means of a single lump-sum payment in lieu of
employee contributions as provided in this section in an amount equal to
the then present value of the benefits being purchased as determined by
the actuary using the member's attained age, annual compensation at the
time of purchase and the actuarial assumptions and tables then in use by
this system. The lump-sum payment shall be made immediately upon
being notified of the amount due. No participating employer shall pay
the cost, or any part thereof, of any prior service authorized to be pur-
chased by a member under this section. The provisions of this section
shall be effective on and after July 1, 1996.

    Sec. 26. K.S.A. 1997 Supp. 74-4920 is hereby amended to read as
follows: 74-4920. (1) (a) Upon the basis of each annual actuarial valuation
and appraisal as provided for in subsection (3)(a) of K.S.A. 74-4908 and
amendments thereto, the board shall certify, on or before July 15 of each
year, to the division of the budget in the case of the state and to the agent
for each other participating employer an actuarially determined estimate
of the rate of contribution which will be required, together with all ac-
cumulated contributions and other assets of the system, to be paid by
each such participating employer to pay all liabilities which shall exist or
accrue under the system, including amortization of the actuarial accrued
liability over a period of 40 years commencing on July 1, 1993, and the
actuarial accrued liability for members of the faculty and other persons
who are employed by the state board of regents or by educational insti-
tutions under its management assisted by the state board of regents in
the purchase of retirement annuities as provided in K.S.A. 74-4925 and
amendments thereto, as provided in this section. The actuarial accrued
liability for all participating employers other than the state board of re-
gents relating to members of the faculty and other persons described in
this section, shall be amortized by annual payments that increase 4% for
each year remaining in the amortization period. For all participating em-
ployers other than the state board of regents relating to members of the
faculty and other persons described in this section, the projected unit
credit actuarial cost method shall be used in annual actuarial valuations,
commencing with the 1993 valuation, to determine the employer contri-
bution rates that shall be certified by the board. The actuarial accrued
liability for members of the faculty and other persons described in this
subsection assisted by the state board of regents in the purchase of re-
tirement annuities as provided in K.S.A. 74-4925 and amendments
thereto shall be amortized by annual level payments over a period of 10
11 years commencing July 1, 1993. Such certified rate of contribution
shall be based on the standards set forth in subsection (3)(a) of K.S.A.
74-4908 and amendments thereto and shall not be based on any other
purpose outside of the needs of the system.

    (b) (i) For employers affiliating on and after January 1, 1999, upon
the basis of an annual actuarial valuation and appraisal of the system
conducted in the manner provided for in K.S.A. 74-4908 and amendments
thereto, the board shall certify, on or before July 15 of each year to each
such employer an actuarially determined estimate of the rate of contri-
bution which shall be required to be paid by each such employer to pay
all of the liabilities which shall accrue under the system from and after
the entry date as determined by the board, upon recommendation of the
actuary. Such rate shall be termed the employer's participating service
contribution and shall be uniform for all participating employers. Such
additional liability shall be amortized over a period of 34 years com-
mencing on July 1, 1999, by annual payments that increase 4% for each
year remaining in the amortization period. For all participating employers
described in this section, the projected unit credit actuarial cost method
shall be used in annual actuarial valuations to determine the employer
contribution rates that shall be certified by the board.

    (ii) The board shall determine for each such employer separately an
amount sufficient to amortize over a period of not to exceed 34 years
commencing July 1, l999, all liabilities for prior service costs which shall
have accrued at the time of entry into the system. On the basis of such
determination the board shall annually certify to each such employer sep-
arately an actuarially determined estimate of the rate of contribution
which shall be required to be paid by that employer to pay all of the
liabilities for such prior service costs. Such rate shall be termed the em-
ployer's prior service contribution.

    (2) The division of the budget and the governor shall include in the
budget and in the budget request for appropriations for personal services
the sum required to satisfy the state's obligation under this act as certified
by the board and shall present the same to the legislature for allowance
and appropriation.

    (3) Each other participating employer shall appropriate and pay to
the system a sum sufficient to satisfy the obligation under this act as
certified by the board.

    (4) Each participating employer is hereby authorized to pay the em-
ployer's contribution from the same fund that the compensation for which
such contribution is made is paid from or from any other funds available
to it for such purpose. Each political subdivision, other than an instru-
mentality of the state, which is by law authorized to levy taxes for other
purposes, may levy annually at the time of its levy of taxes, a tax which
may be in addition to all other taxes authorized by law for the purpose of
making its contributions under this act and, in the case of cities and coun-
ties, to pay a portion of the principal and interest on bonds issued under
the authority of K.S.A. 12-1774 and amendments thereto by cities located
in the county, which tax, together with any other fund available, shall be
sufficient to enable it to make such contribution. In lieu of levying the
tax authorized in this subsection, any taxing subdivision may pay such
costs from any employee benefits contribution fund established pursuant
to K.S.A. 12-16,102 and amendments thereto. Each participating em-
ployer which is not by law authorized to levy taxes as described above,
but which prepares a budget for its expenses for the ensuing year and
presents the same to a governing body which is authorized by law to levy
taxes as described above, may include in its budget an amount sufficient
to make its contributions under this act which may be in addition to all
other taxes authorized by law. Such governing body to which the budget
is submitted for approval, may levy a tax sufficient to allow the partici-
pating employer to make its contributions under this act, which tax, to-
gether with any other fund available, shall be sufficient to enable the
participating employer to make the contributions required by this act.

    (5) The rate of contribution certified to a participating employer as
provided in this section shall apply during the fiscal year of the partici-
pating employer which begins in the second calendar year following the
year of the actuarial valuation. For the fiscal year commencing in calendar
year 1993, the employer rate of contribution for the state of Kansas and
for participating employers under K.S.A. 74-4931 and amendments
thereto shall be 3.1% of the amount of compensation upon which mem-
bers contribute during the period. For the fiscal year commencing in
calendar year 1994, the employer rate of contribution for the state of
Kansas and for participating employers under K.S.A. 74-4931 and amend-
ments thereto shall be 3.2% of the amount of compensation upon which
members contribute during the period. For the fiscal year commencing
in calendar year 1994, the employer rate of contribution for participating
employers other than the state of Kansas shall be 2.2% of the amount of
compensation upon which members contribute during the period. Except
as specifically provided in this section, for the fiscal year commencing in
calendar year 1995, the rate of contribution certified to a participating
employer shall in no event exceed such participating employer's contri-
bution rate for the immediately preceding fiscal year by more than 0.1%
of the amount of compensation upon which members contribute during
the period. Except as specifically provided in this section, for fiscal years
commencing in calendar year 1996 and in each subsequent calendar year,
the rate of contribution certified to the state of Kansas shall in no event
exceed the state's contribution rate for the immediately preceding fiscal
year by more than 0.2% of the amount of compensation upon which
members contribute during the period. Except as specifically provided in
this section, for fiscal years commencing in calendar year 1997 and in
each subsequent calendar year, the rate of contribution certified to par-
ticipating employers other than the state of Kansas shall in no event ex-
ceed such participating employer's contribution rate for the immediately
preceding fiscal year by more than 0.15% of the amount of compensation
upon which members contribute during the period. There shall be an
employer rate of contribution certified to the state of Kansas and partic-
ipating employers under K.S.A. 74-4931 and amendments thereto. There
shall be a separate employer rate of contribution certified to all other
participating employers other than the state of Kansas.

    (6) The actuarial cost of any legislation enacted in the 1994 session
of the Kansas legislature will be included in the June 30, 1994, actuarial
valuation in determining contribution rates for participating employers.

    (7) The actuarial cost of the provisions of section 50 will be included
in the June 30, 1998, actuarial valuation in determining contribution rates
for participating employers. The actuarial accrued liability incurred for
the provisions of section 50 shall be amortized over 15 years.

    (8) The board with the advice of the actuary may fix the contribution
rates for participating employers joining the system after one year from
the first entry date or for employers who exercise the option contained
in K.S.A. 74-4912 and amendments thereto at rates different from the
rate fixed for employers joining within one year of the first entry date.

    (9) For employers affiliating on and after January 1, 1999, the rates
of contribution certified to the participating employer as provided in this
section shall apply during the fiscal year immediately following such cer-
tification, but the rate of contribution during the first year following the
employer's entry date shall be equal to 7% of the amount of compensation
on which members contribute during the year. Any amount of such first
year's contribution which may be in excess of the necessary current service
contribution shall be credited by the board to the respective employer's
prior service liability.

    (8) (10) Employer contributions shall in no way be limited by any
other act which now or in the future establishes or limits the compen-
sation of any member.

    (9) (11) Notwithstanding any provision of law to the contrary, each
participating employer shall remit quarterly, or as the board may other-
wise provide, all employee deductions and required employer contribu-
tions to the executive secretary for credit to the Kansas public employees
retirement fund within 20 three days after the end of the period covered
by the remittance or within 25 days after forms or written instructions
from the system were mailed by the system to such employer, whichever
is later by electronic funds transfer. Remittances of such deductions and
contributions received after such date are delinquent. Delinquent pay-
ments due under this subsection shall be subject to interest at the rate
established for interest on judgments under subsection (a) of K.S.A. 16-
204 and amendments thereto. At the request of the board, delinquent
payments which are due or interest owed on such payments, or both, may
be deducted from any other moneys payable to such employer by any
department or agency of the state.

    Sec. 27. K.S.A. 1997 Supp. 74-4921 is hereby amended to read as
follows: 74-4921. (1) There is hereby created in the state treasury the
Kansas public employees retirement fund. All employee and employer
contributions shall be deposited in the state treasury to be credited to the
Kansas public employees retirement fund. The fund is a trust fund and
shall be used solely for the exclusive purpose of providing benefits to
members and member beneficiaries and defraying reasonable expenses
of administering the fund. Investment income of the fund shall be added
or credited to the fund as provided by law. All benefits payable under the
system, refund of contributions and overpayments, purchases or invest-
ments under the law and expenses in connection with the system unless
otherwise provided by law shall be paid from the fund. The director of
accounts and reports is authorized to draw warrants on the state treasurer
and against such fund upon the filing in the director's office of proper
vouchers executed by the chairperson or the executive secretary of the
board. As an alternative, payments from the fund may be made by credits
to the accounts of recipients of payments in banks, savings and loan as-
sociations and credit unions. A payment shall be so made only upon the
written authorization and direction of the recipient of payment and upon
receipt of such authorization such payments shall be made in accordance
therewith. Orders for payment of such claims may be contained on (a) a
letter, memorandum, telegram, computer printout or similar writing, or
(b) any form of communication, other than voice, which is registered upon
magnetic tape, disc or any other medium designed to capture and contain
in durable form conventional signals used for the electronic communi-
cation of messages.

    (2) The board shall have the responsibility for the management of
the fund and shall discharge the board's duties with respect to the fund
solely in the interests of the members and beneficiaries of the system for
the exclusive purpose of providing benefits to members and such mem-
ber's beneficiaries and defraying reasonable expenses of administering
the fund and shall invest and reinvest moneys in the fund and acquire,
retain, manage, including the exercise of any voting rights and disposal of
investments of the fund within the limitations and according to the pow-
ers, duties and purposes as prescribed by this section.

    (3) Moneys in the fund shall be invested and reinvested to achieve
the investment objective which is preservation of the fund to provide
benefits to members and member beneficiaries, as provided by law and
accordingly providing that the moneys are as productive as possible, sub-
ject to the standards set forth in this act. No moneys in the fund shall be
invested or reinvested if the sole or primary investment objective is for
economic development or social purposes or objectives.

    (4) In investing and reinvesting moneys in the fund and in acquiring,
retaining, managing and disposing of investments of the fund, the board
shall exercise the judgment, care, skill, prudence and diligence under the
circumstances then prevailing, which persons of prudence, discretion and
intelligence acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of like character and with like aims
by diversifying the investments of the fund so as to minimize the risk of
large losses, unless under the circumstances it is clearly prudent not to
do so, and not in regard to speculation but in regard to the permanent
disposition of similar funds, considering the probable income as well as
the probable safety of their capital.

