Session of 1999
HOUSE BILL No. 2396
By Committee on Business, Commerce and Labor
2-10
9 AN ACT concerning state procurement; relating to the purchases from
10 rehabilitation facilities for the blind; amending K.S.A. 75-3317, 75-
11 3319, 75-3320, 75-3321 and 75-3322 and repealing the existing
12 sections.
13
14 Be it enacted by the Legislature of the State of Kansas:
15 New Section 1. The purpose of this chapter is to further the policy
16 of this state to create and enhance opportunities through which persons
17 who are blind or severely disabled can achieve maximum personal inde-
18 pendence through useful, productive gainful employment by assuring an
19 expanded, continuous, and consistent market for the products such per-
20 sons manufacture and the services they provide, thereby increasing the
21 capacity for self-support and dignity of persons who are blind or severely
22 disabled and minimizing their dependence on welfare, costly institution-
23 alization, and tax supported entitlements.
24 Sec. 2. K.S.A. 75-3317 is hereby amended to read as follows: 75-
25 3317. As used in K.S.A. 75-3317 through 75-3322, and amendments
26 thereto, unless the context requires otherwise:
27 (a) "Director of purchases" means the director of purchases of the
28 department of administration;
29 (b) "Kansas industries for the blind division and rehabilitation serv-
30 ices" means workshops and home industry projects for blind or other
31 handicapped persons which are located in Kansas and which are sup-
32 ported, operated or supervised by the division of services for the blind or
33 rehabilitation services of the department of social and rehabilitation
34 services;
35 (c) (b) "state agency" means any state office or officer, department,
36 board, commission, institution, bureau or any agency, division or any unit
37 within an office, department, board, commission or other state authority;
38 (d) "rehabilitation facility" means any community mental health cen-
39 ter or community facility for the mentally retarded operating under K.S.A.
40 19-4001 et seq. and amendments thereto or nonprofit corporation con-
41 tracting with a mental retardation governing board to provide services
42 under K.S.A. 19-4001 et seq. and amendments thereto, which has regis-
43 tered with the secretary of social and rehabilitation services for the pur-
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1 poses of K.S.A. 75-3317 through 75-3322, and amendments thereto, and
2 shall also mean the Kansas foundation for the blind, Wichita, Kansas,
3 center industries, inc., Wichita, Kansas, and, upon registration hereunder,
4 any workshop or other facility for blind or other handicapped persons
5 which is located in Kansas and which is certified to the United States
6 department of labor and licensed by the secretary of social and rehabili-
7 tation services as a sheltered workshop under K.S.A. 75-3307b and
8 amendments thereto.
9 (c) "rehabilitation facility" means any nonprofit corporation estab-
10 lished in the state of Kansas, or agency operated by the state of Kansas,
11 which has established as a primary or significant part of its mission the
12 provision of training and employment services for persons who are blind
13 or severely disabled, which employs such persons in significant numbers
14 in the manufacturing or processing of goods and/or the offering of serv-
15 ices, and which has been determined eligible for inclusion under K.S.A.
16 75-3317 through 75-3322, and amendments thereto, and has thus been
17 duly registered as a covered provider by the Kansas use commission as
18 specified in section 3. Rehabilitation facility shall further also mean a
19 central not for profit agency which may be recognized and designated by
20 the Kansas use commission for the purpose of representing a consortium
21 of rehabilitation facilities, as are otherwise defined in this section, in ne-
22 gotiations pursuant to the provision of products and services for use by
23 state agencies as defined in this section; and
24 (d) "Commission" means the Kansas use commission authorized pur-
25 suant to section 3.
26 New Sec. 3. (a) There is hereby established the Kansas use commis-
27 sion, hereafter referred to as the commission, which shall consist of nine
28 members. The membership of the commission shall at all times include:
29 the director of purchases or the director's designee, the secretary of social
30 and rehabilitation services or the secretary's designee, the representative
31 of one additional state agency which procures goods and/or services under
32 the provisions of this act, representatives of four rehabilitation facilities
33 as defined in subsection (d) of K.S.A. 75-3317, and amendments thereto,
34 but not including any employee of a central not for profit agency, and
35 two members of boards of education of unified school districts. All mem-
36 bers of the commission, with the exception of those named in this act by
37 specific title, shall be appointed by the governor. Such members shall
38 serve for terms of four years, except that of the members first appointed
39 one representative of a rehabilitation facility, and one member of a board
40 of education of a unified school district, shall have terms of two years;
41 one representative of a rehabilitation facility, one member of a board of
42 education of a unified school district, and the representative of the ad-
43 ditional state agency which procures goods and/or services under provi-
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1 sions of this act shall have terms of three years; and two representatives
2 of rehabilitation facilities shall have terms of four years. On July 1, of each
3 year, the governor shall designate one of the gubernatorially appointed
4 members to serve as chairperson of the commission.
