Session of 1998
                   
SENATE BILL No. 546
         
By Committee on Federal and State Affairs
         
1-29
            9             AN ACT concerning Kansas use law; creating the Kansas use commission;
10             powers and duties; amending K.S.A. 75-3317, 75-3319, 75-3320, 75-
11             3321 and 75-3322 and repealing the existing sections.
12            
13       Be it enacted by the Legislature of the State of Kansas:
14           New Section 1. (a) The purpose of K.S.A. 75-3317 through 75-3322,
15       and amendments thereto, is to further the policy of this state to create
16       and enhance opportunities through which persons who are blind or who
17       have severe disabilities can achieve maximum personal independence
18       through useful, productive gainful employment by assuring an expanded,
19       continuous and consistent market for the products such persons manu-
20       facture and the services such persons provide, thereby increasing the
21       capacity for self-support and dignity of persons who are blind or who have
22       severe disabilities and minimizing such persons' dependence on welfare,
23       institutionalization and tax-supported entitlements.
24           New Sec. 2. (a) There is hereby created the Kansas use commission,
25       hereinafter referred to as the commission, which shall consist of nine
26       members as follows:
27           (1) The state director of purchases or the director's designee;
28           (2) the secretary of social and rehabilitation services or the secretary's
29       designee;
30           (3) four members appointed by the governor who are administrative
31       heads of rehabilitation facilities, as defined in subsection (d) of K.S.A. 75-
32       3317 and amendments thereto, which manufacture, process or offer for
33       sale products or offer services under K.S.A. 75-3317 through 75-3322,
34       and amendments thereto, or any combination thereof, but not including
35       any employee of a rehabilitation facility operating as a central not-for-
36       profit agency pursuant to subsection (e) of section 3;
37           (4) two members appointed by the governor who are superintendents
38       or purchasing agents for unified school districts; and
39           (5) any administrative head of a state agency appointed by the gov-
40       ernor which purchases products manufactured, processed and offered for
41       sale or purchases services offered under K.S.A. 75-3317 through 75-3322,
42       and amendments thereto, or any combination thereof, or such adminis-
43       trative head's designee.

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  1           (b) All commission members shall serve for a term of four years,
  2       except that, of the members first appointed by the governor after the
  3       effective date of this act:
  4           (1) One member appointed under subsection (a)(3) of this section,
  5       and amendments thereto, and one member appointed under subsection
  6       (a)(4) of this section, and amendments thereto, shall serve for a term of
  7       two years;
  8           (2) one member each appointed under subsection (a)(3), (a)(4) and
  9       (a)(5) of this section, and amendments thereto, shall serve for a term of
10       three years; and
11           (3) two members appointed under subsection (a)(3) of this section,
12       and amendments thereto, shall serve for terms of four years.
13           (c) Any vacancy occurring in the appointive membership of the com-
14       mission shall be filled in the same manner and from the same class as the
15       original appointment.
16           (d) Any appointive position in the membership of the commission
17       which becomes vacant prior to the expiration of a full-term shall be filled
18       only for the period of the expired term.
19           (e) Final decisions of the commission shall be by majority vote of a
20       quorum of the members. A simple majority of the membership of the
21       commission shall constitute a quorum.
22           (f) The Kansas use commission shall meet at such times as deemed
23       necessary by the chairperson, or the director of purchases, or shall be
24       called within one week of receipt of written notice signed by any four
25       commission members, and sent by certified mail to the director of pur-
26       chases and the chairperson stating that a meeting is deemed necessary,
27       but shall meet no less than twice each year.
28           (g) The commission shall appoint an executive secretary and may ap-
29       point such staff as is necessary to perform duties as directed by the com-
30       mission. The staff of the commission shall be in the unclassified service
31       under the Kansas civil service act and shall receive an annual salary fixed
32       by the secretary of administration and approved by the governor. The
33       commission's staff shall receive reimbursement of all actual and necessary
34       expenses incurred in the performance of official duties, and shall be ad-
35       ministratively located in the division of purchases.
36           (h) Members of the commission shall receive no compensation for
37       their services. Members of the commission not appointed by the governor
38       shall receive travel expenses and subsistence expenses or allowances as
39       provided in K.S.A. 75-3212, and amendments thereto, which shall be paid
40       by the respective departments of such members. Appointed members of
41       the commission shall receive travel expenses and subsistence expenses or
42       allowances for attendance at meetings of the commission authorized by
43       the chairperson or the commission as provided in K.S.A. 75-3212, and