    (5) Notwithstanding subsection (4): (a) Total investments in common
stock may be made in the amount of up to 60% of the total book value
of the fund;

    (b) the board may invest or reinvest moneys of the fund in alternative
investments if the following conditions are satisfied:

    (i) The total of such alternative investments does not exceed more
than 5% of the total investment assets of the fund. If the total of such
alternative investments exceeds more than 5% of the total investment
assets of the fund on the effective date of this act, the board shall not
invest or reinvest any moneys of the fund in alternative investments until
the total of such alternative investments is less the 5% of the total in-
vestment assets of the fund subject to the 5% limitation contained in this
subsection. Nothing in this subsection requires the board to liquidate or
sell the system's holdings in any alternative investment held by the system
on the effective date of this act, unless such liquidation or sale would be
in the best interest of the members and beneficiaries of the system and
be prudent under the standards contained in this section. The 5% limi-
tation contained in this section shall not have been violated if the total of
such alternative investments exceeds 5% of the total investment assets of
the fund as a result of market forces acting to increase the value of such
alternative investments relative to the rest of the system's investments;
however, the board shall not invest or reinvest any moneys of the fund
in alternative investments until the total of such alternative investments
is less than 5% of the total investment assets of the fund subject to the
5% limitation contained in this subsection;

    (ii) if in addition to the system, there are at least two other sophisti-
cated investors, as defined by section 301 of the securities and exchange
act of 1933;

    (iii) the system's share in any individual alternative investment is lim-
ited to an investment representing not more than 20% of any such indi-
vidual alternative investment;

    (iv) the system has received a favorable and appropriate recommen-
dation from a qualified, independent expert in investment management
or analysis in that particular type of alternative investment;

    (v) the alternative investment is consistent with the system's invest-
ment policies and objectives as provided in subsection (6);

    (vi) the individual alternative investment does not exceed more than
2.5% of the total alternative investments made under this subsection. If
the alternative investment is made pursuant to participation by the system
in a multi-investor pool, the 2.5% limitation contained in this subsection
is applied to the underlying individual assets of such pool and not to
investment in the pool itself. The total of such alternative investments
made pursuant to participation by the system in any one individual multi-
investor pool shall not exceed more than 20% of the total of alternative
investments made by the system pursuant to this subsection. Nothing in
this subsection requires the board to liquidate or sell the system's holdings
in any alternative investments made pursuant to participation by the sys-
tem in any one individual multi-investor pool held by the system on the
effective date of this act, unless such liquidation or sale would be in the
best interest of the members and beneficiaries of the system and be pru-
dent under the standards contained in this section. The 20% limitation
contained in this subsection shall not have been violated if the total of
such investment in any one individual multi-investor pool exceeds 20%
of the total alternative investments of the fund as a result of market forces
acting to increase the value of such a multi-investor pool relative to the
rest of the system's alternative investments; however, the board shall not
invest or reinvest any moneys of the fund in any such individual multi-
investor pool until the value of such individual multi-investor pool is less
than 20% of the total alternative investments of the fund;

    (vii) the board has received and considered the investment manager's
due diligence findings submitted to the board as required by subsection
(6)(c); and

    (viii) prior to the time the alternative investment is made, the system
has in place procedures and systems to ensure that the investment is
properly monitored and investment performance is accurately measured.

    For purposes of this act, ``alternative investment'' means nontraditional
investments outside the established nationally recognized public stock
exchanges and government securities market. Alternative investments
shall include, but not be limited to, private placements, venture capital,
partnerships, limited partnerships and leveraged buyout partnerships;

    (c) except as otherwise provided, the board may invest or reinvest
moneys of the fund in real estate investments if the following conditions
are satisfied:

    (i) If, in addition to the system, there are at least two other sophis-
ticated investors, as defined by section 301 of the securities and exchange
act of 1933;

    (ii) the system's share in any individual real estate investment is lim-
ited to an investment representing not more than 20% of any such indi-
vidual real estate investment;

    (iii) The system has received a favorable and appropriate recommen-
dation from a qualified, independent expert in investment management
or analysis in that particular type of real estate investment;

    (iv) (ii) the real estate investment is consistent with the system's in-
vestment policies and objectives as provided in subsection (6); and

    (v) the total of such real estate investments made pursuant to partic-
ipation by the system in any one individual multi-investor pool shall not
exceed more than 20% of the total of real estate investments made by
the system pursuant to this subsection. Nothing in this subsection re-
quires the board to liquidate or sell the system's holdings in any real estate
investments made pursuant to participation by the system in any one
individual multi-investor pool held by the system on the effective date of
this act, unless such liquidation or sale would be in the best interest of
the members and beneficiaries of the system and be prudent under the
standards contained in this section. The 20% limitation contained in this
subsection shall not have been violated if the total of such investment in
any one individual multi-investor pool exceeds 20% of the total real estate
investments of the fund as a result of market forces acting to increase the
value of such a multi-investor pool relative to the rest of the system's real
estate investments; however, the board shall not invest or reinvest any
moneys of the fund in any such individual multi-investor pool until the
value of such individual multi-investor pool is less than 20% of the total
real estate investments of the fund;

    (vi) (iii) the board has received and considered the investment man-
ager's due diligence findings submitted to the board as required by sub-
section (6)(c);

    (vii) prior to the time the real estate investment is made, the system
has in place procedures and systems to ensure that the investment is
properly monitored and investment performance is accurately measured;
and

    (viii) the provisions of this subsection shall not apply to any real estate
investment held by the system on July 1, 1992; and

    (d) the board shall not invest or reinvest moneys of the fund in any
banking institution, savings and loan association or credit union which
positions the system as a shareholder or owner of such banking institution,
savings and loan association or credit union.

    (6) Subject to the objective set forth in subsection (3) and the stan-
dards set forth in subsections (4) and (5) the board shall formulate policies
and objectives for the investment and reinvestment of moneys in the fund
and the acquisition, retention, management and disposition of invest-
ments of the fund. Such policies and objectives shall include:

    (a) Specific asset allocation standards and objectives;

    (b) establishment of criteria for evaluating the risk versus the poten-
tial return on a particular investment;

    (c) a requirement that all investment managers submit such man-
ager's due diligence findings on each investment to the board or invest-
ment advisory committee for approval or rejection prior to making any
alternative investment;

    (d) a requirement that all investment managers shall immediately re-
port all instances of default on investments to the board and provide the
board with recommendations and options, including, but not limited to,
curing the default or withdrawal from the investment; and

    (e) establishment of criteria that would be used as a guideline for
determining when no additional add-on investments or reinvestments
would be made and when the investment would be liquidated.

    The board shall review such policies and objectives, make changes con-
sidered necessary or desirable and readopt such policies and objectives
on an annual basis.

    (7) The board may enter into contracts with one or more persons
whom the board determines to be qualified, whereby the persons under-
take to perform the functions specified in subsection (2) to the extent
provided in the contract. Performance of functions under contract so
entered into shall be paid pursuant to rates fixed by the board subject to
provisions of appropriation acts and shall be based on specific contractual
fee arrangements. The system shall not pay or reimburse any expenses of
persons contracted with pursuant to this subsection, except that after
approval of the board, the system may pay approved investment related
expenses subject to provisions of appropriation acts. The board shall re-
quire that a person contracted with to obtain commercial insurance which
provides for errors and omissions coverage for such person in an amount
to be specified by the board, provided that such coverage shall be at least
the greater of $500,000 or 1% of the funds entrusted to such person up
to a maximum of $10,000,000. The board shall require a person con-
tracted with to give a fidelity bond in a penal sum as may be fixed by law
or, if not so fixed, as may be fixed by the board, with corporate surety
authorized to do business in this state. Such persons contracted with the
board pursuant to this subsection and any persons contracted with such
persons to perform the functions specified in subsection (2) shall be
deemed to be agents of the board and the system in the performance of
contractual obligations.

    (8) (a) In the acquisition or disposition of securities, the board may
rely on the written legal opinion of a reputable bond attorney or attorneys,
the written opinion of the attorney of the investment counselor or man-
agers, or the written opinion of the attorney general certifying the legality
of the securities.

    (b) The board shall employ or retain qualified investment counsel or
counselors or may negotiate with a trust company to assist and advise in
the judicious investment of funds as herein provided.

    (9) (a) Except as provided in subsection (7) and this subsection, the
custody of money and securities of the fund shall remain in the custody
of the state treasurer, except that the board may arrange for the custody
of such money and securities as it considers advisable with one or more
member banks or trust companies of the federal reserve system or with
one or more banks in the state of Kansas, or both, to be held in safe-
keeping by the banks or trust companies for the collection of the principal
and interest or other income or of the proceeds of sale. The services
provided by the banks or trust companies shall be paid pursuant to rates
fixed by the board subject to provisions of appropriation acts.

    (b) The state treasurer and the board shall collect the principal and
interest or other income of investments or the proceeds of sale of secu-
rities in the custody of the state treasurer and pay same when so collected
into the fund.

    (c) The principal and interest or other income or the proceeds of sale
of securities as provided in clause (a) of this subsection (9) shall be re-
ported to the state treasurer and the board and credited to the fund.

    (10) The board shall with the advice of the director of accounts and
reports establish the requirements and procedure for reporting any and
all activity relating to investment functions provided for in this act in order
to prepare a record monthly of the investment income and changes made
during the preceding month. The record will reflect a detailed summary
of investment, reinvestment, purchase, sale and exchange transactions
and such other information as the board may consider advisable to reflect
a true accounting of the investment activity of the fund.

    (11) The board shall provide for an examination of the investment
program annually. The examination shall include an evaluation of current
investment policies and practices and of specific investments of the fund
in relation to the objective set forth in subsection (3), the standard set
forth in subsection (4) and other criteria as may be appropriate, and rec-
ommendations relating to the fund investment policies and practices and
to specific investments of the fund as are considered necessary or desir-
able. The board shall include in its annual report to the governor as pro-
vided in K.S.A. 74-4907, and amendments thereto, a report or a summary
thereof covering the investments of the fund.

    (12) (a) The legislative post auditor shall conduct an annual financial-
compliance audit of the system, performance audits of the system as pre-
scribed by this section and under the Kansas governmental operations
law, and such other audits as are directed by the legislative post audit
committee under the Kansas legislative post audit act. The annual finan-
cial-compliance audit shall include, but not be limited to, a review of
alternative investments of the system with any estimates of permanent
impairments to the value of such alternative investments reported by the
system pursuant to K.S.A. 74-4907, and amendments thereto.

    (b) Except as otherwise provided by this subsection, the legislative
post auditor shall conduct annual performance audits, as directed by the
legislative post audit committee, which shall include, but not be limited
to, one or more of the following subjects: An evaluation of the perform-
ance of investment managers, an evaluation of the rates of return of in-
vestments reported by the system, an evaluation of the total compensation
received for the planned year by investment managers by individual in-
vestment classification, and a comparison of the system's investment prac-
tices and performance with the investment practices and performance of
other state pension programs by asset type, including all asset types de-
scribed as alternative investments in subsection (5)(b). Commencing with
the performance audit for the fiscal year ending June 30, 1994, the leg-
islative post audit committee shall specify which of the subjects listed in
this subsection shall be included in each performance audit conducted
pursuant to this subsection, in addition to such other subjects as may be
directed to be included in the performance audit by the legislative post
audit committee. Commencing with the performance audit for the fiscal
year ending June 30, 1994, each of the subjects listed in this subsection
shall be included at least once every two fiscal years in a performance
audit conducted pursuant to this subsection, excluding any fiscal year
during which the system and the board are subject to review and evalu-
ation by the legislature under the Kansas governmental operations ac-
countability law. Except as otherwise directed by the legislative post audit
committee, no performance audit shall be conducted pursuant to this
subsection during any fiscal year when the system and the board are
subject to a performance audit and to review and evaluation under the
Kansas governmental operations accountability law.

