SENATE BILL No. 373

      An Act establishing the university of Kansas hospital authority; relating to its powers, duties
      and limitations; matters regarding employees thereof, including retirement annuities and
      benefits; creating a board of directors; creating a legislative oversight committee; amend-
      ing K.S.A. 75-6117, 76-745, 79-201b and 79-3606 and repealing the existing sections.

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

    New Section 1. Sections 1 through 15 and 18 through 25, and
amendments thereto, shall be known and may be cited as the university
of Kansas hospital authority act.

    New Sec. 2. (a) The legislature of the state of Kansas hereby finds
and declares that:

    (1) Provision of health care is an essential governmental function pro-
tecting and promoting the health and welfare of the citizens of the state
of Kansas;

    (2) education of medical and health sciences professionals and the
performance of medical and related research are essential to promote
such health care;

    (3) teaching hospitals are essential components of a system designed
to deliver primary and specialty patient services and to promote medical
and health sciences education and research;

    (4) the mission of the university of Kansas hospital is to facilitate and
support the education, research and public service activities of the uni-
versity of Kansas medical center and its health sciences schools, to provide
patient care and specialized services not widely available elsewhere in the
state and to continue the historic tradition of care by the university of
Kansas hospital to medically indigent citizens of Kansas;

    (5) to provide for the education and training of health care profes-
sionals, to provide a clinical setting for biomedical research, and to ensure
the availability of quality patient care including specialized medical serv-
ices not otherwise widely available, it is necessary that the university of
Kansas hospital be a facility of the finest possible quality;

    (6) such quality hospital, health care and related facilities require spe-
cialized management and operation to remain economically viable to earn
revenues necessary for its operation and to engage in arrangements with
public and private entities and other activities, taking into account
changes that have occurred or may occur in the future in the provision
of health care and related services; and

    (7) the needs of the citizens of the state of Kansas and of the univer-
sity of Kansas medical center and its health sciences schools will be best
served if the university of Kansas hospital is transferred to and operated
by an independent public authority charged with the mission of operating
a teaching hospital for the benefit of the university of Kansas medical
center, providing high quality patient care and providing a site for medical
and biomedical research.

    (b) The exercise of the powers permitted by this act are deemed an
essential governmental function in matters of public necessity for the
entire state in the provision of health care, medical and health sciences
education and research.

    New Sec. 3. As used in sections 1 through 15 and 18 through 25, and
amendments thereto, the following words and phrases have the following
meanings unless a different meaning clearly appears from the content:

    (a) ``Authority'' means the university of Kansas hospital authority cre-
ated by this act.

    (b) ``Board'' means the board of directors of the authority created by
this act.

    (c) ``Health sciences schools'' means the schools of medicine, nursing,
allied health, pharmacy and any other schools operated by the university
of Kansas at the university of Kansas medical center.

    (d) ``Bonds'' means any bonds, notes, lease certificates of participa-
tion or other evidences of indebtedness, whether or not the interest on
which is subject to federal income taxation, issued by the authority pur-
suant to this act.

    (e) ``Hospital assets'' means all records, property or rights in property,
real and personal, tangible and intangible existing on the transfer date
specified by this act, used by or accruing to university of Kansas or the
university of Kansas medical center for the benefit of the university of
Kansas hospital in the normal course of its operations as a teaching, re-
search and medical treatment facility.

    (f) ``Hospital obligations'' means all debts or other obligations, con-
tingent or certain, owing on the transfer date under this act to any person
or other entity, arising out of the operation of the university of Kansas
hospital as a medical treatment facility, and including, without limitation,
all bonds and other debts for the purchase of goods and services, whether
or not delivered, and obligations for the delivery of services, whether or
not performed.

    (g) ``Regents'' means the board of regents of the state of Kansas.

    (h) ``State employee'' means a person employed by the state of Kansas
whether or not a classified or unclassified employee in the state personnel
system.

    (i) ``Transfer date'' means a date or dates agreed to by the regents
and the authority which shall be on or after March 1, 1998, but not later
than December 31, 1998, for the transfer of hospital assets to and the
assumption of hospital obligations by such authority.

    (j) ``University of Kansas hospital'' means the hospital and hospital
clinics operated by the university of Kansas, separately or jointly with
another health care provider.

    (k) ``State'' means the state of Kansas.

    (l) ``Initial board'' means the board of directors initially appointed by
the governor under this act.

    (m) ``Medical center employee'' means an employee of the university
of Kansas medical center whose salary is not paid in whole or in part from
the hospital revenue fund.

    (n) ``Hospital employee'' means an employee of the university of Kan-
sas medical center who performs services for the university of Kansas
hospital as part of one or more departments or other administrative units
of the hospital and whose salary is paid in whole or in part from the
hospital revenue fund.

    (o) ``President'' means the chief executive officer of the authority.

    (p) ``This act'' means the university of Kansas hospital authority act.

    New Sec. 4. (a) There is hereby established a body politic and cor-
porate, with corporate succession, to be known as the university of Kansas
hospital authority. The authority is hereby established as an independent
instrumentality of this state. Its exercise of the rights, powers and privi-
leges conferred by this act shall be deemed and held to be the perform-
ance of an essential governmental function.

    (b) The authority shall be governed by a fourteen-member board of
directors. Eight of the members shall be representatives of the general
public who are recognized for outstanding knowledge and leadership in
the fields of finance, business, health-care management, health care pro-
viders, legal affairs, education or government. Of the eight members rep-
resenting the general public, there shall be at least one member from
each congressional district. Three members shall be ex officio voting
members consisting of the chancellor of the university of Kansas, the
executive vice chancellor of the university of Kansas medical center and,
the executive dean of the university of Kansas school of medicine. Three
members shall be nonvoting ex officio members consisting of, the chief
of staff of the university of Kansas hospital medical staff, the president of
the authority and the dean of the university of Kansas school of nursing.

    (c) The eight members representing the general public appointed to
the initial board shall be appointed by the governor subject to senate
confirmation as provided in K.S.A. 75-4315b and amendments thereto.
Any member whose nomination is subject to confirmation during a reg-
ular session of the legislature shall be deemed terminated when the senate
rejects the nomination. No such termination shall affect the validity of
any action taken by such member prior to such termination. Of the eight
members appointed to the initial board, two shall be members of the
Kansas board of regents and two members shall be members of the Kan-
sas legislature. The two legislative appointees shall be appointed by the
governor from a panel of four nominees composed of (1) one member of
the legislature nominated by the speaker of the house of representatives,
(2) one member of the legislature nominated by the minority leader of
the house of representatives, (3) one member of the legislature nomi-
nated by the president of the senate, and (4) one member of the legis-
lature nominated by the minority leader of the senate.

    (d) Of the members appointed to the initial board by the governor,
two members shall be appointed for a term of one year, three members
shall be appointed for a term of two years and three members shall be
appointed for a term of three years.

    (e) After the initial board of directors is appointed, members other
than ex officio shall be appointed for a term of three years each, except
in the event of a vacancy the appointment shall be for the remainder of
the unexpired portion of the term. Each member shall hold office for the
term of appointment and until the successor has been nominated and
approved. Any member is eligible for reappointment, but members shall
not be eligible to serve more than two consecutive three-year terms.

    (f) Except for appointment of the initial board, when a vacancy occurs
or is announced regarding a member or members representing the gen-
eral public, a nominating committee of the board shall forward a slate of
candidates to the governor for consideration. Appointment to the board
shall be made by the governor subject to senate confirmation as provided
in K.S.A. 75-4315b and amendments thereto.

    (g) The terms of members serving by virtue of their office shall expire
immediately upon termination of their holding such office.

    (h) The board shall annually elect one of their number as chairperson
and another as vice-chairperson. The board shall also elect a secretary
and treasurer for terms determined by the board. The same person may
serve as both secretary and treasurer. The board shall establish an exec-
utive committee, nominating committee and other standing or special
committees and prescribe their duties and powers, and any executive
committee may exercise all such powers and duties of the board as the
board may delegate.

    (i) Members of the board of directors of the authority shall serve
without compensation. Members of the board attending meetings of the
board, or attending a subcommittee meeting thereof authorized by the
board, shall be paid subsistence allowances, mileage and other expenses
as provided in K.S.A. 75-3223 and amendments thereto.

    (j) No part of the funds of the authority shall inure to the benefit of,
or be distributed to, its employees, officers or members of the board,
except that the authority may make reasonable payments for expenses
incurred on its behalf relating to any of its lawful purposes and the au-
thority shall be authorized and empowered to pay reasonable compen-
sation for services rendered to or for its benefit relating to any of its lawful
purposes including to pay its employees reasonable compensation.

    (k) Any member of the board of directors other than an ex officio
member may be removed by an affirmative vote of seven of the members
of the board for malfeasance or misfeasance in office, failure to regularly
attend meetings, or for any cause which renders said member incapable
of or unfit to discharge the duties of director.

    (l) The board shall meet at least six times per year and at such other
times as it deems appropriate, or upon call by the president or the chair-
person, or upon written request of a majority of the directors. The board
may adopt, repeal and amend such rules, procedures and bylaws, not
contrary to law or inconsistent with this act, as it deems expedient for its
own governance and for the governance and management of the author-
ity. A majority of the total voting membership of the board shall constitute
a quorum for meetings, and the board may act by a majority of those at
any meeting where a quorum is present, except upon such issues as the
board may determine shall require a vote of seven members for approval.
The initial board shall meet for the initial meeting upon call by the chan-
cellor of the university of Kansas who shall act as temporary chairperson
until officers of the board are elected pursuant to subsection (h).