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  1       amendments thereto.
  2           (i) Costs and expenses of the commission shall be funded by estab-
  3       lishing an administrative fee to be imposed on all sales which occur under
  4       the provisions of K.S.A. 75-3317 through 75-3322, and amendments
  5       thereto. Such administrative fee and operating expenses shall be set by
  6       the commission and approved by the secretary of administration, shall be
  7       imposed only after prices have been approved, and shall not be a factor
  8       considered in the establishment of prices. The commission, with the ap-
  9       proval of the secretary of administration, shall adopt rules and regulations
10       establishing the amount of the administrative fee to be imposed and such
11       fee shall be remitted to the state treasurer. The administrative fee shall
12       be in an amount determined by the commission, and approved by the
13       secretary of administration, to fund the commission established pursuant
14       to section 2. Upon receipt of the moneys collected from the administrative
15       fee, the state treasurer shall deposit the entire amount in the state trea-
16       sury and credit such amount to the use commission fund, which is hereby
17       created.
18           (j) All costs and expenses of the Kansas use commission established
19       pursuant to section 2 shall be paid from the use commission fund.
20           (k) On the 10th day of each month, the director of accounts and
21       reports shall transfer from the state general fund to the use commission
22       fund interest earnings based on:
23           (1) The average daily balance of moneys in the use commission fund
24       for the preceding month; and
25           (2) the net earnings rate of the pooled money investment portfolio
26       for the preceding month.
27           (l) All expenditures from the use commission fund shall be made in
28       accordance with appropriation acts upon warrants of the director of ac-
29       counts and reports issued pursuant to vouchers approved by the secretary
30       of administration.
31           (m) In the event that rehabilitation facilities as defined in K.S.A.
32       75-3317, and amendments thereto, elect to establish a central not-for-
33       profit agency to represent a consortium of rehabilitation facilities, in ne-
34       gotiations to provide products and services for use by state agencies and
35       unified school districts under K.S.A. 75-3317 through 75-3322, and
36       amendments thereto, the Kansas use commission shall recognize the cen-
37       tral not-for-profit agency and negotiate with such central not-for-profit
38       agency's authorized representatives in the same manner as negotiations
39       would take place with any other rehabilitation facility.
40           New Sec. 3. The Kansas use commission established by this act shall:
41           (a) Establish and administer procedures for determining eligible re-
42       habilitation facilities for participation under K.S.A. 75-3317 through 75-
43       3322, and amendments thereto, and for registering such facilities as cov-