    (c) The auditor to conduct any audit required pursuant to this sub-
section shall be specified in accordance with K.S.A. 46-1122, and amend-
ments thereto. If the legislative post audit committee specifies under such
statute that a firm, as defined by K.S.A. 46-1112, and amendments
thereto, is to perform all or part of the audit work of such audit, such
firm shall be selected and shall perform such audit work as provided in
K.S.A. 46-1123, and amendments thereto, and K.S.A. 46-1125 through
46-1127, and amendments thereto. The audits required pursuant to this
subsection shall be conducted in accordance with generally accepted gov-
ernmental auditing standards. The audits required pursuant to this sub-
section shall be conducted as soon after the close of the fiscal year as
practicable, but shall be completed no later than six months after the
close of the fiscal year. The post auditor shall annually compute the rea-
sonably anticipated cost of providing the financial-compliance audit pur-
suant to this section, subject to review and approval by the contract audit
committee established by K.S.A. 46-1120, and amendments thereto.
Upon such approval, the system shall reimburse the division of post audit
for the amount approved by the contract audit committee. The furnishing
of the financial-compliance audit pursuant to this section shall be a trans-
action between the legislative post auditor and the system and shall be
settled in accordance with the provisions of K.S.A. 75-5516, and amend-
ments thereto.

    (d) Any internal assessment or examination of alternative investments
of the system performed by any person or entity employed or retained
by the board which evaluates or monitors the performance of alternative
investments shall be reported to the legislative post auditor so that such
report may be reviewed in accordance with the annual audits provided in
subsection (12)(a).

    Sec. 28. K.S.A. 74-4924 is hereby amended to read as follows: 74-
4924. (1) Any person who shall knowingly make any false statement, or
who shall falsify or permit to be falsified any record necessary for carrying
out the intent of this act for the purpose of committing fraud, shall be
guilty of a misdemeanor, and upon conviction shall be punished by a fine
not exceeding five hundred dollars ($500) or by imprisonment for not
exceeding one (1) year subject to the provisions of K.S.A. 21-3904 and
amendments thereto.

    (2) Should any error in any records or in any calculation of the Kansas
public employees retirement system result in any member or beneficiary
receiving more or less than he would have been entitled to receive had
the records or calculations been correct, the board shall correct such
error, and, as far as practicable, make future payments in such a manner
that the actuarial equivalent of the benefit to which such member or
beneficiary was entitled shall be paid, and to this end and may recover
any overpayments: Provided,. In the event a member has withdrawn, all
or part of, his such member's accumulated contributions in a manner not
in compliance with the provisions of this act or the regulations of the
system the amount of such withdrawal, plus interest at a rate specified
by the board, shall be deducted from any amounts, including group in-
surance benefits, which shall become due the member or his such mem-
ber's beneficiaries under the provisions of this act.

    Sec. 29. K.S.A. 1997 Supp. 74-4927, as amended by section 53 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4927.
(1) The board may establish a plan of death and long-term disability ben-
efits 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 662/3% of the member's annual rate of compensation on the date
such disability commenced and shall be payable in equal monthly install-
ments. 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 for-
mula 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, which-
ever 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 ac-
cidental 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 insured long-term disability
benefit payments under such plan, except that not more than 50% of such
workers compensation benefits shall be deducted therefrom. During the
period in which such member is pursuing such administrative remedies
prior to a final decision of the social security administration, social se-
curity disability benefits may be estimated and may be deducted from the
amount of long-term disability benefit payments under such plan. Such
insured 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 insured long-term disability benefits
receive less than $50 per month. As used in this section, ``workers com-
pensation benefits'' means the total award of disability benefit payments
under the workers compensation act notwithstanding any payment of at-
torney 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; lim-
itations 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 disa-
bled, 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
insured long-term disability benefit as described in this section shall not
be eligible to receive such benefit due to visual impairment as such im-
pairment 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 ac-
cordance 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 dis-
ability. 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 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 disa-
bility occurs 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 em-
ployment, the plan of death and long-term disability benefits shall be
subject to adjustment from time to time by the board within the limita-
tions 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 acci-
dent and health insurance in Kansas, to underwrite or to administer or
to both underwrite and administer either the insured death benefit or the
insured long-term disability benefit or both such benefits. Each such con-
tract 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 insured 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 com-
missions be paid thereon.

    (4) (A) There is hereby created in the state treasury the group in-
surance 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. Each participat-
ing employer shall appropriate and pay to the system in such manner as
the board shall prescribe in addition to the employee and employer re-
tirement contributions an amount equal to .6% of the amount of com-
pensation on which the members' contributions to the Kansas public em-
ployees retirement system are based for deposit in the group insurance
reserve fund.

    (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 amend-
ments 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 deter-
mining 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 pro-
vided under the plan of death and long-term disability benefits authorized
by this section shall be known and referred to as insured long-term dis-
ability 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 disa-
bility 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, spec-
ifications 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 ben-
efits 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 discrim-
inate against any particular age group. The board shall have full admin-
istrative 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 admin-
istration 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 retire-
ment 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 spec-
ified under this subsection until after July 1, 1988.

    Sec. 30. K.S.A. 1997 Supp. 74-4936a, as amended by section 63 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4936a.
Any employee of a participating employer who is a member of the Kansas
public employees retirement system, who was previously employed in a
teaching position with a public school system of another state, in a foreign
teaching service in an overseas dependents' school, in a recognized
teacher exchange program or in any program where a teacher is chosen
by the Kansas department of education to teach in a foreign country and
which service otherwise meets the requirements of an employee as pre-
scribed in subsection (14) of K.S.A. 74-4902 or subsection (4) of K.S.A.
74-4932 and amendments thereto may elect to purchase prior service for
such out-of-state public school or overseas teaching employment. At the
election of the member, the benefit for each such year of employment
shall be equal to either 1% or 1.75% of the final average salary of any
such member. For any member who elected to purchase service credit as
provided in this section prior to the effective date of this act at the 1%
rate, such member may elect to purchase such service credit at an addi-
tional amount of .75% of final average salary of such member in a
lump-sum amount as otherwise provided in this subsection. Subject to
the provisions of section 83 and amendments thereto, such member may
purchase such prior service credit by making application therefor prior
to date of retirement at an additional rate of contribution in addition to
the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto, based upon the member's attained age at the time
of purchase and using actuarial assumptions and tables in use by the
retirement system at the time of such purchase. Such additional rate of
contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all quarters of such service
have been purchased. Subject to the provisions of section 83 and amend-
ments thereto, any such member may purchase such prior service credit
as described in this section by electing to effect such purchase by means
of a single lump-sum payment in lieu of employee contributions as pro-
vided in this section in an amount equal to the then present value of the
benefits being purchased as determined by the actuary using the mem-
ber's attained age, annual compensation at the time of purchase and the
actuarial assumptions and tables then in use by this system. The lump-
sum payment shall be made immediately upon being notified of the
amount due.

    Sec. 31. K.S.A. 1997 Supp. 74-4937 is hereby amended to read as
follows: 74-4937. (1) The normal retirement date of a member of the
system who is in school employment and who is subject to K.S.A. 74-
4940 and amendments thereto shall be the first day of the month coin-
ciding with or following termination of employment not followed by em-
ployment with any participating employer within 30 days and the end of
the school fiscal year in which the member attains age 65 or, commencing
July 1, 1986, age 65 or age 60 with the completion of 35 years of credited
service or at any age with the completion of 40 years of credited service,
or commencing July 1, 1993, any alternative normal retirement date al-
ready prescribed by law or 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. Each member upon giving prior notice to the appointing authority
and the retirement system may retire on the normal retirement date or
the first day of any month thereafter.

    (2) Any member who is in school employment and who is subject to
K.S.A. 74-4940 and amendments thereto may retire before such mem-
ber's normal retirement date on the first day of the month coinciding with
or following termination of employment not followed by employment with
any participating employer within 30 days and the completion of the
school fiscal year in which such member attained age 55 with the com-
pletion of 10 years of credited service, 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.

    (3) No member who begins a year of school employment and who is
subject to K.S.A. 74-4940 and amendments thereto may retire until the
first day of the month coinciding with or following the end of the current
school fiscal year unless good cause is shown and such retirement is
agreed to by the participating employer and the board.

    (4) As used in this section ``school fiscal year'' means the twelve-
month period beginning July 1 and ending June 30.

    Sec. 32. K.S.A. 1997 Supp. 74-4939 is hereby amended to read as
follows: 74-4939. (1) Except as otherwise provided in this section, the
provisions of K.S.A. 74-4919 and 74-4920, and amendments thereto, shall
apply to employee and employer contributions and obligations.

    (2) The employer contribution rate for participating employers who
are eligible employers as specified in subsections (1), (2) and (3) of K.S.A.
74-4931 and amendments thereto shall be as certified by the board. Par-
ticipating employers shall certify to the state board of education before
September 15 of each year the anticipated total compensation to be paid
during the next fiscal year to employees who are or are to become mem-
bers. The state board of education shall transmit the information neces-
sary to the division of the budget and the governor who shall include in
the budget and budget document each year thereafter provisions for the
transfer from the state general fund of sufficient sums to satisfy the par-
ticipating employer's obligation under this act. The director of accounts
and reports shall make a transfer therefor to the system quarterly, at the
same time such employee contributions are remitted by such participating
employers. Such transfer from the general fund of sufficient sums to
satisfy the participating employer's obligation shall not include any ad-
justments for individual employee's service in prior periods and any re-
quired payment by a participating employer pursuant to K.S.A. 74-4990
and amendments thereto and section 52 and amendments thereto. The
employer's obligation for such adjustments shall be paid by the partici-
pating employer. Transfers required by this subsection shall be provided
for annually by act of the legislature.

    (3) Participating employers who are eligible employers as specified
in subsection (4) of K.S.A. 74-4931 and amendments thereto shall pay to
the system employer contributions at a rate of contribution as certified
by the board.

    (4) Upon the effective date of this act, the transfers for the employer's
obligation pursuant to subsection (2) for the quarter commencing on Jan-
uary 1, 1987, shall be made on July 1, 1987, together with interest thereon
at the rate of 6.72% per annum from the date the payment would have
been made as provided in this section immediately prior to this amend-
ment until the date paid.

    Sec. 33. K.S.A. 1997 Supp. 74-4952, as amended by section 65 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4952.
As used in K.S.A. 74-4951 et seq. and amendments thereto:

    (1) ``Accumulated contributions'' means the sum of all contributions
by a member to the system which shall be credited to the member's
account with interest allowed thereon after June 30, 1982.

    (2) ``Disability'' means the total inability to perform permanently the
duties of the position of a policeman or fireman.

    (3) ``Eligible employer'' means any city, county, township or other
political subdivision of the state employing one or more employees as
firemen or policemen.

    (4) ``Employee'' means any policeman or fireman employed by a par-
ticipating employer whose employment for police or fireman purposes is
not seasonal or temporary and requires at least 1,000 hours of work per
year.

    (5) ``Entry date'' means the date as of which an eligible employer
joins the system; the first entry date pursuant to this act is January 1,
1967.

    (6) ``Final average salary'' means:

    (a) For members who are first hired as an employee, as defined in
subsection (4), before July 1, 1993, the average highest annual compen-
sation paid to a member for any three of the last five years of participating
service immediately preceding retirement or termination of employment,
or if participating service is less than three years, then the average annual
compensation paid to the member during the full period of participating
service, or if a member has less than one calendar year of participating
service, then the member's final average salary shall be computed by
multiplying the member's highest monthly salary received in that year by
12;

    (b) for members who are first hired as an employee, as defined in
subsection (4), on and after July 1, 1993, the average highest annual salary,
as defined in subsection (34) of K.S.A. 74-4902 and amendments thereto,
paid to a member for any three of the last five years of participating
service immediately preceding retirement or termination of employment,
or if participating service is less than three years, then the average annual
salary, as defined in subsection (34) of K.S.A. 74-4902 and amendments
thereto, paid to the member during the full period of participating service,
or if a member has less than one calendar year of participating service,
then the member's final average salary shall be computed by multiplying
the member's highest monthly salary received in that year by 12;

    (c) for purposes of subparagraphs (a) and (b) of this subsection, the
date that such member is first hired as an employee for members who
are employees of employers that elected to participate in the system on
or after January 1, 1994, shall be the date that such employee's employer
elected to participate in the system; and

    (d) for any application to purchase or repurchase service credit for a
certain period of service as provided by law received by the system after
May 17, 1994, for any member who will have contributions deducted from
such member's compensation at a percentage rate equal to two or three
times the employee's rate of contribution or who will have contributions
deducted from such member's compensation at an additional rate of con-
tribution, in addition to the employee's rate of contribution as provided
in K.S.A. 74-4919 and amendments thereto or will begin paying to the
system a lump-sum amount for such member's purchase or repurchase,
and such deductions or lump-sum payment commences after the com-
mencement of the first payroll period in the third quarter, ``final average
salary'' shall not include any amount of compensation or salary which is
based on such member's purchase or repurchase. Any application to pur-
chase or repurchase multiple periods of service shall be treated as mul-
tiple applications.