    (m) The board shall appoint a president who shall serve at the plea-
sure of the board. The president shall serve as the chief executive officer
of the authority. The president's salary shall be set by the board. The
board may negotiate and enter into an employment agreement with the
individual selected as president of the authority which may provide for
compensation allowances, benefits and expenses as may be included in
such agreement. The president shall direct and supervise administrative
affairs and the general management of the authority. The president shall
be a nonvoting ex officio member of the board.

    (n) The board may provide to the president of the authority and other
employees designated by the board supplemental benefits in addition to
the benefits provided in section 25, and amendments thereto.

    (o) The authority shall continue until terminated by law, except that
no such law shall take effect so long as the authority has bonds outstand-
ing, unless adequate provision has been made for the payment or retire-
ment of such debts or obligations. Upon any such dissolution of the au-
thority, all property, funds and assets thereof shall be vested in the state,
university of Kansas medical center or other hospital entity as designated
by the board and approved by act of the Kansas legislature.

    New Sec. 5. (a) All resolutions and orders of the board shall be re-
corded and authenticated by the signature of the secretary or any assistant
secretary of the board. The book of resolutions, orders, minutes of open
meetings, annual reports and annual financial statements of the authority
shall be public records as defined by K.S.A. 45-215 et seq. and amend-
ments thereto. All public records shall be subject to regular audit as pro-
vided in K.S.A. 46-1106 and amendments thereto.

    (b) Notwithstanding any provision of K.S.A. 45-215 et seq. and
amendments thereto the contrary, the following records of the authority
shall not be subject to the provisions of the Kansas open records act when
in the opinion of the board the disclosure of the information in the records
would be harmful to the competitive position of the authority:

    (1) Proprietary information gathered by or in the possession of the
authority from third parties pursuant to a promise of confidentiality;

    (2) contract cost estimates prepared for confidential use in awarding
contracts for construction or the purchase of goods or services;

    (3) data, records or information of a proprietary nature produced or
collected by or for the authority or members of its medical or teaching
staff; financial statements not publicly available that may be filed with the
authority from third parties; the identity, accounts or account status of
any customer of the authority; consulting or other reports paid for by the
authority to assist the authority in connection with its strategic planning
and goals; and the determination of marketing and operational strategies
where disclosure of such strategies would be harmful to the competitive
position of the authority; and

    (c) Notwithstanding any provision of this section to the contrary, the
authority may claim the benefit of any other exemption to the Kansas
open records act listed in K.S.A. 45-215 et seq. and amendments thereto.

    New Sec. 6. (a) No business of the board shall be transacted except
at a regular or special meeting at which a quorum consisting of at least a
majority of the total voting membership of the board is present. Any
action of the board shall require the affirmative vote of a majority of those
at any meeting at which a quorum is present.

    (b) Notwithstanding any provision of K.S.A. 75-4317 et seq. and
amendments thereto in the case of the authority, discussion, considera-
tion and action on any of the following may occur in executive session
when in the opinion of the board disclosure of the items would be harmful
to the competitive position of the authority:

    (1) Plans that could affect the value of property, real or personal,
owned or desirable for ownership by the authority;

    (2) the condition, acquisition, use or disposition of real or personal
property;

    (3) contracts for provision of health care services and marketing or
operational strategies; and

    (4) peer review and risk management activities as defined in K.S.A.
65-4914 et seq. and K.S.A. 65-4921 et seq. and amendments thereto.

    (c) Notwithstanding any provision of this section to the contrary, the
authority may claim the benefit of any other exemption to the Kansas
open meetings act listed in K.S.A. 75-4317 et seq. and amendments
thereto.

    New Sec. 7. (a) Any member of the board and any employee, other
agent or advisor of the authority, who has a direct or indirect interest in
any contract or transaction with the authority, shall disclose this interest
to the authority in writing. This interest shall be set forth in the minutes
of the authority, and no director, employee or other agent or advisor
having such interest shall participate on behalf of the authority in the
authorization of any such contract or transaction; except that, the provi-
sions of this section shall not be construed to prohibit any employee of
the university of Kansas or the university of Kansas medical center who
is a member of the board, who has no personal interest, from voting on
the authorization of any such contract or transaction between the au-
thority and the university or the medical center.

    (b) All members of the board shall file a written statement pursuant
to K.S.A. 46-247 et seq. and amendments thereto regarding any substan-
tial interests within the meaning of K.S.A. 46-229 and amendments
thereto that each director may hold. Any employee, other agent or advisor
of the authority who has a substantial interest in any contract or trans-
action with the authority within the meaning of K.S.A. 46-229 and amend-
ments thereto shall file a written statement of substantial interest pur-
suant to K.S.A. 46-247 et seq. and amendments thereto.

    New Sec. 8. (a) The authority shall have all the powers necessary to
carry out the purposes and provisions of this act, including, without lim-
itation, the following powers to:

    (1) Have the duties, privileges, immunities, rights, liabilities and dis-
abilities of a body corporate and a political instrumentality of the state;

    (2) have perpetual existence and succession;

    (3) adopt, have and use a seal and to alter the same at its pleasure;

    (4) sue and be sued in its own name;

    (5) make and execute contracts, guarantees or any other instruments
and agreements necessary or convenient for the exercise of its powers
and functions including, without limitation, to make and execute contracts
with hospitals or other health care businesses to operate and manage any
or all of the hospital facilities or operations and to incur liabilities and
secure the obligations of any entity or individual;

    (6) borrow money and to issue bonds evidencing the same and pledge
all or any part of the authority's assets therefor;

    (7) purchase, lease, trade, exchange or otherwise acquire, maintain,
hold, improve, mortgage, sell, lease and dispose of personal property,
whether tangible or intangible, and any interest therein; and to purchase,
lease, trade, exchange or otherwise acquire real property or any interest
therein, and to maintain, hold, improve, mortgage, lease and otherwise
transfer such real property, so long as such transactions do not conflict
with the mission of the authority as specified in this act;

    (8) incur or assume indebtedness to, and enter into contracts with
the Kansas development finance authority, which is authorized to borrow
money and provide financing for the authority;

    (9) develop policies and procedures generally applicable to the pro-
curement of goods, services and construction, based upon sound business
practices;

    (10) contract for and to accept any gifts, grants and loans of funds,
property, or any other aid in any form from the federal government, the
state, any state agency, or any other source, or any combination thereof,
and to comply with the provisions of the terms and conditions thereof;

    (11) acquire space, equipment, services, supplies and insurance nec-
essary to carry out the purposes of this act;

    (12) deposit any moneys of the authority in any banking institution
within or without the state or in any depository authorized to receive such
deposits, one or more persons to act as custodians of the moneys of the
authority, to give surety bonds in such amounts in form and for such
purposes as the board requires;

    (13) procure such insurance, participate in such insurance plans or
provide such self insurance or both as it deems necessary or convenient
to carry out the purposes and provisions of this act; the purchase of in-
surance, participation in an insurance plan or creation of a self-insurance
fund by the authority shall not be deemed as a waiver or relinquishment
of any sovereign immunity to which the authority or its officers, directors,
employees or agents are otherwise entitled;

    (14) appoint, supervise and set the salary and compensation of a pres-
ident of the authority who shall be appointed by and serve at the pleasure
of the board;

    (15) fix, revise, charge and collect rates, rentals, fees and other
charges for the services or facilities furnished by or on behalf of the au-
thority, and to establish policies and procedures regarding any such serv-
ice rendered for the use, occupancy or operation of any such facility; such
charges and policies and procedures not to be subject to supervision or
regulation by any commission, board, bureau or agency of the State; and

    (16) do any and all things necessary or convenient to carry out the
authority's purposes and exercise the powers given in this act.

    (b) The authority may create, own in whole or in part, or otherwise
acquire or dispose of any entity organized for a purpose related to or in
support of the mission of the authority.

    (c) The authority may participate in joint ventures with individuals,
corporations, governmental bodies or agencies, partnerships, associations,
insurers or other entities to facilitate any activities or programs consistent
with the public purpose and intent of this act.

    (d) The authority may create a nonprofit entity or entities for the
purpose of soliciting, accepting and administering grants, outright gifts
and bequests, endowment gifts and bequests and gifts and bequests in
trust which entity or entities shall not engage in trust business.

    (e) In carrying out any activities authorized by this act, the authority
may provide appropriate assistance, including the making of loans and
providing time of employees, to corporations, partnerships, associations,
joint ventures or other entities, whether or not such corporations, part-
nerships, associations, joint ventures or other entities are owned or con-
trolled in whole or in part, directly or indirectly, by the authority.

    (f) Effective with the transfer date, all moneys of the authority shall
be deposited in one or more banks or trust companies in one or more
special accounts. All banks and trust companies are authorized to give
security for such deposits if required by the authority. The moneys in
such accounts shall be paid out on a warrant or other orders of the trea-
surer of the authority or any such other person or persons as the authority
may authorize to execute such warrants or orders.

    (g) Notwithstanding any provision of law to the contrary, the author-
ity, effective with the transfer date, may invest the authority's operating
funds in any obligations or securities as authorized by the board. The
board shall adopt written investment guidelines.