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  1       ered providers under this act;
  2           (b) study fair market prices and pricing trends for goods and services
  3       to be purchased by state agencies and unified school districts under K.S.A.
  4       75-3317 through 75-3322, and amendments thereto, and approve prices,
  5       by a majority of a quorum of commission members present, notwithstand-
  6       ing the provisions of subsection (d) of section 2, at any official meeting,
  7       for such goods manufactured or processed by, and services offered by,
  8       rehabilitation facilities participating under this act;
  9           (c) publish, or cause to be published, a list of products manufactured,
10       processed and offered for sale, and of services offered under K.S.A. 75-
11       3317 through 75-3322, and amendments thereto, and distribute this list
12       to the department of administration, and to each agent, employee or
13       officer authorized to purchase materials, services and supplies of any state
14       agency or unified school district;
15           (d) assist state agencies and unified school districts in identifying
16       products which are on the list of products manufactured, processed and
17       offered for sale, and of services offered under K.S.A. 75-3317 through
18       75-3322, and amendments thereto, which meet the intended uses and
19       specific needs of state agencies and unified school districts, and assist
20       rehabilitation facilities, when necessary, in modifying standards and spec-
21       ifications of products manufactured, processed and offered for sale, and
22       of services offered in order to satisfy specific needs of state agencies and
23       unified school districts;
24           (e) initiate, or assist the rehabilitation facilities, the director of pur-
25       chases, unified school districts and the central not-for-profit agency pur-
26       suant to this subsection, if applicable, in the development of new products
27       and services which can be added to the list of products; and
28           (f) make frequent contacts with each agent, employee or officer au-
29       thorized to purchase materials, services and supplies for any state agency
30       or unified school district to assist such individuals in understanding their
31       legal duties under K.S.A. 75-3317 through 75-3322, and amendments
32       thereto, and to receive information regarding anticipated product and
33       service needs which are authorized to be provided under K.S.A. 75-3317
34       through 75-3322, and amendments thereto.
35           Sec. 4. K.S.A. 75-3317 is hereby amended to read as follows: 75-
36       3317. As used in K.S.A. 75-3317 through 75-3322, and amendments
37       thereto, unless the context requires otherwise:
38           (a) ``Director of purchases'' means the director of purchases of the
39       department of administration;
40           (b) ``Kansas industries for the blind division and rehabilitation serv-
41       ices'' means workshops and home industry projects for blind or other
42       handicapped persons which are located in Kansas and which are sup-
43       ported, operated or supervised by the division of services for the blind or

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  1       rehabilitation services of the department of social and rehabilitation serv-
  2       ices ``Commission'' means Kansas use commission established pursuant to
  3       section 2;
  4           (c) ``state agency'' means any state office or officer, department,
  5       board, commission, institution, bureau or any agency, division or any unit
  6       within an office, department, board, commission or other state authority;
  7           (d) ``rehabilitation facility'' means any ;c/ommunity mental health cen-
  8       ter or community facility for the mentally retarded operating under K.S.A.
  9       19-4001 et seq. and amendments thereto or nonprofit corporation con-
10       tracting with a mental retardation governing board to provide services
11       under K.S.A. 19-4001 et seq. and amendments thereto, which has regis-
12       tered with the secretary of social and rehabilitation services for the pur-
13       poses of K.S.A. 75-3317 through 75-3322, and amendments thereto, and
14       shall also mean the Kansas foundation for the blind, Wichita, Kansas,
15       center industries, inc., Wichita, Kansas, and, upon registration hereunder,
16       any workshop or other facility for blind or other handicapped persons
17       which is located in Kansas and which is certified to the United States
18       department of labor and licensed by the secretary of social and rehabili-
19       tation services as a sheltered workshop under K.S.A. 75-3307b and
20       amendments thereto not-for-profit corporation established in the state of
21       Kansas, or agency operated by the state of Kansas, which has established
22       as a primary or significant part of its mission the provision of training
23       and employment services for persons who are blind or who have severe
24       disabilities, which employs such persons in significant numbers in the
25       manufacturing or processing of goods or the offering of services, or any
26       combination thereof, and which has been determined eligible for inclusion
27       under K.S.A. 75-3317 through 75-3322, and amendments thereto, and
28       has been registered as a covered provider by the Kansas use commission
29       pursuant to section 2.
30           ``Rehabilitation facility'' shall further mean a central not-for-profit
31       agency which may be recognized and designated by the Kansas use com-
32       mission for the purpose of representing a consortium of rehabilitation
33       facilities, as are otherwise defined in this section, in negotiations providing
34       products and services for use by state agencies as defined in this section.
35       Such central not-for-profit agency shall not be engaged in the manufac-
36       turing or processing of goods or the offering of services, or any combi-
37       nation thereof, under the provisions of K.S.A. 75-3317 through 75-3322,
38       and amendments thereto.
39           Sec. 5. K.S.A. 75-3319 is hereby amended to read as follows: 75-
40       3319. (a) The director of purchases Kansas use commission shall deter-
41       mine fair market prices of products manufactured, processed, and offered
42       for sale and of services offered under K.S.A. 75-3317 through 75-3322,
43       and amendments thereto, by the Kansas industries for the blind division