    (e) Notwithstanding any other provision of this section, for purposes
of applying limits as provided by the federal internal revenue code, salary
shall have the meaning as determined pursuant to section 83 and amend-
ments thereto.

    (7) ``Retirement benefit'' means a monthly income or the actuarial
equivalent thereof paid in such manner as specified by the member as
provided under the system or as otherwise allowed to be paid at the
discretion of the board, with benefits accruing from the first day of the
month coinciding with or following retirement and ending on the last day
of the month in which death occurs. Upon proper identification such
surviving spouse may negotiate the warrant issued in the name of the
retirant.

    (8) ``Normal retirement date'' means the date on or after which a
member may retire with eligibility for retirement benefits for age and
service as provided in subsections (1) and (3) of K.S.A. 74-4957 and
amendments thereto;

    (9) ``Retirement system'' or ``system'' means the Kansas police and
firemen's retirement system as established by this act and as it may be
hereafter amended.

    (10) ``Service-connected'' means with regard to a death or any phys-
ical or mental disability, any such death or disability resulting from ex-
ternal force, violence or disease occasioned by an act of duty as a police-
man or fireman and, for any member after five years of credited service,
includes there shall be a rebuttable presumption, that any death or disa-
bility resulting from a heart disease or disease of the lung or respiratory
tract or cancer as provided in this subsection, except that in the event
that the member ceases to be a contributing member except by reason
of a service-connected disability for a period of six months or more and
then again becomes a contributing member, the provision relating to
death or disability resulting from a heart disease, disease of the lung or
respiratory tract or cancer as provided in this subsection shall not apply
until such member has again become a contributing member for a period
of not less than two years or unless clear and precise evidence is presented
that the heart disease, disease of the lung or respiratory tract or cancer
as provided in this subsection was in fact occasioned by an act of duty as
a policeman or fireman. If the retirement system receives evidence to the
contrary of such presumption, the burden of proof shall be on the member
or other party to present evidence that such death or disability was serv-
ice-connected. The provisions of this section relating to the presumption
that the death or disability resulting from cancer is service-connected shall
only apply if the condition that caused the death or disability is a type of
cancer which may, in general, result from exposure to heat, radiation or
a known carcinogen.

    (11) Prior to July 1, 1998, ``fireman'' or ``firemen'' means an employee
assigned to the fire department and engaged in the fighting and extin-
guishment of fires and the protection of life and property therefrom or
in support thereof and who is specifically designated, appointed, com-
missioned or styled as such by the governing body or city manager of the
participating employer and certified to the retirement system as such. On
and after July 1, 1998, ``fireman'' or ``firemen'' means an employee as-
signed to the fire department whose principal duties are engagement in
the fighting and extinguishment of fires and the protection of life and
property therefrom and who is specifically designated, appointed, com-
missioned or styled as such by the governing body or city manager of the
participating employer and certified to the retirement system as such.

    (12) Prior to July 1, 1998, ``police,'' ``policeman'' or ``policemen''
means an employee assigned to the police department and engaged in
the enforcement of law and maintenance of order within the state and its
political subdivisions, including sheriffs and sheriffs' deputies, or in sup-
port thereof and who is specifically designated, appointed, commissioned
or styled as such by the governing body or city manager of the partici-
pating employer and certified to the retirement system as such. On and
after July 1, 1998, ``police,'' ``policeman'' or ``policemen'' means an em-
ployee assigned to the police department whose principal duties are en-
gagement in the enforcement of law and maintenance of order within the
state and its political subdivisions, including sheriffs and sheriffs' deputies;
who has successfully completed the required course of instruction for law
enforcement officers approved by the Kansas law enforcement training
center and is certified pursuant to the provisions of K.S.A. 74-5607a and
amendments thereto; and who is specifically designated, appointed, com-
missioned or styled as such by the governing body or city manager of the
participating employer and certified to the retirement system as such.
Notwithstanding any other provisions of this subsection, ``police,'' ``po-
liceman'' or ``policemen'' shall include a city or county correctional officer
who is specifically designated, appointed, commissioned or styled as such
by the governing body or city manager of the participating employer and
certified to the retirement system as such commencing on July 1, 1998,
and ending on June 30, 1999.

    (13) Except as otherwise defined in this act, words and phrases used
in K.S.A. 74-4951 et seq. and amendments thereto, shall have the same
meanings ascribed to them as are defined in K.S.A. 74-4902 and amend-
ments thereto.

    Sec. 34. K.S.A. 74-4955a is hereby amended to read as follows: 74-
4955a. (1) Except as provided in subsection (4), each member of the
system who was appointed or employed prior to July 1, 1989, may elect
to be covered by the provisions of K.S.A. 74-4957a, 74-4958a, 74-4960a,
74-4963a and 74-4964a, and amendments thereto, on the first day of the
first payroll period of such member coinciding with or following the re-
ceipt of such election in the office of the retirement system, only by filing
with the board of trustees of the system prior to January 1, 1990, a written
election to be covered by such provisions. Failure to file such written
election shall be presumed to be an election not to be covered by such
provisions. Such election, whether to become a member or not to become
a member, shall be irrevocable.

    (2) Each person appointed or employed on or after July 1, 1989, shall
be covered by the provisions of K.S.A. 74-4957a, 74-4958a, 74-4960a, 74-
4963a and 74-4964a, and amendments thereto.

    (3) The provisions of this section shall be effective on and after July
1, 1989.

    (4) Each member of the system who was appointed or employed prior
to July 1, 1989, and who did not elect to be covered by the provisions
specified in subsection (1) prior to January 1, 1990, may elect to be cov-
ered by such provisions by filing a written election as provided in sub-
section (1) during the period commencing July 1, 1990, and ending Sep-
tember 30, 1990.

    (5) Except as provided in this subsection, each member of the system
who was appointed or employed prior to July 1, 1989, and who did not
elect to be covered by the provisions specified in subsection (1) as provided
in this section, may elect to be covered by such provisions by filing a
written election as provided in subsection (1). The provisions of this sub-
section shall take effect on and after the date the system receives a private
letter ruling from the internal revenue service that the provisions of this
subsection do not contravene federal law. The period of such election as
provided by this subsection shall commence on the date of receipt by the
system of such private letter ruling, and shall end 90 days thereafter. Any
member who elects as provided by this subsection shall pay the cost of
such election by means of a single lump-sum payment in an amount equal
to the then present value of the benefits being purchased as determined
by the actuary using the member's attained age, annual compensation at
the time of the purchase and the actuarial assumptions and tables then in
use by the system.

    Sec. 35. K.S.A. 1997 Supp. 74-4956, as amended by section 68 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4956.
(1) Prior service shall be credited as follows:

    (a) Each member shall receive:

    (i) Full credit for all employment, whether or not continuous, as ei-
ther a policeman or fireman prior to the entry date with such member's
employer who is such member's employer on the entry date;

    (ii) full credit for all employment, whether or not continuous, as ei-
ther a police or fireman prior to the entry date of such police or firemen's
employer, with a participating employer, if such member has at least 20
years of credited service; and

    (iii) for all continuous employment with the same employer other
than either as policeman or fireman, immediately preceding such service
as a policeman or fireman, 12 months one month of credit for each 24
two months of service. Any member or retirant who has been credited
with prior service as provided in this section may apply to the board on
such forms as the board prescribes for prior service credit with a partic-
ipating employer under the Kansas police and firemen's retirement sys-
tem other than such member's entry date employer. Each member shall
receive full credit for all employment as either a policeman or fireman
with such other participating employers and shall receive 12 months one
month of credit for each 24 two months of continuous service with other
participating employers for continuous employment preceding service as
a policeman or fireman. Upon receipt of written verification of such em-
ployment from such other participating employer, the board may grant
such additional prior service credit. With respect to a retirant, the board
shall adjust the amount of the retirement benefit accordingly commenc-
ing with the next monthly benefit payment due following receipt of writ-
ten verification. In the case of any person other than a retirant receiving
a retirement benefit, such person may make application for an adjustment
in the benefit amount in the same manner as a member or retirant, and
in such case the adjustment in the benefit amount shall be determined
by the board upon the advice of the actuary, and shall commence with
the next monthly benefit payment due following receipt of written veri-
fication, except that no additional prior service credit shall be granted for
any service with another participating employer for which benefits are
being received or will be received. A retirant or any other person receiv-
ing a retirement benefit shall not be entitled to any retroactive adjustment
in the amount of retirement benefit as a result of the board granting such
additional prior service credit.

    If a member was employed as a fireman, other than as a volunteer
fireman, by a township which is annexed by a participating employer the
member's retirement benefits and death and disability benefits shall be
computed on the basis of credited service. Continuous service as a fire-
man with a township prior to annexation by a member, who became a
member immediately following the annexation, shall be considered cred-
ited service.

    No such service shall be considered credited service for the purpose
of computing years of service if such fireman is receiving or will become
eligible to receive benefits as a result of such service with the township.

    (b) Leaves of absence and military service shall not be counted as
breaks in continuous employment; however, military service which is pre-
ceded within 30 days and followed by employment with a participating
employer shall be credited, except that after July 1, 1974, not more than
five years credit for military service shall be granted hereunder to the
extent required by the provisions of USERRA, but leaves of absence shall
not be credited.

    (2) Participating service shall be credited as follows: (a) A member
shall receive credit for participating service with a participating employer
in accordance with the rules and regulations established by the board. No
more than one calendar quarter of participating service shall be credited
for employment within any one calendar quarter.

    (b) Leaves of absence shall not be counted as a termination of em-
ployment provided the member leaves such member's accumulated con-
tributions on deposit with the system and returns to employment with
the employer granting such leave; however, the period of leave of absence
shall not be credited service.

    (c) To the extent required under the provisions of USERRA, military
service shall not count as a break in continuous employment.

    (d) Termination of employment with a participating employer fol-
lowed by employment with the same or another participating employer
within two years shall not constitute a termination of membership pro-
vided the member leaves such member's accumulated contributions on
deposit with the system; however, the period while not employed shall
not be credited.

    (3) In determining the number of years of credited service for cal-
culation of retirement benefits a fractional year of six months or more of
credited service shall be considered as one year and a fractional year of
less than six months of credited service shall be disregarded.

    Sec. 36. K.S.A. 1997 Supp. 74-4957 is hereby amended to read as
follows: 74-4957. (1) The normal retirement date for a member of the
system who is appointed or employed prior to July 1, 1989, and who does
not make an election pursuant to K.S.A. 74-4955a and amendments
thereto shall be the first day of the month coinciding with or following
termination of employment not followed by employment with any partic-
ipating employer within 30 days and the attainment of age 55 and the
completion of 20 years of credited service. Any member may retire on
such member's normal retirement date or on the first day of any month
thereafter.

    (2) Early retirement. Any member who is appointed or employed
prior to July 1, 1989, and who does not make an election pursuant to
K.S.A. 74-4955a and amendments thereto may retire before such mem-
ber's normal retirement date on the first day of any month coinciding
with or following termination of employment not followed by employment
with any participating employer within 30 days and the attainment of
age 50 and the completion of 20 years of credited service.

    (3) Notwithstanding the provisions of subsections (1) and (2) of this
section and K.S.A. 74-4955a, 74-4957a, 74-4958a, 74-4960a, 74-4963a and
74-4964a and amendments thereto, the normal retirement date for any
member who was, up to the entry date of such member's employer, cov-
ered by a pension system under the provisions of K.S.A. 13-14a01 to
13-14a14, inclusive, or 14-10a01 to 14-10a15, inclusive, and amendments
thereto, shall be the first day of the month coinciding with or following
the attainment of age 50 and the completion of 25 years of credited serv-
ice.

    (4) In no event shall a member be eligible to retire until such member
has been a contributing member of the system for 12 months of partici-
pating service, and shall have given such member's employer prior notice
of retirement.