    (h) The authority is authorized to negotiate contracts with one or
more qualified parties to provide collection services. The selection of a
collection services provider shall be based on responses to a request for
proposals from qualified professional firms and shall be administered in
accordance with policies adopted by the board.

    (i) Notwithstanding any provision of law to the contrary, no abortion
shall be performed, except in the event of a medical emergency, in any
medical facility, hospital or clinic owned, leased or operated by the au-
thority. The provisions of this subsection are not applicable to any mem-
ber of the physician faculty of the university of Kansas school of medicine
on property not owned, leased or operated by the authority. As used in
this subsection, ``medical emergency'' means a pregnant woman's medical
condition that, on the basis of a physician's good-faith clinical judgment,
necessitates an immediate abortion to avert the woman's death or to avert
a serious risk of substantial and irreversible impairment of a major bodily
function.

    New Sec. 9. (a) Following the creation of the authority and on the
transfer date or transfer dates under this act, the regents shall have the
authority to lease, convey, or otherwise transfer to the authority some or
all hospital assets, except land which may be leased to the authority for a
nominal amount for a term not to exceed 99 years. Any such lease, con-
veyance or transfer shall be on such terms as may be approved by the
regents, in exchange for the authority's agreement to assume the hospital
obligations and to support the education, research, patient care, care to
the medically indigent and public service activities of the university of
Kansas medical center. The authority may be compensated by the uni-
versity of Kansas medical center for such services from moneys appro-
priated by the legislature to the university of Kansas medical center for
such purposes or directly to the authority for such services.

    (b) Any such lease, conveyance or transfer of hospital assets to the
authority shall be conditioned upon the existence of a binding agreement
between the regents and the authority which provides that effective on
the transfer date under this act and thereafter, the authority shall assume
responsibility for and shall defend, indemnify and hold harmless the re-
gents and the state and the university of Kansas and its of officers and
directors with respect to:

    (1) Liabilities and duties of the regents pursuant to contracts, agree-
ments and leases for commodities, services, and supplies utilized by uni-
versity hospital, including real property leases;

    (2) claims related to the employment relationship between employ-
ees of the authority and the authority on and after the transfer date under
this act;

    (3) claims for breach of contract resulting from the authority's action
or failure to act on and after the transfer date under this act; and

    (4) claims related to the authority's errors and omissions including,
but not limited to: Medical malpractice; directors and officers liability;
workers' compensation; automobile liability; and premises, completed op-
erations and products liability.

    (c) Any lease, conveyance or transfer of hospital assets to the author-
ity shall be further conditioned upon the existence of a binding agreement
between the regents and the authority by which the authority shall accept
and agree to abide by the provisions set forth in section 2 and amend-
ments thereto concerning the mission of the authority and the provisions
in section 11 and amendments thereto concerning employees of the uni-
versity hospital.

    (d) Any disputes that arise in the transfer of property from the uni-
versity to the authority shall be resolved by the governor.

    New Sec. 10. Following the creation of the authority and on the
transfer date under this act, the regents shall have no further control over,
or responsibility for the operation of the university of Kansas hospital.

    New Sec. 11. (a) The authority may employ such employees as it may
require and upon such terms and conditions as it may establish. The
authority shall establish personnel, payroll, benefit and other such systems
as authorized by the board, such systems to be initially established or
contracted by the transfer date. The authority shall determine the qual-
ifications and duties of its employees subject to any statutes concerning
licensure, certification or registration under state law. The board shall
develop and adopt policies and procedures that will afford its employees
grievance rights, ensure that employment decisions shall be based upon
merit and fitness of applicants and shall prohibit discrimination because
of race, religion, color, sex or national origin.

    (b) Nothing in this act or any act of which it is amendatory shall be
construed as placing any officer or employee of the authority in the clas-
sified or the unclassified service under the Kansas civil service act.

    (c) All current hospital employees of the university of Kansas medical
center shall transfer to the authority. The authority and the university of
Kansas medical center shall then jointly determine any medical center
employees whose employment shall be transferred to the authority. The
university shall issue a written notice to all persons whose employment
will be transferred to the authority. After receipt of such notice, each
such employee may elect not to be employed by the authority by sub-
mitting a written statement of such election within 45 days after receipt
of such notice. Any classified employee of the university of Kansas med-
ical center who receives such notice of transfer to the authority and elects
not to become employed by the authority and who is not reemployed by
any department, institution, board, commission or agency of the state
shall be subject to the provisions of K.S.A. 75-2948 et seq. and amend-
ments thereto. Any unclassified employee or unclassified health care
worker of the university of Kansas medical center who receives such no-
tice of transfer to the authority and elects not to become employed by
the authority shall be subject to the employment policies of the university
of Kansas medical center. Any employee who accepts employment with
the authority shall not be considered to be involuntarily separated from
state employment.

    (d) Hospital employees and medical center employees of the univer-
sity of Kansas medical center who transfer to the authority to a position
of similar duties as of the transfer date shall receive the same rate of
compensation as was received by the employee prior to such transfer.

    (e) Notwithstanding the provisions of K.A.R. 1-9-13 or any other rules
and regulations or of any statute to the contrary, all vacation leave and
sick leave balances of employees of the university of Kansas medical cen-
ter who accept employment with the authority as of the transfer date shall
be transferred from the university of Kansas medical center to the au-
thority.

    (f) The authority and the university of Kansas medical center may
enter into agreements providing for the purchase of services of employees
of the university of Kansas medical center utilized in support of the hos-
pital by payment of such amounts as may be agreed upon by the parties.

    (g) Nothing in this act shall affect the representation rights of collec-
tive bargaining organizations that represent employees of the university
of Kansas medical center who transfer to the authority, nor shall it affect
any term or condition of any collective bargaining agreement in effect on
the effective date of this act. The authority shall be a public agency for
purposes of the Kansas public employer-employee relations act, K.S.A.
75-4321 et seq., and amendments thereto.

    (h) The authority is authorized to establish a health insurance plan
for the benefit of its employees or to enter into agreements with the
department of administration in accordance with K.S.A. 75-6503 and
amendments thereto, providing for the coverage of its employees under
the state employees' health insurance plan. Notwithstanding any other
provision of law to the contrary, any person whose employment is trans-
ferred to the authority as a result of this act and who is a member of any
plan providing health insurance coverage as an employee of the university
of Kansas medical center and who so elects to continue such coverage
shall continue to be a member of such health insurance plan under the
same terms and conditions as if no transfer had occurred, with such elec-
tion to continue through the current state employees' health insurance
coverage period. Alternatively, an employee may elect to become a mem-
ber of any health insurance plan established by the authority.

    New Sec. 12. (a) (1) The authority has the power and is authorized
to issue from time to time the authority's bonds in such principal amounts
as the authority determines to be necessary to provide sufficient funds
for achieving any of the authority's corporate purposes, including the pay-
ment of interest on bonds of the authority, the establishment of reserves
to secure such bonds, refunding any outstanding bonds and all other ex-
penditures of the authority incident to and necessary or convenient to
carry out its corporate purposes and powers.

    (2) Except as may otherwise be expressly provided by the authority,
every issue of the authority's bonds shall be obligations of the authority
payable out of any revenues or moneys of the authority, subject only to
any agreements with the holders of particular bonds pledging any partic-
ular revenues.

    (b) (1) The bonds shall be authorized by a resolution adopted by the
board.

    (2) For each bond issuance, the board shall select a bond financing
team, including bond counsel and bond underwriter and any other pro-
fessional service provider required, to provide all professional services
required for the bond issuance. The selection shall be based on responses
to a request for proposals from qualified professional firms, administered
in accordance with policies adopted by the board.

    (c) Any resolution authorizing any bonds or any issue thereof may
contain such provisions as deemed appropriate by the board for the pur-
pose of carrying out the authority's corporate purposes and securing such
bonds, which shall be a part of the contract with the holders thereof, as
to:

    (1) Pledging all or any part of the revenues of the authority to secure
the payment of the bonds or of any issue thereof, subject to such agree-
ments with bondholders as may then exist;

    (2) pledging all or any part of the assets of the authority to secure the
payment of the bonds or of any issue of bonds, subject to such agreements
with bondholders as may then exist, such assets to include any grant or
contribution from the federal government or any corporation, association,
institution or person;

    (3) the setting aside of reserves or sinking funds and the regulation
and disposition thereof;

    (4) limitations on the purpose to which the proceeds of sale of bonds
may be applied and pledging such proceeds to secure the payment of the
bonds or of any issues thereof;

    (5) limitations on the issuance of additional bonds, the terms upon
which additional bonds may be issued and secured, and the refunding of
outstanding or other bonds;

    (6) the procedure, if any, by which the terms of any contract with
bondholders may be amended or abrogated, the amount of bonds the
holders of which must consent thereto, and the manner in which such
consent may be given;

    (7) limitations on the amount of moneys to be expended by the au-
thority for operating expenses of the authority;

    (8) vesting in a trustee such property, rights, powers and duties in
trust as the authority may determine, which may include any or all of the
rights, powers and duties of the trustee appointed by the bondholders
pursuant to this act, and limiting or abrogating the right of the bond-
holders to appoint a trustee under this act or limiting the rights, powers
and duties of such trustee;

    (9) defining the acts or omissions to act which shall constitute a de-
fault in the obligations and duties of the authority to the holders of the
bonds and providing for the rights and remedies of the holders of the
bonds in the event of such default, including as a matter of right the
appointment of a receiver, except that such rights and remedies shall not
be inconsistent with the general laws of this state and the other provisions
of this act; and

    (10) any other matters, of like or different character, which in any
way affect the security or protection of the holders of the notes or bonds.