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  1       and rehabilitation services and by each rehabilitation facility. All of the
  2       products and services shall be standard conforming. Those products and
  3       services offered for purchase by or for a state agency shall meet specifi-
  4       cations required by the director of purchases Kansas use commission.
  5       Those products offered for purchase by or for a unified school district
  6       shall meet specifications required by the board of education of the unified
  7       school district. The director of purchases Kansas use commission shall
  8       revise the prices determined under this section from time to time in
  9       accordance with changing market conditions.
10           (b) Each rehabilitation facility shall cooperate with and shall provide
11       the director of purchases and the secretary of social and rehabilitation
12       services Kansas use commission with all information necessary for the
13       administration of K.S.A. 75-3317 through 75-3322, and amendments
14       thereto or, if the rehabilitation facility elects to be represented by a central
15       not-for-profit agency, such information may be provided to such agency.
16           (c) The provisions of K.S.A. 75-3317 through 75-3322, and amend-
17       ments thereto, shall apply only to products manufactured or processed in
18       Kansas or services provided in Kansas by blind or other handicapped
19       persons.
20           (d) The provisions of K.S.A. 75-3317 through 75-3322, and amend-
21       ments thereto, shall not be construed to require a unified school district
22       to purchase services offered by blind or other handicapped persons under
23       this act.
24           Sec. 6. K.S.A. 75-3320 is hereby amended to read as follows: 75-
25       3320. (a) The secretary of social and rehabilitation services Kansas use
26       commission shall furnish to the department of administration, and to each
27       person or officer authorized to purchase materials, services and supplies
28       for any state agency or unified school district, a list of products manufac-
29       tured, processed and offered for sale and of services offered under K.S.A.
30       75-3317 through 75-3322, and amendments thereto, by the Kansas in-
31       dustries for the blind division and rehabilitation services and by rehabil-
32       itation facilities. The Kansas use commission shall ensure that the list of
33       products manufactured, processed and offered for sale and of services
34       offered under K.S.A. 75-3317 through 75-3322, and amendments thereto,
35       after January 1, 1998, does not contain identical products or products
36       having identical functions, manufactured, processed or offered for sale,
37       or identical services offered in the same geographical areas, by more than
38       one rehabilitation facility. In instances where more than one rehabilitation
39       facility proposes to place on the list identical products or products having
40       identical functions, or services in the same or overlapping geographical
41       areas, the Kansas use commission shall determine which provider's pro-
42       posal was received first and such provider shall be placed on the list as
43       offering the product or service. Nothing in this section, however, shall be