5 (b) The commission shall:
6 (1) Establish and administer procedures for determining eligible re-
7 habilitation facilities for participation under K.S.A. 75-3317 through 75-
8 3322, and amendments thereto, and for registering such facilities as cov-
9 ered providers under this act.
10 (2) Study fair market prices and pricing trends for goods and services
11 to be purchased by state agencies and unified school districts under the
12 provisions of this act, and negotiate and establish prices, by a simple
13 majority of a simple quorum of commission members present at any of-
14 ficial meeting, for such goods manufactured or processed by, and services
15 offered by, rehabilitation facilities participating under this act. Prices es-
16 tablished must be based on competitive, fair market values and this act
17 shall apply only to goods and services meeting conforming standards and
18 specifications. In establishing prices for products manufactured, proc-
19 essed and for services offered for sale, under K.S.A. 75-3317 through 75-
20 3322, and amendments thereto, however, the commission shall consider
21 cost factors involved with accommodating severely disabled workers in
22 manufacturing, processing and other work functions.
23 (3) Establish and revise, as necessary standards and requirement for
24 products and services to be offered for purchase by and for state agencies
25 and unified school districts.
26 (4) Publish, or cause to be published, the list of products manufac-
27 tured, processed and offered for sale, and of services offered, under
28 K.S.A. 75-3317 through 75-3322, and amendments thereto, and distribute
29 this list to the department of administration, and to each person or officer
30 authorized to purchase materials, services and supplies for any state
31 agency or unified school district.
32 (5) Initiate, or assist the secretary of social and rehabilitation services,
33 the director of purchases, and the central not for profit agency, if present,
34 in, the development of new products and services which can be added to
35 the list.
36 (6) Make frequent contacts with each person or officer authorized to
37 purchase materials, services and supplies for any state agency or unified
38 school district to assist them in understanding their obligations under
39 K.S.A. 75-3317 through 75-3322, and amendments thereto, and to receive
40 information as to anticipated product and service needs which might be
41 provided under this act.
42 (c) In the event that rehabilitation facilities as defined in K.S.A. 75-
43 3317, and amendments thereto, elect to establish a central nonprofit
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1 agency for the purpose of representing a consortium of rehabilitation
2 facilities, in negotiations pursuant to the provision of products and serv-
3 ices for use by state agencies and unified school districts under this act,
4 the Kansas use commission shall recognize the central nonprofit agency
5 and negotiate with its duly authorized representative or representatives
6 in the same manner as negotiations would take place with any other re-
7 habilitation facility. The central not-for-profit agency may charge its re-
8 habilitation facility members up to a 4% commission for its services. The
9 central not-for-profit agency may be operated by an existing rehabilitation
10 facility or may be a free standing nonprofit corporation. All goods and
11 services placed on the list of products manufactured, processed and of-
12 fered for sale, prior to the establishment and recognition of a central
13 nonprofit agency, shall continue to be regarded as an agreement estab-
14 lished with the specific manufacturer, processor, and/or provider, and
15 shall not in any manner transfer to the jurisdiction of a central nonprofit
16 agency unless such transfer is specifically requested in writing by the
17 manufacturer, processor or provider and approved by the Kansas use
18 commission.
19 (d) The Kansas use commission shall meet at such times as meetings
20 are deemed necessary by its chairperson, or the director of purchases, or
21 shall be called within one week of the receipt of written notice signed by
22 any four commission members, and transmitted by certified mail to the
23 director of purchases and the chairperson stating that a meeting is
24 deemed necessary, but shall meet no less than twice each year.
25 (e) The commission shall appoint an executive director and may ap-
26 point such staff as is necessary to perform such duties as directed by the
27 commission. The staff of the commission shall be in the unclassified serv-
28 ice under the Kansas civil service act and shall receive compensation fixed
29 by the secretary of administration with the approval of the governor. The
30 staff shall receive reimbursement of all actual and necessary expenses
31 incurred in the performance of its official duties, and shall be adminis-
32 tratively located in the division of purchases.
33 (f) Members of the Kansas use commission attending meetings of
34 such commission, or attending a subcommittee meeting thereof author-
35 ized by such commission, shall be paid amounts provided in subsection
36 (e) of K.S.A. 75-3223 and amendments thereto.