    (d) Any of the provisions relating to any bonds described in this sec-
tion may be set forth in a trust indenture authorized by a resolution of
the board.

    (e) The bonds of each issue may, in the discretion of the board, be
made redeemable before maturity at such prices and under such terms
and conditions as may be determined by the board. Bonds shall mature
at such time, not exceeding thirty years from their date of issue, as may
be determined by the board. The bonds may be issued as serial bonds
payable in annual installments or as term bonds or as a combination
thereof. The bonds shall bear interest at such rate either fixed or variable,
be in such denominations, be in such form, either coupon or registered,
carry such registration privileges, be executed in such manner, be payable
in such medium of payment and at such place, and be subject to such
terms of redemption as provided in the resolution of trust indenture. The
bonds of the authority may be sold by the authority, at public or private
sale, at such price as the board shall determine.

    (f) In case any officer whose signature or a facsimile of whose sig-
nature appears on any bonds or coupons attached thereto ceases to be
such officer before the delivery thereof, such signature or such facsimile
shall nevertheless be valid and sufficient for all purposes the same as if
such officer had remained in office until such delivery. The board may
also provide for the authentication of the bonds by a trustee or fiscal
agent.

    (g) Prior to the preparation of definitive bonds, the authority may,
under like restrictions, issue interim receipts or temporary bonds until
such definitive bonds have been executed and are available for delivery.

    (h) The authority, subject to such agreements with bondholders as
may then exist, has the power out of any funds available therefor to pur-
chase bonds of the authority, which shall thereupon be canceled at a price
not exceeding:

    (1) If the bonds are then redeemable, the redemption price then
applicable plus accrued interest to the next interest payment thereon; or

    (2) if the bonds are not then redeemable, the redemption price ap-
plicable on the first date after such purchase upon which the bonds be-
come subject to redemption plus accrued interest to such date.

    (i) In the discretion of the authority, the bonds may be secured by a
trust indenture by and between the authority and a corporate trustee,
which may be any trust company or bank having the power of a trust
company within or without this state. Such trust indenture may contain
such provisions for protecting and enforcing the rights and remedies of
the bondholders as may be reasonable and proper and not in violation of
law, including covenants setting forth the duties of the authority in rela-
tion to the exercise of its corporate powers and the custody, safeguarding
and application of all moneys. The authority may provide by such trust
indenture for the payment of the proceeds of the bonds and the revenues
to the trustee under such trust indenture or other depository and for the
method of disbursement thereof, with such safeguards and restrictions as
it may determine. All expenses incurred in carrying out such trust inden-
ture may be treated as a part of the operating expenses of the authority.

    (j) Any bonds issued pursuant to this section, and the income there-
from (including any profit from the sale thereof) shall at all times be free
from taxation by the state or any agency, political subdivision or instru-
mentality of the state.

    (k) Any holder of bonds issued under the provisions of this act, or
any coupons appertaining thereto and the trustee under any trust agree-
ment or resolution authorizing the issuance of such bonds, except the
rights under this act may be restricted by such trust agreement or reso-
lution, may, either at law or in equity by suit, action, mandamus or other
proceeding, protect and enforce any and all rights under the laws of the
state or granted under this act or under such agreement or resolution, or
under any other contract executed by the authority pursuant to this act,
and may enforce and compel the performance of all duties required by
this act or by such trust agreement or resolution to be performed by the
authority or by an officer thereof.

    (l) Notwithstanding any of the foregoing provisions of this act or any
recitals in any bonds issued under the provisions of this act, all such bonds
and interest coupons appertaining thereto shall be negotiable instruments
under the laws of this state, subject only to any applicable provisions for
registration.

    (m) Bonds issued under the provisions of this act are hereby made
securities in which all insurance companies, trust companies, banking
associations, savings and loan associations, investment companies, exec-
utors, administrators, trustees and other fiduciaries may properly and le-
gally invest funds, including capital in their control or belonging to them.
Such bonds are hereby made securities which may properly and legally
be deposited with and received by any state or municipal officer or any
agency or political subdivision of the state for any purpose for which the
deposit of bonds or obligations of the state is authorized by law.

    (n) Neither the state of Kansas nor the regents shall be liable for
bonds of the authority, and such bonds shall not constitute a debt of the
state or of the regents. The bonds shall contain on the face thereof a
statement to such effect.

    (o) Neither the members of the board nor any authorized person
executing bonds issued pursuant to this act shall be personally liable for
such bonds by reason of the execution or issuance thereof.

    (p) The authority shall submit to the regents, the governor and the
legislature within six months after the end of the fiscal year a report which
shall set forth a complete and detailed operating and financial statement
of the authority during such year. Also included in the report shall be
comprehensive information regarding all audit reports performed in such
year including any legislative post audit report performed under K.S.A.
46-1106 et seq. and amendments thereto and any recommendations with
reference to additional legislation or other action that may be necessary
to carry out the purposes of the authority.

    (q) This state does hereby pledge to and agree with the holders of
any bonds issued under this act that this state will not limit or alter the
rights hereby vested in the authority to fulfill the terms of any agreements
made with the such holders thereof or in any way impair the rights and
remedies of such holders until such bonds, together with the interest
thereon, with interest on any unpaid installments of interest, and all costs
and expenses in connection with any action or proceeding by or on behalf
of such holders are fully met and discharged. The authority is authorized
to include this pledge and agreement of this state in any agreement with
the holders of such bonds.

    (r) Nothing in this act shall be construed as a restriction or limitation
upon any other powers which the authority might otherwise have under
any other law of this state, and this act is cumulative to any such powers.
This act does and shall be construed to provide a complete, additional
and alternative method for the doing of the things authorized thereby
and shall be regarded as supplemental and additional to powers conferred
by other laws. However, the issuance of bonds under the provisions of
this act need not comply with the requirements of any other state law
applicable to the issuance of bonds. No proceedings, notice or approval
shall be required for the issuance of any bonds or any instrument as
security therefor, except as is provided in this act.

    (s) Any of the provisions relating to bonds described in this section
may be included in any contracts between the authority and the Kansas
development finance authority relating to obligations of the Kansas de-
velopment finance authority issued on behalf of the authority.

    New Sec. 13. The authority shall be exempt from any general ad
valorem taxes upon any property of the authority acquired and used for
its public purposes, and from any taxes or assessments upon any projects
or upon any operations of the authority or the income therefrom, and
from any taxes or assessments upon any project or any property or local
obligation acquired or used by the authority under the provisions of this
act or upon the income therefrom. Purchases by the authority to be used
for its public purposes shall not be subject to sales or use tax under K.S.A.
79-3601 et seq., K.S.A. 79-3701 et seq. and subsection (b) of K.S.A. 79-
3606 et seq. and amendments thereto. The exemptions hereby granted
shall not extend to persons or entities conducting on the authority's prop-
erty business for which payment of state and local taxes would otherwise
be required.

    New Sec. 14. The authority is authorized to enter into contractual
agreements with the university of Kansas medical center for the provision
of services. Such agreements shall provide for appropriate compensation
to the entity providing the service. When the university wishes to acquire
services from the authority, such acquisitions shall be exempt from state
purchasing statutes and may be acquired on a sole source basis. Copies
of such contractual agreements between the authority and the university
shall be maintained on file in the office of the board of regents.

    New Sec. 15. Notwithstanding any other provision of law to the con-
trary, the authority, its officers, directors, employees and agents shall con-
tinue to be subject to and covered by the Kansas tort claims act, K.S.A.
75-6101, et seq. and amendments thereto.

    Sec. 16. K.S.A. 75-6117 is hereby amended to read as follows: 75-
6117. (a) There is hereby established in the state treasury the tort claims
fund which shall be administered by the attorney general. All expendi-
tures from such fund shall be made upon warrants of the director of
accounts and reports pursuant to vouchers approved by the attorney gen-
eral or by a designee of the attorney general.

    (b) Moneys in the tort claims fund shall be used only for the purpose
of paying (1) compromises, settlements and final judgments arising from
claims against the state or an employee of the state under the Kansas tort
claims act or under the civil rights laws of the United States or of the
state of Kansas and (2) costs of defending the state or an employee of the
state in any actions or proceedings on those claims. Payment of a com-
promise or settlement shall be subject to approval by the state finance
council as provided in K.S.A. 75-6106 and amendments thereto. Payment
of a final judgment shall be made from the fund if there has been a
determination of any appeal taken from the judgment or, if no appeal is
taken, if the time for appeal has expired. No payment shall be made from
the fund to satisfy a compromise, settlement or final judgment when there
exists insurance coverage obtained therefor, except that payment shall be
made from the fund to satisfy a compromise settlement or final judgment
for claims against the state or an employee of the state in any actions or
proceedings arising from rendering or failure to render professional serv-
ices by (A) a charitable health care provider as defined by K.S.A. 75-6102
and amendments thereto, (B) a local health department as defined by
K.S.A. 65-241 and amendments thereto or an employee thereof, or (C)
an indigent health care clinic as defined by K.S.A. 75-6115 and amend-
ments thereto, or an employee thereof, even if there exists insurance
coverage obtained therefor.