    (5) If a retirant who retired on or after July 1, 1994, is employed,
elected or appointed in or to any position or office for which compensa-
tion for service is paid, during calendar year 1994, in an amount equal to
$11,160 or more; or during calendar year 1995 and all calendar years
thereafter, in an amount equal to $11,280 $15,000 or more in any one
such calendar year, by the same state agency or the same police or fire
department of any county, city, township or special district or the same
sheriff's office of a county 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 em-
ployer in the Kansas police and firemen's retirement system 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 in-
formation as may be needed by the executive secretary to carry out the
provisions of this act.

    Sec. 37. K.S.A. 1997 Supp. 74-4957a is hereby amended to read as
follows: 74-4957a. (1) The normal retirement date for a member of the
system who is appointed or employed on or after July 1, 1989, or who
makes an election pursuant to K.S.A. 74-4955a and amendments thereto
to be covered by the provisions of this act shall be the first day of the
month coinciding with or following termination of employment not fol-
lowed by employment with any participating employer within 30 days
and the attainment of age 55 and the completion of 20 years of credited
service, age 50 and the completion of 25 years of credited service or age
60 with the completion of 15 years of credited service. Any such member
may retire on such member's normal retirement date or on the first day
of any month thereafter.

    (2) 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 not followed by employment with any participating em-
ployer within 30 days and the attainment of age 50 and the completion
of 20 years of credited service.

    (3) In no event shall a member be eligible to retire until such member
has been a contributing member of the system for 12 months of partici-
pating service, and shall have given such member's employer prior notice
of retirement.

    (4) If a retirant who retired on or after July 1, 1996, is employed,
elected or appointed in or to any position or office for which compensa-
tion for service is paid, during calendar year 1995 and all calendar years
thereafter, in an amount equal to $11,280 $15,000 or more in any one
such calendar year, by the same state agency or the same police or fire
department of any county, city, township or special district or the same
sheriff's office of a county 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 em-
ployer in the Kansas police and firemen's retirement system shall not
make contributions nor receive additional credit under such system for
such service except as provided by this section. Upon request of the ex-
ecutive 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.

    (5) The provisions of this section shall be effective on and after July
1, 1989, and shall apply only to members who were appointed or em-
ployed prior to July 1, 1989, and who made an election pursuant to K.S.A.
74-4955a and amendments thereto; and persons appointed or employed
on or after July 1, 1989.

    Sec. 38. K.S.A. 1997 Supp. 74-4960, as amended by section 72 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4960.
(1) If any active contributing member becomes totally and permanently
disabled due to service-connected causes as defined in subsection (10) of
K.S.A. 74-4952 and amendments thereto, such member shall be retired
and the following benefits shall become payable and shall continue until
the member's death or until the member recovers from the disability if:
A report of the event in a form acceptable to the board is filed in the
office of the executive secretary of the board within 220 days after the
date of the event or act of duty causing such disability; and an application
for such benefit, in such form and manner as the board prescribes, is filed
by the member or the member's authorized representative in the office
of the executive secretary of the board within two years of the date of
disability:

    (a) On and after July 1, 1993, the member shall receive a retirement
benefit equal to 50% of the member's final average salary or, if the mem-
ber has no dependents, as defined in subsection (1)(b), the retirement
benefit the member would have been entitled to as provided under K.S.A.
74-4958 and amendments thereto had the member retired, whichever is
greater. Such benefit shall accrue from the day upon which the member
ceases to draw compensation.

    (b) Each of the member's children under the age of 18 years or each
of the member's children under the age of 23 years who is a full-time
student as provided in K.S.A. 74-49,117 and amendments thereto shall
receive an annual benefit equal to 10% of the member's final average
salary. Such benefit shall accrue from the day upon which the member
ceases to draw compensation and shall end on the last day of the month
in which each such child or children shall attain the age of 18 years or
die, whichever occurs earlier or in which such children attain the age of
23 years, if such child is a full-time student as provided in K.S.A. 74-
49,117 and amendments thereto. Commencing on the effective date of
this act, any child who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act.

    (c) In no case shall the total of the benefits payable under paragraphs
(a) and (b) of this subsection (1) be in excess of 75% of the member's
final average salary.

    (d) In the event a member who is retired under subsection (1) dies
within two years after the date of such retirement and no benefits are
payable under subsection (3) of K.S.A. 74-4958 and amendments thereto,
then benefits may be payable under subsection (1) of K.S.A. 74-4959 and
amendments thereto.

    (e) In the event a member who is retired under subsection (1) dies
more than two years after the date of such retirement, and the proximate
cause of such death is the service-connected cause from which the disa-
bility resulted and no benefits are payable under subsection (3) of K.S.A.
74-4958 and amendments thereto, then benefits may be payable under
subsection (1) of K.S.A. 74-4959 and amendments thereto. The provisions
of this paragraph (e) of this subsection (1) shall apply in all cases of such
members who die after June 30, 1978.

    (f) In the event a member who is retired under subsection (1) dies
after the date of such retirement, and no benefits are payable under
paragraphs (d) and (e) of subsection (1), nor under subsection (3) of
K.S.A. 74-4958 and amendments thereto, the following benefits shall be
payable:

    (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time of the member's retirement.

    (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's retirement benefit payable in monthly installments, to accrue
from the first day of the month following the member's date of death and
ending on the last day of the month in which the spouse dies. Com-
mencing on the effective date of this act, any surviving spouse, who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. If there is no surviving
spouse, or if after the death of the spouse there remain one or more
children under the age of 18 years or one or more children under the age
of 23 years who is a full-time student as provided in K.S.A. 74-49,117 and
amendments thereto, the annual spouse's benefit shall be payable, subject
to the provisions of section 83 and amendments thereto, in equal shares
to such children and each child's share shall end on the last day of the
month in which such child attains the age of 18 years or dies, whichever
occurs earlier or in which such child attains the age of 23 years, if such
child is a full-time student as provided in K.S.A. 74-49,117 and amend-
ments thereto. Commencing on the effective date of this act, any child
who was receiving benefits pursuant to this section and who had such
benefits terminated by reason of such child's marriage, shall be entitled
to once again receive benefits pursuant to this section subject to the lim-
itations contained in this section, except that such child shall not be en-
titled to recover any benefits not received after the termination of benefits
by reason of such child's marriage but before the effective date of this
act.

    The provisions of paragraph (f) of subsection (1) shall apply in all cases
of such members who die after December 1, 1984.

    (2) (a) If any active contributing member, prior to such member's
normal retirement, becomes totally and permanently disabled for a period
of 180 days from causes not service-connected, and not as the result of a
willfully negligent or intentional act of the member, such member shall
be retired and the following benefit shall become payable and shall con-
tinue until the member's death or until the member recovers from such
disability, whichever occurs first, if a report of the disability in a form
acceptable to the board is filed in the office of the executive secretary of
the board within 220 days after the date of the commencement of such
disability and if an application for such benefit in such form and manner
as the board shall prescribe is filed in the office of the executive secretary
of the board within two years of the date of disability:

    A retirement benefit equal to 2.5% of the member's final average salary
multiplied by the number of years of credited service or the retirement
benefit the member would have been entitled to as provided under K.S.A.
74-4958 and amendments thereto had the member retired, whichever is
greater, multiplied by the number of years of credited service except that
such retirement benefit shall be at least equal to 25% of the member's
final average salary but shall not exceed the amount of the retirement
benefit provided in paragraph (a) of subsection (1). Such benefit shall not
become payable until satisfactory evidence shall be presented to the board
that the member is and has been totally and permanently disabled for a
period of 180 days, but benefits shall accrue from the day upon which
the member ceases to draw compensation.

    (b) In the event a member who is retired under subsection (2) dies
after the date of such retirement, and no benefits are payable under
subsection (3) of K.S.A. 74-4958 and amendments thereto, the following
benefits shall be payable:

    (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time of the member's retirement.

    (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's retirement benefit payable in monthly installments, to accrue
from the first day of the month following the member's date of death and
ending on the last day of the month in which the spouse dies. Com-
mencing on the effective date of this act, any surviving spouse, who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. If there is no surviving
spouse, or if after the death of the spouse there remain one or more
children under the age of 18 years or one or more children under the age
of 23 years who are full-time students as provided in K.S.A. 74-49,117
and amendments thereto, the annual spouse's benefit shall be payable,
subject to the provisions of section 83 and amendments thereto, in equal
shares to such children and each child's share shall end on the last day of
the month in which such child attains the age of 18 years or dies, which-
ever occurs earlier or in which such child attains the age of 23 years, if
such child is a full-time student as provided in K.S.A. 74-49,117 and
amendments thereto. Commencing on the effective date of this act, any
child who was receiving benefits pursuant to this section and who had
such benefits terminated by reason of such child's marriage, shall be en-
titled to once again receive benefits pursuant to this section subject to
the limitations contained in this section, except that such child shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such child's marriage but before the effective date
of this act.

    The provisions of paragraph (b) of subsection (2) shall apply in all cases
of such members who die after July 1, 1989.

    (3) Any member who was employed for compensation by an em-
ployer other than the member's participating employer and whose disa-
bility was incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (2).

    (4) If a member becomes totally and permanently disabled and no
benefits are payable under subsection (1) or (2), the sum of the member's
accumulated contributions shall be paid to the member.

    (5) Any member receiving benefits under this section shall submit to
medical examination, not oftener more frequent than annually, by one or
more physicians or any other practitioners of the healing arts holding a
valid license issued by Kansas state board of healing arts, as the board of
trustees may direct. If upon such medical examination, the examiner's
report to the board states that the retirant is physically able and capable
of resuming employment with the same or a different participating em-
ployer from whose employment such member retired, the disability ben-
efits shall terminate. A retirant who has been receiving benefits under
the provisions of this section and who returns to employment, as defined
in subsection (4) of K.S.A. 74-4952 and amendments thereto, of a partic-
ipating employer shall immediately commence accruing service credit
which shall be added to that which has been accrued by virtue of previous
service.

    (6) Any retirant who has been receiving benefits under the provisions
of this section for a period of five years shall be deemed finally retired
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the retirant remains totally and permanently disabled, a further medical
examination or examinations may be required.

    (7) Refusal or neglect to submit to examination as provided in sub-
section (5) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the member's rights in and to all benefits
under this system may be revoked by the board.

    (8) Any retirement benefits payable under the provisions of this sec-
tion shall be in lieu of normal retirement benefits as provided in subsec-
tions (1) and (2) of K.S.A. 74-4958 and amendments thereto.

    (9) Each member shall report to such member's participating em-
ployer any event or act of duty causing disability within 200 days after
such event or act of duty. The member's participating employer shall file
in the office of the executive secretary of the board, in a form acceptable
to the board, a report of the event or act of duty causing disability within
220 days after the event or act of duty.

    (10) In any case of any event occurring prior to July 1, 1979, and after
June 30, 1998, for which a report of the event was made by the partici-
pating employer to the director of workers' compensation in accordance
with K.S.A. 44-557 and amendments thereto, such report to the director
of workers' compensation shall satisfy the requirement under subsection
(1) of this section to file a report of such event, in a form acceptable to
the board within 220 days. No such report to the director of workers'
compensation shall be deemed to satisfy such requirement with respect
to events occurring on or after July 1, 1979, and prior to July 1, 1998.

    (11) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor.

    (12) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

    (13) Any retirant who has been receiving benefits under the provi-
sions of this section and who returns to employment with the same or
different participating employer in the system shall be deemed no longer
retired.

    Sec. 39. K.S.A. 1997 Supp. 74-4960a, as amended by section 73 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4960a.
(1) If any active contributing member who is appointed or employed on
or after July 1, 1989, or who makes an election pursuant to K.S.A. 74-
4955a and amendments thereto to be covered by the provisions of this
act becomes disabled as defined in subsection (2), such member shall
receive a monthly benefit equal to 50% of the member's final average
salary at the time such member was disabled payable in monthly install-
ments, accruing from the first day upon which the member ceases to
draw compensation, if a report of the disability in such form and manner
as the board shall prescribe is filed in the office of the executive secretary
of the board within 220 days after the date of the commencement of such
disability and if an application for such benefit in such form and manner
as the board shall prescribe is filed in the office of the executive secretary
of the board within two years of the date of the commencement of such
disability.

    (2) For the purposes of this section, ``disabled'' means total inability
to perform permanently the duties of the position of policeman or fire-
man.