37 (g) Operating funds for the commission shall be accrued through the
38 assessing of an administrative fee attached to all sales which occur under
39 the provisions of K.S.A. 75-3317 through 75-3322 and amendments
40 thereto. The percentage of sales assigned to such operating expenses shall
41 be set by the commission with the approval of the secretary of
42 administration.
43 Sec. 4. K.S.A. 75-3319 is hereby amended to read as follows: 75-
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1 3319. (a) The director of purchases Kansas use commission shall deter-
2 mine fair market prices of products manufactured, processed, and offered
3 for sale and of services offered under K.S.A. 75-3317 through 75-3322,
4 and amendments thereto, by the Kansas industries for the blind division
5 and rehabilitation services and by each rehabilitation facility. All of the
6 products and services shall be standard conforming. Those products and
7 services offered for purchase by or for a state agency shall meet specifi-
8 cations required by the director of purchases Kansas use commission.
9 Those products offered for purchase by or for a unified school district
10 shall meet specifications required by the board of education of the unified
11 school district. The director of purchases Kansas use commission shall
12 revise the prices determined under this section from time to time in
13 accordance with changing market conditions. In determining and revising
14 prices, the commission shall consult private, for profit manufacturers,
15 processors, and providers of services; persons authorized to purchase
16 products and services for state agencies and unified school districts; ex-
17 perts in the rehabilitation and employment of persons who are blind or
18 who have severe disabilities; and experts in the field of assistive technology
19 for the severely disabled.
20 (b) Each rehabilitation facility shall cooperate with and shall provide
21 the director of purchases, the Kansas use commission and the secretary
22 of social and rehabilitation services with all information necessary for the
23 administration of K.S.A. 75-3317 through 75-3322, and amendments
24 thereto.
25 (c) The provisions of K.S.A. 75-3317 through 75-3322, and amend-
26 ments thereto, shall apply only to products manufactured or processed in
27 Kansas or services provided in Kansas by blind or other handicapped
28 persons who are blind or severely disabled.
29 (d) The provisions of K.S.A. 75-3317 through 75-3322, and amend-
30 ments thereto, shall not be construed to require a unified school district
31 to purchase services offered by blind or other handicapped persons under
32 this act.
33 Sec. 5. K.S.A. 75-3320 is hereby amended to read as follows: 75-
34 3320. (a) The secretary of social and rehabilitation services Kansas use
35 commission shall furnish to the department of administration, and to each
36 person or officer authorized to purchase materials, services and supplies
37 for any state agency or unified school district, a list of products manufac-
38 tured, processed and offered for sale and of services offered under K.S.A.
39 75-3317 through 75-3322, and amendments thereto, by the Kansas in-
40 dustries for the blind division and rehabilitation services and by rehabil-
41 itation facilities. The Kansas use commission shall insure that the list of
42 products manufactured, processed and offered for sale and of services
43 offered under K.S.A. 75-3317 through 75-3322, and amendments thereto,
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1 after July 1, 2000, does not contain identical products or products having
2 identical functions, manufactured, processed or offered for sale, or iden-
3 tical services offered in the same geographical areas, by more than one
4 rehabilitation facility. In instances where more than one rehabilitation
5 facility proposes to place on the list: identical products or products having
6 identical functions, or services in the same or overlapping geographical
7 areas, the Kansas use commission shall determine which provider's pro-
8 posal was received first, and that provider shall be the one placed on the
9 list as offering the product or service. Nothing in this section, however,
10 shall be construed as altering existing arrangements established prior to
11 July 1, 1999. Joint listings of any nonprofit corporation which may be
12 engaged in the privatization of Kansas industries for the blind, as provid-
13 ers of recycled laser cartridges shall continue so long as both of these
14 agencies continue to manufacture or process these products, and state
15 agencies and/or unified school districts have occasion to purchase them.
16 Nothing in this act shall be construed as preventing a central not-for-
17 profit agency from involving more than one rehabilitation facility, in the
18 manufacture of identical products or products having identical functions,
19 or in the provision of services in the same or overlapping areas, provided
20 that all provisions for division of labor between rehabilitation facilities
21 are handled by or through the central not-for-profit agency. Nothing in
22 this section shall be construed as preventing one rehabilitation facility
23 from established a sub contract or sub contracts with an additional re-
24 habilitation facility or facilities in order to meet production demands of
25 a given product.
26 (b) The list of products and services shall be certified by the director
27 of purchases. The secretary of social and rehabilitation services Kansas
28 use commission shall amend such list from time to time in accordance
29 consultation with the recommendations of the director of purchases.
30 Products and services, which have been placed on the list shall not be
31 removed from it, or change in source of origination, without good cause.