    (c) Upon certification by the attorney general to the director of ac-
counts and reports that the unencumbered balance in the tort claims fund
is insufficient to pay an amount for which the fund is liable, the director
of accounts and reports shall transfer an amount equal to the insufficiency
from the state general fund to the tort claims fund.

    (d) When payment is made from the Kansas tort claims fund on behalf
of the university of Kansas hospital authority, the authority shall transfer
to the tort claims fund an amount equal to the payment made by the tort
claims fund on behalf of the authority.

    (e) This section shall be part of and supplemental to the Kansas tort
claims act.

    Sec. 17. K.S.A. 76-745 is hereby amended to read as follows: 76-745.
(a) As used in this section ``negotiating committee'' means a committee
to negotiate as provided in this act, and consisting of the executive officer
of the state board of regents or a person designated by the executive
officer, two representatives of the state educational institutions as desig-
nated by the state board of regents and the director of purchases or a
person designated by the director of purchases, except that for collection
services for hospital revenue collection for the university of Kansas med-
ical center, the negotiating committee shall consist of the chairperson of
the state board of regents or a person designated by the chairperson, the
attorney general or a person designated by the attorney general, and the
chancellor of the university of Kansas or a person designated by the chan-
cellor.

    (b) The state board of regents shall convene a negotiating committee
to obtain collection services. The negotiating committee is authorized to
negotiate contracts with one or more qualified parties to provide collec-
tion services for the state educational institutions and such contracts may
be entered on a multi-year basis, except in the case of collection services
for hospital revenue collection for the university of Kansas medical center,
each contract for such collection services shall be negotiated on the basis
of criteria prescribed by the university of Kansas medical center and shall
be entered into by the university of Kansas medical center and one or
more qualified parties.

    (c) Prior to negotiating for collection services, the committee shall
advertise for proposals, negotiate with firms submitting proposals and
select among those submitting such proposals the party or parties to con-
tract with for the purposes of collection services.

    (d) Contracts entered into pursuant to this section shall not be subject
to the provisions of K.S.A. 75-3738 to 75-3740a, inclusive, and amend-
ments thereto.

    New Sec. 18. Notwithstanding any other provision of law to the con-
trary, the authority, its officers, directors, employees and agents shall con-
tinue to be subject to the provisions of K.S.A. 40-3401, et seq. and amend-
ments thereto.

    New Sec. 19. This act shall be liberally construed. Nothing contained
herein is or shall be construed as a restriction of limitation upon any
powers which the authority might otherwise have under other law of this
state, and the provisions of this act are cumulative to such powers. The
provisions hereof do and shall be construed to provide a complete, ad-
ditional and alternative method for the doing of the things authorized and
shall be regarded as supplemental and additional to any other laws. In-
sofar as the provisions of this act are inconsistent with the provisions of
any other law, general, specific or local, the provisions of this act shall be
controlling.

    New Sec. 20. Nothing in this act should be construed as allowing the
board to either sell or lease the hospital or merge it with another insti-
tution without prior legislative authorization by statute.

    New Sec. 21. If any provision of this act or the application thereof is
held invalid, the invalidity shall not affect other provisions or applications
of the act which can be given effect without the invalid provision or ap-
plication, and to this end the provisions of this act are severable.

    New Sec. 22. (a) Notwithstanding any laws or regulations to the con-
trary, the authority shall not be subject to any further process or proce-
dure that requires the submission, review or approval to any capital pro-
ject; however, the authority shall ensure that nationally recognized fire
prevention code and life safety inspections under K.S.A. 31-132 et seq.
and amendments thereto of any capital project are conducted and that
such projects are inspected by the state fire marshal, or the state fire
marshal's designee, prior to certification for building occupancy.

    (b) The authority shall also be subject to any applicable state, county
and local building codes.

    (c) The state building codes shall supersede any like standards of a
county or local code unless those standards are more stringent than the
state standards.

    New Sec. 23. After the effective date of this act and prior to the
transfer date, the university of Kansas medical center is authorized to
transfer funds from the hospital revenue fund to the authority upon ap-
proval of the regents.

    New Sec. 24. The authority is exempt from the provisions of K.S.A.
12-1675 through 12-1677, 75-1250 through 75-1270, 75-2925 through 75-
2975, 75-3701 through 75-37,119, 75-4701 through 75-4744, and 77-501
through 77-550 and amendments thereto.

    New Sec. 25. The authority shall affiliate with the Kansas public em-
ployees retirement system on the transfer date as defined in section 3
and amendments thereto, in accordance with the provisions of K.S.A. 74-
4910 and 74-4927 and amendments thereto for current and future em-
ployees. Any person who was an employee of the university of Kansas
medical center and a member of the system on the transfer date and
whose employment is transferred to the authority as provided in the uni-
versity of Kansas hospital authority act shall continue to be a member of
the system. For all those members of the faculty and other persons em-
ployed by the board of regents who were receiving assistance in the pur-
chase of retirement annuities as provided in K.S.A. 74-4925 and amend-
ments thereto on the transfer date and whose employment is transferred
to the authority as provided in the university of Kansas hospital authority
act, the authority shall assist such employees in the purchase of retirement
annuities as provided in K.S.A. 74-4925 and amendments thereto and
shall continue to provide the insured death and disability benefits as pro-
vided in K.S.A. 74-4927a and 74-4927g and amendments thereto. For
future employees employed by the authority on or after the transfer date,
the authority shall designate whether such employee shall be a member
of the system or whether the authority shall provide assistance in the
purchase of retirement annuities as provided in K.S.A. 74-4925 and
amendments thereto.

    Sec. 26. K.S.A. 79-201b is hereby amended to read as follows: 79-
201b. The following described property, to the extent herein specified,
shall be and is hereby exempt from all property or ad valorem taxes levied
under the laws of the state of Kansas:

    First. All real property, and tangible personal property, actually and
regularly used exclusively for hospital purposes by a hospital as the same
is defined by K.S.A. 65-425, and amendments thereto, or a psychiatric
hospital as the same was defined by K.S.A. 59-2902, and amendments
thereto, as in effect on January 1, 1976, which hospital or psychiatric
hospital is operated by a corporation organized not for profit under the
laws of the state of Kansas or by a corporation organized not for profit
under the laws of another state and duly admitted to engage in business
in this state as a foreign, not-for-profit corporation, or a public hospital
authority; and all intangible property including moneys, notes and other
evidences of debt, and the income therefrom, belonging exclusively to
such a corporation and used exclusively for hospital or, psychiatric hospital
or public hospital authority purposes. This exemption shall not be
deemed inapplicable to property which would otherwise be exempt pur-
suant to this paragraph because any such hospital or, psychiatric hospital
or public hospital authority: (a) Uses such property for a nonexempt pur-
pose which is minimal in scope and insubstantial in nature if such use is
incidental to the exempt purpose enumerated in this paragraph; or (b) is
reimbursed for the actual expense of using such property for the exempt
purposes enumerated in this paragraph or paragraph second of K.S.A.
79-201, and amendments thereto; or (c) permits the use of such property
for the exempt purposes enumerated in this paragraph or paragraph sec-
ond of K.S.A. 79-201, and amendments thereto, by more than one agency
or organization for one or more of such purposes.

    Second. All real property, and tangible personal property, actually and
regularly used exclusively for adult care home purposes by an adult care
home as the same is defined by K.S.A. 39-923, and amendments thereto,
which is operated by a corporation organized not for profit under the laws
of the state of Kansas or by a corporation organized not for profit under
the laws of another state and duly admitted to engage in business in this
state as a foreign, not-for-profit corporation, charges to residents for serv-
ices of which produce an amount which in the aggregate is less than the
actual cost of operation of the home or the services of which are provided
to residents at the lowest feasible cost, taking into consideration such
items as reasonable depreciation, interest on indebtedness, acquisition
costs, interest and other expenses of financing acquisition costs, lease
expenses and costs of services provided by a parent corporation at its
costs, contributions to which are deductible under the Kansas income tax
act; and all intangible property including moneys, notes and other evi-
dences of debt, and the income therefrom, belonging exclusively to such
corporation and used exclusively for adult care home purposes. The fact
that real property or real or tangible personal property may be leased
from a not-for-profit corporation, which is exempt from federal income
taxation pursuant to section 501(c)(3) of the internal revenue code of
1986, and amendments thereto, and which is the parent corporation to
the not-for-profit operator of an adult care home, shall not be grounds to
deny exemption or deny that such property is actually and regularly used
exclusively for adult care home purposes by an adult care home, nor shall
the terms of any such lease be grounds for any such denial.

    Third. All real property, and tangible personal property, actually and
regularly used exclusively for private children's home purposes by a pri-
vate children's home as the same is defined by K.S.A. 75-3329, and
amendments thereto, which is operated by a corporation organized not
for profit under the laws of the state of Kansas or by a corporation or-
ganized not for profit under the laws of another state and duly admitted
to engage in business in this state as a foreign, not-for-profit corporation,
charges to residents for services of which produce an amount which in
the aggregate is less than the actual cost of operation of the home or the
services of which are provided to residents at the lowest feasible cost,
taking into consideration such items as reasonable depreciation and in-
terest on indebtedness, and contributions to which are deductible under
the Kansas income tax act; and all intangible property including moneys,
notes and other evidences of debt, and the income therefrom, belonging
exclusively to such a corporation and used exclusively for children's home
purposes.