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  1       construed as altering existing arrangements established prior to January
  2       1, 1998. Joint listings of cartridge king of Kansas and Kansas industries
  3       for the blind, or any not-for-profit agency which may be engaged in the
  4       privatization of Kansas industries for the blind, as providers of recycled
  5       laser cartridges shall continue so long as both of these agencies continue
  6       to manufacture or process these products, and state agencies and unified
  7       school districts purchase them. Nothing in this act shall be construed as
  8       preventing a central not-for-profit agency from involving more than one
  9       rehabilitation facility in the manufacture of identical products or products
10       having identical functions, or in the provision of services in the same or
11       overlapping geographical areas, provided that all provisions for division
12       of labor between rehabilitation facilities are determined by the central
13       not-for-profit agency. Nothing in this section shall be construed as pre-
14       venting two or more rehabilitation facilities from working jointly on a
15       voluntary basis in order to meet production demands of certain products
16       or in providing services.
17           (b) The list of products and services shall be certified by the director
18       of purchases. The secretary of social and rehabilitation services Kansas
19       use commission shall amend such list from time to time in accordance
20       with the recommendations of the director of purchases. Products and
21       services which have been placed on the list shall not be removed from the
22       list, or the source of origination changed, without good cause. If the Kan-
23       sas use commission proposes to change pricing or product specifications,
24       the existing manufacturer shall have the right of first refusal in choosing
25       to make the required changes in order to retain existing contracts and
26       existing designation on the list.
27           (c) The secretary of social and rehabilitation services may charge a
28       reasonable publication fee to those rehabilitation facilities which advertise
29       their products or services on such lists. The secretary of social and re-
30       habilitation services shall remit all moneys received pursuant to this sec-
31       tion to the state treasurer at least monthly. Upon receipt of such remit-
32       tance, the state treasurer shall deposit the entire amount thereof in the
33       state treasury and credit the same to the social welfare fund.
34           Sec. 7. K.S.A. 75-3321 is hereby amended to read as follows: 75-
35       3321. (a) The director of purchases and any person or officer authorized
36       to purchase materials and supplies for any state agency or unified school
37       district or to purchase services for any state agency or unified school
38       district, shall purchase, except as otherwise provided in this section, the
39       products and services on the list certified by the director of purchases
40       from the Kansas industries for the blind division and rehabilitation serv-
41       ices or from a rehabilitation facility, when those products are to be pro-
42       cured by or for the state or unified school district or when those services
43       are to be procured by or for the state or unified school district. Services

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  1       offered for purchase are not required to be purchased by a unified school
  2       district.
  3           (b) When any member of the Kansas use commission receives infor-
  4       mation to the effect, or suspect, that a state agency or unified school
  5       district is failing to purchase products manufactured, processed and of-
  6       fered for sale or services offered under K.S.A. 75-3317 through 75-3322,
  7       and amendments thereto, or any combination thereof, such member shall
  8       provide written notification of the suspected violation of law to the Kansas
  9       use commission. The commission shall investigate the allegations and shall
10       issue written findings after a period not to exceed 90 days from the date
11       of receipt of the initial written notification of the suspected violation of
12       law. If findings document that purchasing has taken place in violation of
13       this act, the matter shall be referred to the director of purchases and the
14       division of accounts and reports, and an amount equal to the amount of
15       purchases made in violation of this act shall be charged against an account
16       of the agency which committed the violation, and such funds shall be
17       transferred to the rehabilitation facility or facilities which manufacture,
18       process or provide the goods or services purchased in violation of this act.
19       In the event that the violator of this act is a unified school district, funds
20       as described herein shall be deducted from any allocation of state funds
21       transferred to the district from the state and such funds shall be trans-
22       ferred to the rehabilitation facility or facilities which manufacture, process
23       or provide the goods or services purchased in violation of this act.
24           (c) Nothing in this act shall prevent a rehabilitation facility from seek-
25       ing actual and punitive damages through private legal action against any
26       state agency or unified school district which is found to have failed to
27       purchase products manufactured, processed and offered for sale or serv-
28       ices offered under K.S.A. 75-3317 through 75-3322, and amendments
29       thereto.
30           Sec. 8. K.S.A. 75-3322 is hereby amended to read as follows: 75-
31       3322. Whenever the Kansas industries for the blind division and rehabil-
32       itation services and rehabilitation facilities are unable to supply the prod-
33       ucts or services needed or are unable to meet delivery requirements on
34       any order or requisition, a written waiver shall immediately be forwarded
35       to the director of purchases or purchasing officer of the unified school
36       district by the secretary of social and rehabilitation services or the sec-
37       retary's designee executive secretary of the Kansas use commission and
38       that waiver shall relieve and exempt the state or unified school district
39       purchasing authority from the mandatory provisions of K.S.A. 75-3317 to
40       75-3322, inclusive, and amendments thereto, in the case of the specific
41       order, request or requisition.
42           Sec. 9. K.S.A. 75-3317, 75-3319, 75-3320, 75-3321 and 75-3322 are
43       hereby repealed.

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  1           Sec. 10. This act shall take effect and be in force from and after its
  2       publication in the statute book.
  3