    (3) In the event a member who is disabled and entitled to such ben-
efits as provided in subsection (1) dies after the date of such disability,
and no benefits are payable under subsection (3) of K.S.A. 74-4958 and
amendments thereto, the following benefits shall be payable:

    (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time such member was disabled.

    (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's benefit payable in monthly installments, to accrue from the
first day of the month following the member's date of death and ending
on the last day of the month in which the spouse dies. Commencing on
the effective date of this act, any surviving spouse, who was receiving
benefits pursuant to this section and who had such benefits terminated
by reason of such spouse's remarriage, shall be entitled to once again
receive benefits pursuant to this section, except that such surviving spouse
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such surviving spouse's remarriage but
before the effective date of this act. If there is no surviving spouse, or if
after the death of the spouse there remain one or more children under
the age of 18 years or one or more children under the age of 23 years
who is a full-time student as provided in K.S.A. 74-49,117 and amend-
ments thereto, the annual spouse's benefit shall be payable, subject to
the provisions of section 83 and amendments thereto, in equal shares to
such children and each child's share shall end on the last day of the month
in which such child attains the age of 18 years or dies, whichever occurs
earlier or in which such child attains the age of 23 years, if such child is
a full-time student as provided in K.S.A. 74-49,117 and amendments
thereto. Commencing on the effective date of this act, any child who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such child's marriage, shall be entitled to once
again receive benefits pursuant to this section subject to the limitations
contained in this section, except that such child shall not be entitled to
recover any benefits not received after the termination of benefits by
reason of such child's marriage but before the effective date of this act.

    (4) Any member who was employed for compensation by an em-
ployer other than the member's participating employer and whose disa-
bility was incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (1) or (3).

    (5) If a member becomes totally and permanently disabled and no
benefits are payable under subsection (1), the sum of the member's ac-
cumulated contributions shall be paid to the member.

    (6) Any member receiving benefits under this section shall submit to
medical examination, not oftener more frequent than annually, by one or
more physicians or any other practitioners of the healing arts holding a
valid license issued by Kansas state board of healing arts, as the board of
trustees may direct. If upon such medical examination, the examiner's
report to the board states that the member is physically able and capable
of resuming employment with the same or a different participating em-
ployer from whose employment such member was employed prior to such
member's disability, the disability benefits shall terminate. A member
who has been receiving benefits under the provisions of this section and
who returns to employment, as defined in subsection (4) of K.S.A. 74-
4952 and amendments thereto, of a participating employer shall imme-
diately commence accruing service credit which shall be added to that
which has been accrued by virtue of previous service.

    (7) Any member who has been receiving benefits under the provi-
sions of this section for a period of five years shall be deemed permanent
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the member remains totally and permanently disabled, a further medical
examination or examinations may be required.

    (8) Refusal or neglect to submit to examination as provided in sub-
section (6) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the member's rights in and to all benefits
under this system may be revoked by the board.

    (9) In the event that a member becomes disabled and is eligible for
benefits provided in this section, such member shall be given participating
service credit for the entire period of such disability.

    (10) Any member who is receiving benefits pursuant to this section
shall file annually a statement of earnings for the previous year in such
form and manner as the board shall prescribe. Any disability benefit paid
to a member entitled to such benefit pursuant to this section shall be
reduced by the board in an amount equal to a $1 reduction in such benefit
for every $2 of earnings of such member which were earned during the
previous year while such member was disabled. Such reduction shall ap-
ply only to a member's earnings which exceed $10,000.

    (11) Any benefits provided pursuant to this section and any partici-
pating service credit given pursuant to subsection (9) shall terminate upon
the earliest date such member is eligible for retirement upon attainment
of the normal retirement date as provided in K.S.A. 74-4964a and amend-
ments thereto.

    (12) Any member who has received benefits under the provisions of
this section for a period of five years or more immediately preceding
retirement shall have such member's final average salary adjusted upon
retirement by the actuarial salary assumption rates in existence during
such period. Effective July 1, 1993, each member's current annual rate
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
current annual rate shall be adjusted upon retirement by an amount equal
to the lesser of: (1) 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 one percent; or (2) four
percent per annum, measured from the month the disability occurs to the
month that is two months prior to the month of retirement, for each year
of disability after July 1, 1998.

    (13) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor.

    (14) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

    (15) Any retirant who has been receiving benefits under the provi-
sions of this section and who returns to employment with the same or
different participating employer in the system shall be deemed no longer
retired.

    Sec. 40. K.S.A. 1997 Supp. 74-4963, as amended by section 75 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4963.
(1) Upon termination of employment prior to the completion of 20 years
of credited service, after 30 days after such termination a member may
withdraw such member's accumulated contributions or elect to leave such
accumulated contributions on deposit with the system. If the member
elects to leave the accumulated contributions on deposit with the system
and if the member returns to employment with the same or another
participating employer within five years, such member shall receive credit
for such member's service prior to such termination. If the member does
not elect to leave the accumulated contributions on deposit or if the mem-
ber does not return to covered employment within five years, such mem-
ber shall no longer be a member of the system and the sum of such
member's accumulated contributions then on deposit with this system
shall be paid to such member after making application in a form pre-
scribed by the board and after the system has a reasonable time to process
the application for withdrawal. Upon proper notification by the system,
member contributions not on deposit with the system shall be paid to the
member by the participating employer.

    (2) If, after termination and withdrawal of accumulated contribu-
tions, a former member returns to covered employment, except as oth-
erwise provided in subsection (1), the former member shall become a
member of the system as provided in subsection (2) of K.S.A. 74-4955
and amendments thereto. Any former member returning to covered em-
ployment may, at the former member's option, pay to the system within
31 days of the former member's return to covered employment, the total
of the former member's withdrawn accumulated contributions plus in-
terest at a rate specified by the board, in which case the member shall
receive full credit for the member's service prior to the member's ter-
mination. Subject to the provisions of section 83 and amendments
thereto, members who do not elect to repay within 31 days of return to
covered employment may elect to purchase previously forfeited service
any time prior to retirement. Such purchase shall be made by a lump-
sum payment equal to 1.75% of the member's current annual salary for
each quarter of previously forfeited participating service which the mem-
ber elects to repurchase. Upon receipt of such payment by the system
the member shall receive full credit for the number of previously forfeited
quarters of participating service which the member has elected to repur-
chase. Any member who repurchases all of the member's previously for-
feited participating service credit shall also receive all of the member's
previously forfeited prior service credit.

    (3) Upon termination and withdrawal of accumulated contributions,
any member whose employment was, up to the member's employer's
entry date, covered by a pension system established under the provisions
of K.S.A. 13-14a01 through 13-14a14, and amendments thereto, or K.S.A.
14-10a01 through 14-10a15, and amendments thereto, shall be entitled
to receive from the member's employer the sum of the member's accu-
mulated contributions to the previous pension system.

    (4) If a member has completed 20 years of credited service at date
of termination, the member shall be granted automatically a vested re-
tirement benefit in the system, but any time prior to the commencement
of retirement benefit payments and before attaining age 55 the member
may withdraw the member's accumulated contributions, whereupon the
member's membership in this system ceases and no other amounts shall
be payable for the member's prior and participating service credit. Eli-
gibility of such member, who has not withdrawn the member's accumu-
lated contributions, for retirement benefits and procedures for making
application for retirement benefits shall be in accordance with K.S.A. 74-
4957 and amendments thereto, except that in lieu of the three-month
notice of intention to retire being made to the employer, such member
shall make application for retirement in a form prescribed by the board
and retirement benefits shall accrue from the first day of the month fol-
lowing receipt of such application. The amount of the retirement benefit
shall be determined as provided in K.S.A. 74-4958 and amendments
thereto.

    (5) If a member, who has a vested retirement benefit, again becomes
an employee of a participating employer, the amount of the member's
vested retirement benefit shall remain in effect, and any retirement ben-
efit such member subsequently accrues shall be calculated separately
based on credited service after again becoming an employee and shall be
added to that which had been vested by virtue of previous service. Eli-
gibility of such member for retirement benefits and procedures for mak-
ing application for retirement benefits shall be in accordance with K.S.A.
74-4957 and amendments thereto.

    (6) Any member of this system who was previously a member of the
Kansas public employees retirement system or the retirement system for
judges and who forfeited service credit under either of those systems by
reason of termination of employment and withdrawal of their contribu-
tions to that system, may elect, subject to the provisions of section 83 and
amendments thereto, to purchase service credit for the previously for-
feited service credit by means of a single lump-sum payment and such
service shall be recredited to that system. The amount of the lump-sum
payment shall be determined by the actuary using the member's then
current annual rate of compensation and the actuarial assumptions and
tables then currently in use by that retirement system.

    (7) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

    Sec. 41. K.S.A. 1997 Supp. 74-4963a, as amended by section 76 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4963a.
(1) Upon termination of employment prior to the completion of 15 years
of credited service, after 30 days after such termination a member may
withdraw such member's accumulated contributions or elect to leave such
accumulated contributions on deposit with the system. If the member
elects to leave the accumulated contributions on deposit with the system
and if the member returns to employment with the same or another
participating employer within five years, such member shall receive credit
for such member's service prior to such termination. If the member does
not elect to leave the accumulated contributions on deposit or if the mem-
ber does not return to covered employment within five years, such mem-
ber shall no longer be a member of the system and the sum of such
member's accumulated contributions then on deposit with this system
shall be paid to such member after making application in a form pre-
scribed by the board and after the system has a reasonable time to process
the application for withdrawal. Upon proper notification by the system,
member contributions not on deposit with the system shall be paid to the
member by the participating employer.

    (2) If, after termination and withdrawal of accumulated contribu-
tions, a former member returns to covered employment, except as oth-
erwise provided in subsection (1), the former member shall become a
member of the system as provided in subsection (2) of K.S.A. 74-4955
and amendments thereto. Any former member returning to covered em-
ployment may, at the former member's option, pay to the system within
31 days of the former member's return to covered employment, the total
of the former member's withdrawn accumulated contributions plus in-
terest at a rate specified by the board, in which case the member shall
receive full credit for the member's service prior to the member's ter-
mination. Subject to the provisions of section 83 and amendments
thereto, members who do not elect to repay within 31 days of return to
covered employment may elect to purchase previously forfeited service
any time prior to retirement. Such purchase shall be made by a lump-
sum payment equal to 1.75% of the member's current annual salary for
each quarter of previously forfeited participating service which the mem-
ber elects to repurchase. Upon receipt of such payment by the system
the member shall receive full credit for the number of previously forfeited
quarters of participating service which the member has elected to repur-
chase. Any member who repurchases all of the member's previously for-
feited participating service credit shall also receive all of the member's
previously forfeited prior service credit.

    (3) Upon termination and withdrawal of accumulated contributions,
any member whose employment was, up to the member's employer's
entry date, covered by a pension system established under the provisions
of K.S.A. 13-14a01 through 13-14a14, and amendments thereto, or K.S.A.
14-10a01 through 14-10a15, and amendments thereto, shall be entitled
to receive from the member's employer the sum of the member's accu-
mulated contributions to the previous pension system.

    (4) If a member has completed 15 years of credited service at date
of termination, the member shall be granted automatically a vested re-
tirement benefit in the system, but any time prior to the commencement
of retirement benefit payments and before attaining age 55 the member
may withdraw the member's accumulated contributions, whereupon the
member's membership in this system ceases and no other amounts shall
be payable for the member's prior and participating service credit. Eli-
gibility of such member, who has not withdrawn the member's accumu-
lated contributions, for retirement benefits and procedures for making
application for retirement benefits shall be in accordance with K.S.A. 74-
4957 and amendments thereto, except that in lieu of the three-month
notice of intention to retire being made to the employer, such member
shall make application for retirement in a form prescribed by the board
and retirement benefits shall accrue from the first day of the month fol-
lowing receipt of such application. The amount of the retirement benefit
shall be determined as provided in K.S.A. 74-4958 and amendments
thereto.

    (5) If a member, who has a vested retirement benefit, again becomes
an employee of a participating employer, the amount of the member's
vested retirement benefit shall remain in effect, and any retirement ben-
efit such member subsequently accrues shall be calculated separately
based on credited service after again becoming an employee and shall be
added to that which had been vested by virtue of previous service. Eli-
gibility of such member for retirement benefits and procedures for mak-
ing application for retirement benefits shall be in accordance with K.S.A.
74-4957 and amendments thereto.