    Fourth. All real property and tangible personal property, actually and
regularly used exclusively for housing for elderly and handicapped per-
sons having a limited or lower income, or used exclusively for cooperative
housing for persons having a limited or low income, assistance for the
financing of which was received under 12 U.S.C.A. 1701 et seq., or under
42 U.S.C.A. 1437 et seq., which is operated by a corporation organized
not for profit under the laws of the state of Kansas or by a corporation
organized not for profit under the laws of another state and duly admitted
to engage in business in this state as a foreign, not-for-profit corporation;
and all intangible property including moneys, notes and other evidences
of debt, and the income therefrom, belonging exclusively to such a cor-
poration and used exclusively for the purposes of such housing. For the
purposes of this subsection, cooperative housing shall mean those not-
for-profit cooperative housing projects operating pursuant to sections 236
or 221(d)(3), or both, of the national housing act and which have been
approved as a cooperative housing project pursuant to applicable federal
housing administration and U.S. Department of Housing and Urban De-
velopment statutes, and rules and regulations, during such time as the
use of such properties are restricted pursuant to such act, statutes or rules
and regulations.

    Fifth. All real property and tangible personal property, actually and
regularly used exclusively for housing for elderly persons, which is oper-
ated by a corporation organized not for profit under the laws of the state
of Kansas or by a corporation organized not for profit under the laws of
another state and duly admitted to engage in business in this state as a
foreign, not-for-profit corporation, in which charges to residents produce
an amount which in the aggregate is less than the actual cost of operation
of the housing facility or the services of which are provided to residents
at the lowest feasible cost, taking into consideration such items as rea-
sonable depreciation and interest on indebtedness and contributions to
which are deductible under the Kansas income tax act; and all intangible
property including moneys, notes and other evidences of debt, and the
income therefrom, belonging exclusively to such corporation and used
exclusively for the purpose of such housing.

    Sixth. All real property and tangible personal property actually and
regularly used exclusively for the purpose of group housing of mentally
ill or retarded and other handicapped persons which is operated by a
corporation organized not for profit under the laws of the state of Kansas
or by a corporation organized not for profit under the laws of another
state and duly admitted to engage in business in this state as a foreign,
not-for-profit corporation, in which charges to residents produce an
amount which in the aggregate is less than the actual cost of operation of
the housing facility or the services of which are provided to residents at
the lowest feasible cost, taking into consideration such items as reasonable
depreciation and interest on indebtedness and contributions to which are
deductible under the Kansas income tax act, and which is licensed as a
facility for the housing of mentally ill or retarded and other handicapped
persons under the provisions of K.S.A. 75-3307b, and amendments
thereto, or as a rooming or boarding house used as a facility for the
housing of mentally retarded and other handicapped persons which is
licensed as a lodging establishment under the provisions of K.S.A. 36-501
et seq., and amendments thereto.

    The provisions of this section shall apply to all taxable years commenc-
ing after December 31, 1995.

    Sec. 27. K.S.A. 79-3606 is hereby amended to read as follows: 79-
3606. The following shall be exempt from the tax imposed by this act:

    (a) All sales of motor-vehicle fuel or other articles upon which a sales
or excise tax has been paid, not subject to refund, under the laws of this
state except cigarettes as defined by K.S.A. 79-3301 and amendments
thereto, cereal malt beverages and malt products as defined by K.S.A. 79-
3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of
K.S.A. 79-41a02 and amendments thereto, and motor vehicles as defined
by K.S.A. 79-1017 and amendments thereto;

    (b) all sales of tangible personal property or service, including the
renting and leasing of tangible personal property, purchased directly by
the state of Kansas, a political subdivision thereof, other than a school or
educational institution, or purchased by a public or private nonprofit hos-
pital or public hospital authority or nonprofit blood, tissue or organ bank
and used exclusively for state, political subdivision, hospital or public hos-
pital authority or nonprofit blood, tissue or organ bank purposes, except
when: (1) Such state or, hospital or public hospital authority is engaged
or proposes to engage in any business specifically taxable under the pro-
visions of this act and such items of tangible personal property or service
are used or proposed to be used in such business, or (2) such political
subdivision is engaged or proposes to engage in the business of furnishing
gas, water, electricity or heat to others and such items of personal prop-
erty or service are used or proposed to be used in such business;

    (c) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly by
a public or private elementary or secondary school or public or private
nonprofit educational institution and used primarily by such school or
institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of
buildings to be used for such purposes. The exemption herein provided
shall not apply to erection, construction, repair, enlargement or equip-
ment of buildings used primarily for human habitation;

    (d) all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for
any public or private nonprofit hospital or public hospital authority, pub-
lic or private elementary or secondary school or a public or private non-
profit educational institution, which would be exempt from taxation under
the provisions of this act if purchased directly by such hospital or public
hospital authority, school or educational institution; and all sales of tan-
gible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repair-
ing, enlarging, furnishing or remodeling facilities for any political subdi-
vision of the state, the total cost of which is paid from funds of such
political subdivision and which would be exempt from taxation under the
provisions of this act if purchased directly by such political subdivision.
Nothing in this subsection or in the provisions of K.S.A. 12-3418 and
amendments thereto, shall be deemed to exempt the purchase of any
construction machinery, equipment or tools used in the constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing
or remodeling facilities for any political subdivision of the state. As used
in this subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto,
``funds of a political subdivision'' shall mean general tax revenues, the
proceeds of any bonds and gifts or grants-in-aid. Gifts shall not mean
funds used for the purpose of constructing, equipping, reconstructing,
repairing, enlarging, furnishing or remodeling facilities which are to be
leased to the donor. When any political subdivision of the state, public or
private nonprofit hospital or public hospital authority, public or private
elementary or secondary school or public or private nonprofit educational
institution shall contract for the purpose of constructing, equipping, re-
constructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an
exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering
the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the political subdivision, hospital
or public hospital authority, school or educational institution concerned
a sworn statement, on a form to be provided by the director of taxation,
that all purchases so made were entitled to exemption under this subsec-
tion. As an alternative to the foregoing procedure, any such contracting
entity may apply to the secretary of revenue for agent status for the sole
purpose of issuing and furnishing project exemption certificates to con-
tractors pursuant to rules and regulations adopted by the secretary estab-
lishing conditions and standards for the granting and maintaining of such
status. All invoices shall be held by the contractor for a period of five
years and shall be subject to audit by the director of taxation. If any
materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned
for credit or the sales or compensating tax otherwise imposed upon such
materials which will not be so incorporated in the building or other pro-
ject reported and paid by such contractor to the director of taxation not
later than the 20th day of the month following the close of the month in
which it shall be determined that such materials will not be used for the
purpose for which such certificate was issued, the political subdivision,
hospital or public hospital authority, school or educational institution con-
cerned shall be liable for tax on all materials purchased for the project,
and upon payment thereof it may recover the same from the contractor
together with reasonable attorney fees. Any contractor or any agent, em-
ployee or subcontractor thereof, who shall use or otherwise dispose of
any materials purchased under such a certificate for any purpose other
than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in subsection (g) of K.S.A. 79-3615,
and amendments thereto;

    (e) all sales of tangible personal property or services purchased by a
contractor for the erection, repair or enlargement of buildings or other
projects for the government of the United States, its agencies or instru-
mentalities, which would be exempt from taxation if purchased directly
by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumen-
talities shall contract for the erection, repair, or enlargement of any build-
ing or other project, it shall obtain from the state and furnish to the
contractor an exemption certificate for the project involved, and the con-
tractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificates to all suppliers
from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon
completion of the project the contractor shall furnish to the government
of the United States, its agencies or instrumentalities concerned a sworn
statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. As
an alternative to the foregoing procedure, any such contracting entity may
apply to the secretary of revenue for agent status for the sole purpose of
issuing and furnishing project exemption certificates to contractors pur-
suant to rules and regulations adopted by the secretary establishing con-
ditions and standards for the granting and maintaining of such status. All
invoices shall be held by the contractor for a period of five years and shall
be subject to audit by the director of taxation. Any contractor or any agent,
employee or subcontractor thereof, who shall use or otherwise dispose of
any materials purchased under such a certificate for any purpose other
than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in subsection (g) of K.S.A. 79-3615
and amendments thereto;

    (f) tangible personal property purchased by a railroad or public utility
for consumption or movement directly and immediately in interstate
commerce;

    (g) sales of aircraft including remanufactured and modified aircraft,
sales of aircraft repair, modification and replacement parts and sales of
services employed in the remanufacture, modification and repair of air-
craft sold to persons using such aircraft and aircraft repair, modification
and replacement parts as certified or licensed carriers of persons or prop-
erty in interstate or foreign commerce under authority of the laws of the
United States or any foreign government or sold to any foreign govern-
ment or agency or instrumentality of such foreign government and all
sales of aircraft, aircraft parts, replacement parts and services employed
in the remanufacture, modification and repair of aircraft for use outside
of the United States;

    (h) all rentals of nonsectarian textbooks by public or private elemen-
tary or secondary schools;

    (i) the lease or rental of all films, records, tapes, or any type of sound
or picture transcriptions used by motion picture exhibitors;