32 If the Kansas commission on use pricing proposes to change pricing or
33 product specifications, the existing manufacturer shall have right of first
34 refusal in choosing to make the required changes in order to retain existing
35 contracts an existing designation on the list.
36 (c) The secretary of social and rehabilitation services may charge a
37 reasonable publication fee to those rehabilitation facilities which advertise
38 their products or services on such lists. The secretary of social and re-
39 habilitation services shall remit all moneys received pursuant to this sec-
40 tion to the state treasurer at least monthly. Upon receipt of such remit-
41 tance, the state treasurer shall deposit the entire amount thereof in the
42 state treasury and credit the same to the social welfare fund.
43 Sec. 6. K.S.A. 75-3321 is hereby amended to read as follows: 75-
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1 3321. (a) The director of purchases and any person or officer authorized
2 to purchase materials and supplies or supplies for any state agency or
3 unified school district or to purchase services for any state agency shall
4 purchase, except as otherwise provided in this section, the products and
5 services on the list certified by the director of purchases from the Kansas
6 industries for the blind division and rehabilitation services or from a re-
7 habilitation facility, pursuant to K.S.A. 75-3320 and amendments thereto
8 when those products or services are to be procured by or for the state or
9 unified school district or when those services are to be procured by or
10 for the state. Services offered for purchase are not required to be pur-
11 chased by a unified school district.
12 (b) In the event that any member of the Kansas use commission should
13 receive information to the effect, or suspect, that a state agency or unified
14 school district is failing to purchase products or services offered under
15 K.S.A. 75-3317 through 75-3322, and amendments thereto, such member
16 shall provide written notification of this information to the Kansas use
17 commission whereupon, the commission shall investigate the allegations
18 and shall issue written findings after a period not to exceed 90 days from
19 the date of receipt of the initial written notification of the suspected vio-
20 lation of the law. If findings document that purchasing has taken place in
21 violation of this act, the matter shall be referred to the director of pur-
22 chases and the division of accounts and reports, and a written warning
23 specifying the nature and details of the illegal purchases shall be sent by
24 the director of purchases, through certified mail, return receipt requested,
25 to the state agency. Should a second violation of this act by the same state
26 agency come to the attention of the director of purchases and the division
27 of accounts and reports, through ongoing investigation, or through the
28 investigation of additional allegations proffered as set forth in this section,
29 within a period of one year from the issuance of the written warning, an
30 amount equal to one half of the sum of the purchases made outside of
31 compliance with this act shall be charged against the account of the agency
32 which committed the violation, and such sum shall be paid to the reha-
33 bilitation facility or facilities who manufacture, process, or provide the
34 goods or services which were purchased in violation of this act. In the
35 event that the violator of this act is a unified school district, funds in the
36 amount described herein shall be deducted from any allocation of state
37 funds transferred to the district from the state. This same formula shall
38 apply continually to subsequent violations of this act, which are docu-
39 mented as set forth herein, and which take place within a period of one
40 year or less from the issuance of a written warning or a previously as-
41 sessed violation.
42 (c) Nothing in this act shall prevent a rehabilitation facility from seek-
43 ing actual and punitive damages through private legal action against any
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1 state agency or unified school district which is found to have failed to
2 purchase products manufactured, processed and offered for sale or serv-
3 ices offered under K.S.A. 75-3317 through 75-3322 and amendments
4 thereto.
5 (d) Nothing in this act shall be construed as preventing the director
6 of purchases and any person or officer authorized to purchase materials,
7 supplies or services for any state agency or unified school district from
8 establishing sole source contractual arrangements with the provider of
9 any product or service on the list, or through the central not-for-profit
10 agency.
11 Sec. 7. K.S.A. 75-3322 is hereby amended to read as follows: 75-
12 3322. Whenever the Kansas industries for the blind division and rehabil-
13 itation services and rehabilitation facilities are unable to supply the prod-
14 ucts or services needed or are unable to meet delivery requirements on
15 any order or requisition, a written waiver shall immediately be forwarded
16 to the director of purchases or purchasing officer of the unified school
17 district by the secretary of social and rehabilitation services or the sec-
18 retary's designee executive director of the Kansas use commission and that
19 waiver shall relieve and exempt the state or unified school district pur-
20 chasing authority from the mandatory provisions of K.S.A. 75-3317 to 75-
21 3322, inclusive, and amendments thereto, in the case of the specific order,
22 request or requisition.
23 Sec. 8. K.S.A. 75-3317, 75-3319, 75-3320, 75-3321 and 75-3322 are
24 hereby repealed.
25 Sec. 9. This act shall take effect and be in force from and after its
26 publication in the statute book.