    (6) Any member of this system who was previously a member of the
Kansas public employees retirement system or the retirement system for
judges and who forfeited service credit under either of those systems by
reason of termination of employment and withdrawal of their contribu-
tions to that system, may elect, subject to the provisions of section 83 and
amendments thereto, to purchase service credit for the previously for-
feited service credit by means of a single lump-sum payment and such
service shall be recredited to that system. The amount of the lump-sum
payment shall be determined by the actuary using the member's then
current annual rate of compensation and the actuarial assumptions and
tables then currently in use by that retirement system.

    (7) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

    Sec. 42. K.S.A. 1997 Supp. 74-4966 is hereby amended to read as
follows: 74-4966. (a) In the case of any member whose employment shall
be covered by social security and who is a member of the class certified
in the case of Brazelton v. Kansas public employees retirement system,
227 K. 443, 607 P.2d 510 (1980), any benefits payable under the provi-
sions of K.S.A. 74-4958, 74-4959 and 74-4960 shall be reduced by an
amount equal to 1/2 of the original social security benefits accruing from
employment with the participating employer at the time the member
retired. For any member already retired on the effective date of this act,
no reduction of the original social security benefits shall be applicable to
benefits paid prior to the effective date of this act. The member must
make an initial application for social security benefits from employment
with the participating employer 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. Until such initial application for benefits has been approved by
the social security administration, social security benefits may be esti-
mated and may be deducted from the amount of any benefits payable as
provided in this subsection.

    (b) For any member other than a member who is a member of the
class certified in the case of Brazelton v. Kansas public employees retire-
ment system, 227 K. 443, 607 P.2d 510 (1980), no benefits shall be re-
duced because of social security benefits. Any benefits which first become
payable on or after January 1, 1976, by reason of employment with a
participating employer participating in the Kansas police and firemen's
retirement system, which employment was also covered by social security,
shall be reduced by an amount equal to the value of the difference be-
tween contributions actually made by the member and contributions
which would have been made had there been no reduction for contri-
butions to social security. The amount of reduction shall be made by the
board upon the advice of the actuary at the time benefits become payable
and shall continue until benefits are no longer payable. Should a member,
whose employment prior to January 1, 1976, with a participating employer
participating in the Kansas police and firemen's retirement system, such
employment also being covered by social security, repay in a lump-sum
prior to January 1, 1977, or on date of retirement, whichever is earlier,
an amount equal to the difference between contributions actually made
by the member and contributions which would have been made had there
been no reduction for contributions to social security, there shall be no
reduction as heretofore provided. If the payment is made after January
1, 1977, but prior to retirement, the member will pay the actual amount
plus interest which shall accrue from January 1, 1976, at a rate specified
by the board of trustees.

    Sec. 43. K.S.A. 1997 Supp. 74-4988 is hereby amended to read as
follows: 74-4988. (1) (a) Each person who is a member of a retirement
system and who becomes a member of another retirement system shall
receive credit under each such retirement system for credited service
under the other retirement system for the purpose of satisfying any re-
quirement for such person to complete certain periods of service to be-
come eligible to receive a retirement benefit or disability benefit or for
such person's beneficiaries to receive a death benefit. The retirement
benefit which a person becomes eligible to receive under a retirement
system shall be based only on credited service under such retirement
system, except that the determination of final average salary under such
retirement system shall include the compensation received as a member
of each other retirement system if such compensation is higher. Except
as provided in subsection (1)(b), such retirement benefit shall become
payable upon the member submitting an application to retire under each
system, except that a member who is not eligible to retire under the
retirement system to which such member is not currently making con-
tributions because such member does not meet the age requirements of
the earliest retirement date of such system may retire, upon meeting the
requirements for retirement, under the provisions of the retirement sys-
tem which the member had been most recently making contributions.
No further rights and benefits will accrue under the retirement system
to which the member is not currently making contributions after the date
the member retires from the system from which the member had been
most recently making contributions and the member will be retired and
benefits shall commence on the date that the member would first have
attained retirement age from the system to which the member is not
currently making contributions.

    (b) The requirement that a member shall submit an application to
retire under each system before becoming eligible to receive any retire-
ment system benefits shall not apply to any member who was active and
contributing to one retirement system and who was inactive in another
retirement system on July 1, 1995.

    (2) Any member who is not otherwise eligible for service credit as
provided for in subsection (1)(a) of K.S.A. 74-4913 or subsection (1)(a)
of K.S.A. 74-4936 and amendments thereto, may be granted credit for
the service upon the attainment of 38 quarters of participating service in
any retirement system as defined in subsection (3)(b) or upon retirement.

    (3) As used in this section:

    (a) ``Member'' means a person who has attained membership in a
retirement system, who has not retired under such retirement system and
who has not withdrawn such person's accumulated contributions for such
retirement system; and

    (b) ``retirement system'' means the Kansas public employees retire-
ment system, the Kansas police and firemen's retirement system and the
retirement system for judges.

    Sec. 44. K.S.A. 1997 Supp. 74-4990 is hereby amended to read as
follows: 74-4990. (1) An arrearage obligation shall arise when it is ascer-
tained that required contributions have not been made to the Kansas
public employees retirement system at the required time. Such arrearage
obligation shall be met by the employer by preparing a report on the
appropriate form to correct all previous quarterly reports affected by the
arrearage obligation. Such report shall be submitted by the employer with
the first quarterly report after such an arrearage obligation is discovered
or as the board of trustees of the system may otherwise prescribe. The
proper remittance to cover employer and employee contributions in ar-
rearage shall accompany such report or as the board of trustees of the
system may otherwise prescribe for all arrearages other than for the year
of service as provided in K.S.A. 74-4911 and amendments thereto. In
addition, the employer will pay to the system, interest at the current ac-
tuarial interest rate assumption adopted by the board. If the employee
retires within 24 months of the employer first reporting this arrearage,
the employer will pay to the system a lump-sum amount equal to the
difference of the actuarial present value of the retirement benefit and the
accumulated value of any contributions represented by the arrearage. No
employee shall pay all or any part of the arrearage. The amounts due for
an arrearage obligation shall be based upon the compensation paid to the
member and at the rates in effect at the time the contributions were
originally due to be paid to the system. The employer shall not be required
to pay the employee contributions or interest on arrearages of six month
or less.

    (2) An arrearage obligation shall arise when it is ascertained that the
employee and employer should have made contributions to the Kansas
public employees retirement system for all or part of the year of service
as provided in K.S.A. 74-4911 and amendments thereto. Such arrearage
obligation shall be met by the employer by preparing a report on the
appropriate form to correct all previous reports affected by the arrearage
obligation. Such report shall be submitted by the employer with the first
report after such an arrearage obligation is discovered or as the board of
trustees of the system may otherwise prescribe. The proper remittance to
cover employer contributions in arrearage shall accompany such report
or as the board of trustees of the system may otherwise prescribe. The
amounts due for an arrearage obligation shall be based upon compensa-
tion paid to the member and at the rates in effect at the time contributions
were originally due to be paid to the system.

    (2)(3) In the event the proper remittance to cover employee contri-
butions in arrearage does not accompany such report, service credits for
that period of employment involving the arrearage obligation may be pur-
chased by the member as participating service at any time prior to re-
tirement by making application therefor and paying to the system a single
lump-sum amount determined by the system's actuary using (a) the mem-
ber's then current annual rate of compensation, or if not actively em-
ployed, the member's annual rate of compensation when last participating
and (b) the actuarial assumptions and tables currently in use by the sys-
tem.

    (3)(4) Except as otherwise provided in this section, any member may
purchase participating service credits for that period of employment in-
volving the arrearage obligation as described in this section, if first com-
menced prior to January 1, 1996, by electing to effect such purchase by
means of having employee contributions as provided in K.S.A. 74-4919
and amendments thereto deducted from such member's compensation
at a percentage rate equal to two times or three times the employee's rate
of contribution as provided in K.S.A. 74-4919 and amendments thereto
for such periods of service, in lieu of a lump-sum amount as provided in
this section. Such deductions shall commence at the beginning of the
quarter following such election and shall remain in effect until all quarters
of such service have been purchased. Any person may make any such
purchase as described in this section, if first commenced in calendar year
1996 or thereafter, at an additional rate of contribution, in addition to the
employee's rate of contribution as provided in K.S.A. 74-4919 and amend-
ments thereto, based upon the member's attained age at the time of
purchase and using actuarial assumptions and tables in use by the retire-
ment system at such time of purchase, for such periods of service, in lieu
of a lump-sum amount as provided in this section. Such additional rate
of contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all quarters of such service
have been purchased.

    (4)(5) Notwithstanding the provisions of this section, no employee
contributions shall be due and owing for stipulated compensation
amounts paid to any employee or former employee of a city of the first
class whose dispute with such city was settled by stipulation of settlement
either in Case No. 90-2328-0 in the United States District Court for the
District of Kansas or in Case No. 91-1182 in the Supreme Court of the
United States. Any such employee or former employee may elect to remit
such employee contributions to the system. No employee or former em-
ployee whose contributions are deemed not to be due or owing or who
did not elect to remit such employee contributions to the system as pro-
vided in this section according to this provision shall have any claim
against the Kansas public employees retirement system for any retire-
ment, disability, death or survivors benefit or any return of accumulated
contributions based on such contributions or on the compensation
amounts that would have been reflected by such contributions.

    Sec. 45. K.S.A. 1997 Supp. 74-4992, as amended by section 87 of
1998 Senate Bill No. 382, is hereby amended to read as follows: 74-4992.
(a) Any such member of the legislature or former member of the legis-
lature as described in K.S.A. 74-4991 and amendments thereto shall be-
come a member on entry date or upon filing with the board an irrevocable
election to become or not to become a member of the system. In the
event that any such member of the legislature or former member of the
legislature fails to file the election to become a member of the retirement
system, it shall be presumed that such member of the legislature or for-
mer member of the legislature has elected not to become a member. The
election to participate shall become effective immediately upon making
such election, if such election is made within 14 days of taking the oath
of office or, otherwise, on the first day of the first payroll period of the
first quarter following receipt of the election in the office of the retire-
ment system.

    (b) Any member of the legislature who had attained membership in
the Kansas public employees retirement system prior to taking the oath
of office as a member of the legislature may elect not to participate in
the Kansas public employees retirement system for the purpose of service
as a member of the legislature. This election, which is irrevocable, must
be filed within the offices of the system. Any member of the legislature
who is a member of the retirement system on the effective date of this
act and was a member of the retirement system at the time of taking the
oath of office may elect not to participate in the retirement system for
service as a member of the legislature if such irrevocable election is filed
within the offices of the system.

    (c) Subject to the provisions of section 83, and amendments thereto,
any member of the legislature who elected not to participate in the re-
tirement system, and who is not a contributing member with any other
participating employer, may purchase such participating service by mak-
ing a single lump-sum payment in an amount determined by the actuary
using the then current rate of compensation and the actuarial assumptions
and tables currently in use by the system.

    (d) Subject to the provisions of section 83, and amendments thereto,
except as otherwise provided in this section, any member of the retire-
ment system may purchase participating service credit for employment
service as described in this section, if first commenced prior to January
1, 1996, by electing to effect such purchase by means of having employee
contributions as provided in K.S.A. 74-4919 and amendments thereto
deducted from such member's compensation at a percentage rate equal
to two times or three times the employee's rate of contribution as pro-
vided in K.S.A. 74-4919 and amendments thereto for such periods of
service in lieu of a lump-sum amount as provided in this section. Such
deductions shall commence at the beginning of the quarter following such
election and shall remain in effect until all quarters of such service have
been purchased. Any person may make any such purchase as described
in this section, if first commenced in calendar year 1996 or thereafter, at
an additional rate of contribution, in addition to the employee's rate of
contribution as provided in K.S.A. 74-4919 and amendments thereto,
based upon the member's attained age at the time of purchase and using
actuarial assumptions and tables in use by the retirement system at such
time of purchase, for such periods of service, in lieu of a lump-sum
amount as provided in this section. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased.