    (j) meals served without charge or food used in the preparation of
such meals to employees of any restaurant, eating house, dining car, hotel,
drugstore or other place where meals or drinks are regularly sold to the
public if such employees' duties are related to the furnishing or sale of
such meals or drinks;

    (k) any motor vehicle, semitrailer or pole trailer, as such terms are
defined by K.S.A. 8-126 and amendments thereto, or aircraft sold and
delivered in this state to a bona fide resident of another state, which motor
vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
in this state and which vehicle, semitrailer, pole trailer or aircraft will not
remain in this state more than 10 days;

    (l) all isolated or occasional sales of tangible personal property, serv-
ices, substances or things, except isolated or occasional sale of motor
vehicles specifically taxed under the provisions of subsection (o) of K.S.A.
79-3603 and amendments thereto;

    (m) all sales of tangible personal property which become an ingre-
dient or component part of tangible personal property or services pro-
duced, manufactured or compounded for ultimate sale at retail within or
without the state of Kansas; and any such producer, manufacturer or
compounder may obtain from the director of taxation and furnish to the
supplier an exemption certificate number for tangible personal property
for use as an ingredient or component part of the property or services
produced, manufactured or compounded;

    (n) all sales of tangible personal property which is consumed in the
production, manufacture, processing, mining, drilling, refining or com-
pounding of tangible personal property, the treating of by-products or
wastes derived from any such production process, the providing of serv-
ices or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from
the director of taxation and furnish to the supplier an exemption certifi-
cate number for tangible personal property for consumption in such pro-
duction, manufacture, processing, mining, drilling, refining, compound-
ing, treating, irrigation and in providing such services;

    (o) all sales of animals, fowl and aquatic plants and animals, the pri-
mary purpose of which is use in agriculture or aquaculture, as defined in
K.S.A. 47-1901, and amendments thereto, the production of food for
human consumption, the production of animal, dairy, poultry or aquatic
plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;

    (p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments
thereto, dispensed pursuant to a prescription order, as defined by K.S.A.
65-1626 and amendments thereto, by a licensed practitioner;

    (q) all sales of insulin dispensed by a person licensed by the state
board of pharmacy to a person for treatment of diabetes at the direction
of a person licensed to practice medicine by the board of healing arts;

    (r) all sales of prosthetic and orthopedic appliances prescribed in
writing by a person licensed to practice the healing arts, dentistry or
optometry. For the purposes of this subsection, the term prosthetic and
orthopedic appliances means any apparatus, instrument, device, or equip-
ment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any
disabled person in leading a normal life by facilitating such person's mo-
bility; such term shall include accessories attached or to be attached to
motor vehicles, but such term shall not include motor vehicles or personal
property which when installed becomes a fixture to real property;

    (s) all sales of tangible personal property or services purchased di-
rectly by a groundwater management district organized or operating un-
der the authority of K.S.A. 82a-1020 et seq. and amendments thereto,
which property or services are used in the operation or maintenance of
the district;

    (t) all sales of farm machinery and equipment or aquaculture ma-
chinery and equipment, repair and replacement parts therefor and serv-
ices performed in the repair and maintenance of such machinery and
equipment. For the purposes of this subsection the term ``farm machinery
and equipment or aquaculture machinery and equipment'' shall include
machinery and equipment used in the operation of Christmas tree farm-
ing but shall not include any passenger vehicle, truck, truck tractor, trailer,
semitrailer or pole trailer, other than a farm trailer, as such terms are
defined by K.S.A. 8-126 and amendments thereto. Each purchaser of
farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or
sales ticket to be retained by the seller that the farm machinery and
equipment or aquaculture machinery and equipment purchased will be
used only in farming, ranching or aquaculture production. Farming or
ranching shall include the operation of a feedlot and farm and ranch work
for hire and the operation of a nursery;

    (u) all leases or rentals of tangible personal property used as a dwell-
ing if such tangible personal property is leased or rented for a period of
more than 28 consecutive days;

    (v) all sales of food products to any contractor for use in preparing
meals for delivery to homebound elderly persons over 60 years of age and
to homebound disabled persons or to be served at a group-sitting at a
location outside of the home to otherwise homebound elderly persons
over 60 years of age and to otherwise homebound disabled persons, as
all or part of any food service project funded in whole or in part by
government or as part of a private nonprofit food service project available
to all such elderly or disabled persons residing within an area of service
designated by the private nonprofit organization, and all sales of food
products for use in preparing meals for consumption by indigent or home-
less individuals whether or not such meals are consumed at a place des-
ignated for such purpose;

    (w) all sales of natural gas, electricity, heat and water delivered
through mains, lines or pipes: (1) To residential premises for noncom-
mercial use by the occupant of such premises; (2) for agricultural use and
also, for such use, all sales of propane gas; (3) for use in the severing of
oil; and (4) to any property which is exempt from property taxation pur-
suant to K.S.A. 79-201b Second through Sixth. As used in this paragraph,
``severing'' shall have the meaning ascribed thereto by subsection (k) of
K.S.A. 79-4216, and amendments thereto;

    (x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
for the production of heat or lighting for noncommercial use of an oc-
cupant of residential premises;

    (y) all sales of materials and services used in the repairing, servicing,
altering, maintaining, manufacturing, remanufacturing, or modification of
railroad rolling stock for use in interstate or foreign commerce under
authority of the laws of the United States;

    (z) all sales of tangible personal property and services purchased di-
rectly by a port authority or by a contractor therefor as provided by the
provisions of K.S.A. 12-3418 and amendments thereto;

    (aa) all sales of materials and services applied to equipment which is
transported into the state from without the state for repair, service, al-
teration, maintenance, remanufacture or modification and which is sub-
sequently transported outside the state for use in the transmission of
liquids or natural gas by means of pipeline in interstate or foreign com-
merce under authority of the laws of the United States;

    (bb) all sales of used mobile homes or manufactured homes. As used
in this subsection: (1) ``Mobile homes'' and ``manufactured homes'' shall
have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto; and (2) ``sales of used mobile homes or manufactured homes''
means sales other than the original retail sale thereof;

    (cc) all sales of tangible personal property or services purchased for
the purpose of and in conjunction with constructing, reconstructing, en-
larging or remodeling a business or retail business which meets the
requirements established in K.S.A. 74-50,115 and amendments thereto,
and the sale and installation of machinery and equipment purchased for
installation at any such business or retail business. When a person shall
contract for the construction, reconstruction, enlargement or remodeling
of any such business or retail business, such person shall obtain from the
state and furnish to the contractor an exemption certificate for the project
involved, and the contractor may purchase materials, machinery and
equipment for incorporation in such project. The contractor shall furnish
the number of such certificates to all suppliers from whom such purchases
are made, and such suppliers shall execute invoices covering the same
bearing the number of such certificate. Upon completion of the project
the contractor shall furnish to the owner of the business or retail business
a sworn statement, on a form to be provided by the director of taxation,
that all purchases so made were entitled to exemption under this subsec-
tion. All invoices shall be held by the contractor for a period of five years
and shall be subject to audit by the director of taxation. Any contractor
or any agent, employee or subcontractor thereof, who shall use or oth-
erwise dispose of any materials, machinery or equipment purchased un-
der such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax
otherwise imposed thereon, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in sub-
section (g) of K.S.A. 79-3615 and amendments thereto. As used in this
subsection, ``business'' and ``retail business'' have the meanings respec-
tively ascribed thereto by K.S.A. 74-50,114 and amendments thereto;

    (dd) all sales of tangible personal property purchased with food
stamps issued by the United States department of agriculture;

    (ee) all sales of lottery tickets and shares made as part of a lottery
operated by the state of Kansas;

    (ff) on and after July 1, 1988, all sales of new mobile homes or man-
ufactured homes to the extent of 40% of the gross receipts, determined
without regard to any trade-in allowance, received from such sale. As used
in this subsection, ``mobile homes'' and ``manufactured homes'' shall have
the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;

    (gg) all sales of tangible personal property purchased in accordance
with vouchers issued pursuant to the federal special supplemental food
program for women, infants and children;

    (hh) all sales of medical supplies and equipment purchased directly
by a nonprofit skilled nursing home or nonprofit intermediate nursing
care home, as defined by K.S.A. 39-923, and amendments thereto, for
the purpose of providing medical services to residents thereof. This ex-
emption shall not apply to tangible personal property customarily used
for human habitation purposes;

    (ii) all sales of tangible personal property purchased directly by a non-
profit organization for nonsectarian comprehensive multidiscipline youth
development programs and activities provided or sponsored by such or-
ganization. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;

    (jj) all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly on
behalf of a community-based mental retardation facility or mental health
center organized pursuant to K.S.A. 19-4001 et seq., and amendments
thereto, and licensed in accordance with the provisions of K.S.A. 75-
3307b and amendments thereto. This exemption shall not apply to tan-
gible personal property customarily used for human habitation purposes;

    (kk) on and after January 1, 1989, all sales of machinery and equip-
ment used directly and primarily for the purposes of manufacturing, as-
sembling, processing, finishing, storing, warehousing or distributing ar-
ticles of tangible personal property in this state intended for resale by a
manufacturing or processing plant or facility or a storage, warehousing or
distribution facility:

    (1) For purposes of this subsection, machinery and equipment shall
be deemed to be used directly and primarily in the manufacture, assem-
blage, processing, finishing, storing, warehousing or distributing of tan-
gible personal property where such machinery and equipment is used
during a manufacturing, assembling, processing or finishing, storing,
warehousing or distributing operation:

    (A) To effect a direct and immediate physical change upon the tangible
personal property;

    (B) to guide or measure a direct and immediate physical change upon
such property where such function is an integral and essential part of
tuning, verifying or aligning the component parts of such property;

    (C) to test or measure such property where such function is an in-
tegral part of the production flow or function;

    (D) to transport, convey or handle such property during the manu-
facturing, processing, storing, warehousing or distribution operation at
the plant or facility; or

    (E) to place such property in the container, package or wrapping in
which such property is normally sold or transported.