    New Sec. 46. The retirement system for judges is a division of the
Kansas public employees retirement system created by K.S.A. 74-4903
and amendments thereto and is subject to the provisions of K.S.A. 74-
4901 et seq. and amendments thereto.

    New Sec. 47. (1) Any member of the retirement system for judges
may purchase participating credit for periods of active service in the
armed forces of the United States or in the commissioned corps of the
United States public health service and for periods of service required to
fulfill the requirements of section 651 of title 10, United States code,
which does not exceed six years. Such judge shall be entitled to purchase
one quarter of participating service credit for each year of service required
to fulfill the requirements of section 651 of title 10, United States code.
Such purchase shall be effected by the judge submitting proof of such
service acceptable to the board and electing in writing to have employee
contributions as provided in K.S.A. 20-2603 and amendments thereto
deducted from such judge's compensation at an additional rate of con-
tribution, in addition to the employee's rate of contribution as provided
in K.S.A. 20-2603 and amendments thereto, based upon the judge's at-
tained age at the time of purchase and using actuarial assumptions and
tables in use by the retirement system at such time of purchase for such
periods of service. Such additional rate of contribution shall commence
at the beginning of the quarter following such election and shall remain
in effect until all of the full quarters of such service have been purchased.

    (2) Any member of the retirement system who has not retired may
purchase participating service credit for military service as described in
this section by electing to effect such purchase by means of a single lump-
sum payment in lieu of employee contributions as provided in this section.
The lump-sum payment shall be an amount determined by the actuary
using the judge's then current annual rate of compensation, the actuarial
assumptions and tables currently in use by the retirement system and the
judge's attained age. No participating employer shall pay all or any part
of the cost of any additional participating service credit to be purchased
by means of a lump-sum payment by a judge under this section.

    New Sec. 48. The retirement benefit, pension or annuity payments
accruing after June 30, 1998, to each retirant of the state school retire-
ment system who retired prior to January 1, 1971, and who had at least
25 years or more of service credit, shall be increased by an amount equal
to $100.

    New Sec. 49. The provisions of K.S.A. 74-4999 et seq. and amend-
ments thereto shall apply to any member of the Kansas public employees
retirement system who was a court reporter for a magistrate court prior
to July 1, 1975, and who is a full-time court reporter on the effective date
of this act.

    New Sec. 50. (a) The retirement benefit, pension or annuity pay-
ments accruing after June 30, 1998, to each retirant and each local school
annuitant shall be increased by an amount equal to 3.0% of the retirement
benefit, pension or annuity payment in effect on July 1, 1998, from the
retirant's retirement system and shall be paid by such retirement system
to the retirant and the local school annuitant during such period.

    (b) As used in this section:

    (1) ``Retirant'' means (A) any person who is a member of a retirement
system and who retired prior to July 1, 1997, (B) any person who is a
special member of a retirement system and who retired prior to July 1,
1997, (C) any person who is a joint annuitant or beneficiary of any mem-
ber described in clause (A) or any special member described in clause
(B) and (D) any long-term disability benefit recipient.

    (2) ``Retirement system'' means the Kansas public employees retire-
ment system, the Kansas police and firemen's retirement system, the state
school retirement system and the retirement system for judges.

    (3) ``Local school annuitant'' means (A) any person who is an annui-
tant with 10 or more years of service, who is receiving an annuity, whose
annuity is not included, in whole or in part, in payments made to such
school district under K.S.A. 72-5512b and amendments thereto, and who
is not a member of a group I or of group II as defined in K.S.A. 72-5518
and amendments thereto, and (B) any person who is receiving an annuity
and who retired prior to September 1, 1981.

    (4) ``Long-term disability recipient'' means any person receiving a
long-term disability benefit under K.S.A. 74-4927 and amendments
thereto prior to July 1, 1997.

    New Sec. 51.

KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM     (a) There is appropriated for the above agency from the state general
fund for the fiscal year ending June 30, 1999, the following:

Actuarial funding--3% postretirement benefit increase

$20,000,000

Provided, That all expenditures from the actuarial funding--3% postretirement benefit in-
crease account shall be to finance the amount required to fund the actuarial liability of the
state obligation for the one-time postretirement benefit increase for persons who retired
prior to July 1, 1997, and for whom the state paid employer contributions (1) under the
Kansas public employees retirement system for those persons who were eligible for assis-
tance from the state board of regents in the purchase of annuities as provided in K.S.A. 74-
4925, and amendments thereto, (2) under the Kansas public employees retirement system
for those persons who were employed by eligible employers described by K.S.A. 74-4931,
and amendments thereto, and for whom employer contributions were paid as provided by
K.S.A. 74-4939, and amendments thereto, (3) under the Kansas police and firemen's re-
tirement system as provided by K.S.A. 74-4951 et seq., and amendments thereto, or (4)
under the retirement system for judges as provided by K.S.A. 20-2601 et seq., and amend-
ments thereto.

    New Sec. 52. (1) Notwithstanding the provisions of subsection (9)
of K.S.A. 74-4902 and amendments thereto, any payment for accumu-
lated sick leave, vacation or annual leave, severance pay or any other
payments to the member which, when upon retirement, increases the
member's final average salary by more than 15%, shall require the par-
ticipating employer to pay the system a lump-sum amount equal to the
system's actuarial liability for benefits attributable to and payable on ac-
count of such excess over the 15%.

    (2) As used in this section, ``system'' means the Kansas public em-
ployees retirement system, the Kansas police and firemen's retirement
system and the retirement system for judges.

    New Sec. 53. (1) Any payment made to a named beneficiary as pro-
vided in this section, shall be a full discharge and release to the system
from any further claims. Any payment made to a beneficiary as provided
in clauses (A), (B), (C), (D), (E) or (F) of subsection (7) of K.S.A. 74-
4902 or in clauses (1), (2), (3), (4), (5) or (6) of subsection (k) of K.S.A.
20-2601, and amendments thereto, as determined by the board, shall be
a full discharge and release to the system from any further claims. When-
ever any payment is payable to more than one beneficiary such payment
shall be made to such beneficiaries jointly.

    (2) Any benefits payable to a beneficiary or beneficiaries who are
incompetent shall be made in the name of the beneficiary or beneficiaries
and delivered to the lawfully appointed conservator of such beneficiaries
who was nominated by will or as otherwise provided by law, except that
in those cases where the benefit involves an amount not to exceed $500,
the board is hereby authorized in its discretion without the appointment
of a conservator or in the giving of a bond to pay such amount as is due
to the incompetent person or persons themselves.

    (3) Any lump-sum benefits payable to a beneficiary or beneficiaries
who are minor children and which amount totals $10,000 or more shall
be made in the name of the beneficiary or beneficiaries and delivered to
the lawfully appointed conservator of such beneficiaries who was nomi-
nated by will or as otherwise provided by law except that in those cases
where the benefit involves an amount not to exceed $500, the board is
hereby authorized in its discretion without the appointment of a conser-
vator or the giving of a bond to pay such amount as is due to the minor
or minors themselves. If no conservator is lawfully appointed, the system
will credit interest at 4% on all benefits due and payable and shall pay all
benefits plus interest to the beneficiary or beneficiaries who are minor
children when they attain age 18 years. Any benefits payable to a bene-
ficiary or beneficiaries who are minor children and which amount which
totals more than $500 but less than $10,000, may be made in the name
of the beneficiary or beneficiaries and paid under the uniform transfers
to minors act as provided in K.S.A. 38-1701 et seq. and amendments
thereto.

    (4) Any monthly benefits payable to a beneficiary or beneficiaries who
are minor children shall be made in the name of the beneficiary or ben-
eficiaries and delivered to the lawfully appointed conservator of such ben-
eficiaries who was nominated by will or as otherwise provided by law. If
no conservator is lawfully appointed, the system will credit interest at 4%
on all benefits due and payable and shall pay all benefits plus interest to
the beneficiary or beneficiaries who are minor children when they attain
age 18 years.

    (5) As used in this section, ``system'' means the Kansas public em-
ployees retirement system, the Kansas police and firemen's retirement
system and the retirement system for judges.

    New Sec. 54. Any employee of a participating employer who is a
member of the Kansas public employees retirement system, who was
previously employed in Kansas in nonfederal governmental employment
with an employer who has not affiliated with the system under K.S.A. 74-
4910 and amendments thereto, and which service otherwise meets the
requirements of an employee as prescribed in subsection (14) of K.S.A.
74-4902 or subsection (4) of K.S.A. 74-4932 and amendments thereto,
may elect to purchase service credit for such in-state nonfederal govern-
mental employment. At the election of the member, the benefit for each
such year of employment shall be either 1% or 1.75% of the final average
salary of any such member. For any member who elects to purchase
service credit as provided in this section at the 1% rate, such member
may elect to purchase such service credit at an additional amount of .75%
of final average salary of such member in a lump-sum amount as other-
wise provided in this subsection. Such member may purchase such service
credit by making application therefor prior to the date of retirement at
an additional rate of contribution in addition to the employee's rate of
contribution as provided in K.S.A. 74-4919 and amendments thereto,
based upon the member's attained age at the time of purchase and using
actuarial assumptions and tables in use by the retirement system at the
time of such purchase. Such additional rate of contribution shall com-
mence at the beginning of the quarter following such election and shall
remain in effect until all quarters of such service have been purchased.
Any such member may purchase such service credit as described in this
section by electing to effect such purchase by means of a single lump-
sum payment in lieu of employee contributions as provided in this section
in an amount equal to the then present value of the benefits being pur-
chased as determined by the actuary using the member's attained age,
annual compensation at the time of purchase and the actuarial assump-
tions and tables then in use by this system. The lump-sum payment shall
be made immediately upon being notified of the amount due. No pur-
chase of service or any part thereof will be nullified by the subsequent
affiliation of an employer with the system.

    Sec. 55. K.S.A. 20-2601a, 20-2606, as amended by section 17 of 1998
Senate Bill No. 382, 20-2609, 20-2610, 20-2620, as amended by section
20 of 1998 Senate Bill No. 382, 72-5501, as amended by section 22 of
1998 Senate Bill No. 382, 74-4919i, as amended by section 45 of 1998
Senate Bill No. 382, 74-4924 and 74-4955a and K.S.A. 1998 Supp. 20-
2601, as amended by section 15 of 1998 Senate Bill No. 382, 46-2201,
74-4902, as amended by section 26 of 1998 Senate Bill No. 382, 74-4904,
74-4905, 74-4907, 74-4908, 74-4910, 74-4911, as amended by section 28
of 1998 Senate Bill No. 382, 74-4913, as amended by section 33 of 1998
Senate Bill No. 382, 74-4914, 74-4914e, 74-4917, 74-4919a, as amended
by section 38 of 1998 Senate Bill No. 382, 74-4919h, as amended by
section 44 of 1998 Senate Bill No. 382, 74-4919n, as amended by section
49 of 1998 Senate Bill No. 382, 74-4919p, 74-4919q, 74-4920, 74-4921,
74-4927, as amended by section 53 of 1998 Senate Bill No. 382, 74-4936a,
as amended by section 63 of 1998 Senate Bill No. 382, 74-4937, 74-4939,
74-4952, as amended by section 65 of 1998 Senate Bill No. 382, 74-4956,
as amended by section 68 of 1998 Senate Bill No. 382, 74-4957, 74-4957a,
74-4960, as amended by section 72 of 1998 Senate Bill No. 382, 74-4960a,
as amended by section 73 of 1998 Senate Bill No. 382, 74-4963, as
amended by section 75 of 1998 Senate Bill No. 382, 74-4963a, as
amended by section 76 of 1998 Senate Bill No. 382, 74-4966, 74-4988,
74-4990 and 74-4992, as amended by section 87 of 1998 Senate Bill No.
382, are hereby repealed.

    Sec. 56. This act shall take effect and be in force from and after its
publication in the statute book.

I hereby certifiy that the above Bill originated in the
Senate, and passed that body

__________________________________

Senate adopted
Conference Committe Report __________________________________

__________________________________

President of the Senate.

__________________________________

Secretary of the Senate.

Passed the House
as amended __________________________

House adopted
Conference Committee Report __________________________

__________________________________

Speaker of the House.

__________________________________

Chief Clerk of the House.

Approved __________________________

__________________________________

Governor.