    (2) For purposes of this subsection ``machinery and equipment used
directly and primarily'' shall include, but not be limited to:

    (A) Mechanical machines or major components thereof contributing
to a manufacturing, assembling or finishing process;

    (B) molds and dies that determine the physical characteristics of the
finished product or its packaging material;

    (C) testing equipment to determine the quality of the finished prod-
uct;

    (D) computers and related peripheral equipment that directly control
or measure the manufacturing process or which are utilized for engi-
neering of the finished product; and

    (E) computers and related peripheral equipment utilized for research
and development and product design.

    (3) ``Machinery and equipment used directly and primarily'' shall not
include:

    (A) Hand tools;

    (B) machinery, equipment and tools used in maintaining and repair-
ing any type of machinery and equipment;

    (C) transportation equipment not used in the manufacturing, assem-
bling, processing, furnishing, storing, warehousing or distributing process
at the plant or facility;

    (D) office machines and equipment including computers and related
peripheral equipment not directly and primarily used in controlling or
measuring the manufacturing process;

    (E) furniture and buildings; and

    (F) machinery and equipment used in administrative, accounting,
sales or other such activities of the business;

    (ll) all sales of educational materials purchased for distribution to the
public at no charge by a nonprofit corporation organized for the purpose
of encouraging, fostering and conducting programs for the improvement
of public health;

    (mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
herbicides, germicides, pesticides and fungicides; and services, purchased
and used for the purpose of producing plants in order to prevent soil
erosion on land devoted to agricultural use;

    (nn) except as otherwise provided in this act, all sales of services ren-
dered by an advertising agency or licensed broadcast station or any mem-
ber, agent or employee thereof;

    (oo) all sales of tangible personal property purchased by a community
action group or agency for the exclusive purpose of repairing or weath-
erizing housing occupied by low income individuals;

    (pp) all sales of drill bits and explosives actually utilized in the explo-
ration and production of oil or gas;

    (qq) all sales of tangible personal property and services purchased by
a nonprofit museum or historical society or any combination thereof, in-
cluding a nonprofit organization which is organized for the purpose of
stimulating public interest in the exploration of space by providing edu-
cational information, exhibits and experiences, which is exempt from fed-
eral income taxation pursuant to section 501(c)(3) of the federal internal
revenue code of 1986;

    (rr) all sales of tangible personal property which will admit the pur-
chaser thereof to any annual event sponsored by a nonprofit organization
which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986;

    (ss) all sales of tangible personal property and services purchased by
a public broadcasting station licensed by the federal communications
commission as a noncommercial educational television or radio station;

    (tt) all sales of tangible personal property and services purchased by
or on behalf of a not-for-profit corporation which is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal rev-
enue code of 1986, for the sole purpose of constructing a Kansas Korean
War memorial;

    (uu) all sales of tangible personal property and services purchased by
or on behalf of any rural volunteer fire-fighting organization for use ex-
clusively in the performance of its duties and functions;

    (vv) all sales of tangible personal property purchased by any of the
following organizations which are exempt from federal income taxation
pursuant to section 501 (c)(3) of the federal internal revenue code of
1986, for the following purposes, and all sales of any such property by or
on behalf of any such organization for any such purpose:

    (1) The American Heart Association, Kansas Affiliate, Inc. for the
purposes of providing education, training, certification in emergency car-
diac care, research and other related services to reduce disability and
death from cardiovascular diseases and stroke;

    (2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of
advocacy for persons with mental illness and to education, research and
support for their families;

    (3) the Kansas Mental Illness Awareness Council for the purposes of
advocacy for persons who are mentally ill and to education, research and
support for them and their families;

    (4) the American Diabetes Association Kansas Affiliate, Inc. for the
purpose of eliminating diabetes through medical research, public edu-
cation focusing on disease prevention and education, patient education
including information on coping with diabetes, and professional education
and training;

    (5) the American Lung Association of Kansas, Inc. for the purpose of
eliminating all lung diseases through medical research, public education
including information on coping with lung diseases, professional educa-
tion and training related to lung disease and other related services to
reduce the incidence of disability and death due to lung disease;

    (6) the Kansas chapters of the Alzheimer's Disease and Related Dis-
orders Association, Inc. for the purpose of providing assistance and sup-
port to persons in Kansas with Alzheimer's disease, and their families and
caregivers; and

    (ww) all sales of tangible personal property purchased by the Habitat
for Humanities Humanity for the exclusive use of being incorporated
within a housing project constructed by such organization.

    New Sec. 28. (a) There is hereby created the joint committee on
oversight of the university of Kansas hospital authority which shall be
within the legislative branch of state government and shall be composed
of three senators and three members of the house of representatives. The
three senate members shall be the chairperson of the committee on ways
and means of the senate or a member of the senate appointed by the
chairperson, the vice-chairperson of the committee on ways and means
of the senate or a member of the senate appointed by the vice-chairper-
son, and the ranking minority member of the committee on ways and
means of the senate or a member of the senate appointed by the ranking
minority member. The three representative members shall be the chair-
person of the committee on appropriations of the house of representatives
or a member of the house of representatives appointed by the chairper-
son, the vice-chairperson of the committee on appropriations of the house
of representatives or a member of the house of representatives appointed
by the vice-chairperson, and the ranking minority member of the com-
mittee on appropriations of the house of representatives or a member of
the house of representatives appointed by the ranking minority member.

    (b) All members of the joint committee on oversight of the university
of Kansas hospital authority shall serve for terms ending on the first day
of the regular legislative session in odd-numbered years. The joint com-
mittee shall organize annually and elect a chairperson and vice-chairper-
son in accordance with this subsection. After June 30 in odd-numbered
years, the chairperson shall be one of the representative members of the
joint committee elected by the members of the joint committee and the
vice-chairperson shall be one of the senate members elected by the mem-
bers of the joint committee. After June 30 in even-numbered years, the
chairperson shall be one of the senate members of the joint committee
elected by the members of the joint committee and the vice-chairperson
shall be on of the representative members of the joint committee elected
by the members of the joint committee. The chairperson and vice-chair-
person of the joint committee shall serve in such capacities until July 1
of the ensuing year. The vice-chairperson shall exercise all the powers of
the chairperson in the absence of the chairperson. If a vacancy occurs in
the office of chairperson or vice-chairperson, a member of the joint com-
mittee, who is a member of the same house as the member who vacated
the office, shall be elected by members of the joint committee to fill such
vacancy. Within 30 days after the effective date of this act, the joint com-
mittee shall organize and elect a chairperson and vice-chairperson in ac-
cordance with the provisions of this act.

    (c) A quorum of the joint committee shall be four. All actions of the
joint committee shall be taken by a majority of all of the members of the
joint committee.

    (d) The joint committee may meet at any time and at any place within
the state on the call of the chairperson.

    (e) The provisions of the acts contained in article 12 of chapter 46 of
the Kansas Statutes Annotated, and amendments thereto, applicable to
special committees shall apply to the joint committee on oversight of the
university of Kansas hospital authority to the extent that the same do not
conflict with the specific provisions of this act applicable to the joint
committee.

    (f) 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 oversight of the university
of Kansas hospital authority.

    (g) The joint committee on oversight of the university of Kansas hos-
pital authority may introduce such legislation as it deems necessary in
performing its functions.

    (h) In addition to other powers and duties authorized or prescribed
by law or by the legislative coordinating council, the joint committee on
oversight of the university of Kansas hospital authority shall:

    (1) Make an annual report to the legislative coordinating council as
provided in K.S.A. 46-1207 and amendments thereto and such special
reports to committees of the house of representatives and senate as are
deemed appropriate by the joint committee;

    (2) monitor the implementation of the university of Kansas hospital
authority act including the transfer of assets and liabilities from the uni-
versity of Kansas medical center to the newly-created authority and the
development of operational policies by the board of directors of the au-
thority;

    (3) review administrative systems implemented by the authority in-
cluding the establishment of personnel and financial management sys-
tems;

    (4) analyze the quantity and quality of services rendered by the au-
thority and the need for such services;

    (5) conduct an on-going review of revenues and costs;

    (6) review the authority's capital structure, plans for the issuance of
indebtedness for major equipment acquisitions or capital investments,
and long range physical development plans; and

    (7) make recommendations, including the introduction of legislation,
and take such other actions as are appropriate to assure that the purposes
of the legislation establishing the hospital authority are achieving the ob-
jectives for which the authority was created.

    (i) The provisions of this section shall expire on December 31, 2003.

    Sec. 29. K.S.A. 75-6117, 76-745, 79-201b and 79-3606 are hereby
repealed.

    Sec. 30. This act shall take effect and be in force from and after its
publication in the Kansas register.

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.

__________________________________

Cheif Clerk of the House.

Approved __________________________

__________________________________

Governor.