Session of 1999
         
HOUSE Substitute for SENATE BILL No. 156
         
By Committee on Appropriations
         
3-17
         
  9             AN  ACT concerning the disposition of tobacco litigation settlement pro-
10             ceeds; creating the children's trust fund and the children's initiatives
11             fund; establishing the Kansas children's authority and the children's
12             trust fund board of trustees; prescribing certain powers, duties and
13             functions; providing for the investment and management of such
14             funds; abolishing the children's health care programs fund; also re-
15             pealing K.S.A. 1998 Supp. 38-2008.
16      
17       Be it enacted by the Legislature of the State of Kansas:
18             Section  1. (a) There is hereby established in the state treasury the
19       children's trust fund which shall constitute a trust fund and shall be in-
20       vested, managed and administered by the board of trustees established
21       by section 3 and amendments thereto in accordance with the provisions
22       of this act.
23             (b) All of the moneys received by the state pursuant to the tobacco
24       litigation settlement agreements entered into by the attorney general on
25       behalf of the state of Kansas, or pursuant to any judgment rendered,
26       regarding the litigation against tobacco industry companies and related
27       entities, shall be deposited in the state treasury and credited to the chil-
28       dren's trust fund. All such moneys shall constitute an endowment which
29       shall remain credited to the children's trust fund except as provided in
30       this section or in section 2 and amendments thereto for transfers to the
31       children's initiatives fund. Expenditures may be made from the children's
32       trust fund for the payment of the operating expenses of the Kansas chil-
33       dren's authority and the children's trust fund board of trustees, including
34       the expenses of investing and managing the moneys in the children's trust
35       fund. All moneys credited to the children's trust fund shall be invested
36       to provide an ongoing source of investment earnings available for periodic
37       transfer to the children's initiatives fund in accordance with this act. All
38       expenditures from the children's trust fund shall be made in accordance
39       with appropriation acts upon warrants of the director of accounts and
40       reports issued pursuant to vouchers approved by the chairperson of the
41       board of trustees or by the chairperson's designee.
42             (c) On the effective date of this act, the director of accounts and
43       reports shall transfer all moneys credited to the children's health care

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  1       programs fund to the children's trust fund and the children's health care
  2       programs fund is hereby abolished.
  3             Sec.  2. (a) There is hereby established in the state treasury the chil-
  4       dren's initiatives fund which shall be administered in accordance with this
  5       section and the provisions of appropriation acts.
  6             (b) All moneys credited to the children's initiatives fund shall be used
  7       for the purposes of providing additional funding for programs, projects,
  8       improvements, services and other purposes directly or indirectly benefi-
  9       cial to the physical and mental health, welfare, safety and overall well-
10       being of children in Kansas as provided by appropriation or other acts of
11       the legislature. In allocating or appropriating moneys in the children's
12       initiatives fund, the legislature shall emphasize programs and services that
13       are data-driven and outcomes-based and that are designed to prevent or
14       stop children from being involved in or with tobacco, drugs, alcohol, ju-
15       venile delinquency or violence. Moneys allocated or appropriated from
16       the children's initiatives fund shall not be used to replace or substitute
17       for moneys appropriated from the state general fund or from other special
18       revenue funds.
19             (c) All expenditures from the children's initiatives fund shall be made
20       in accordance with appropriation acts upon warrants of the director of
21       accounts and reports issued pursuant to vouchers approved in the manner
22       prescribed by law.
23             (d) On July 1, 1999, or as soon thereafter as moneys are available,
24       the director of accounts and reports shall transfer $45,000,000 from the
25       children's trust fund to the children's initiatives fund. On July 1 of each
26       fiscal year thereafter, or as soon thereafter as moneys are available, the
27       director of accounts and reports shall transfer from the children's trust
28       fund to the children's initiatives fund the amount equal to 102.5% of the
29       amount transferred from the children's trust fund to the children's initia-
30       tives fund pursuant to this section during the immediately preceding fiscal
31       year. If the amounts to be received during any fiscal year under the to-
32       bacco litigation settlement agreements entered into by the attorney gen-
33       eral on behalf of the state of Kansas, or pursuant to any judgment ren-
34       dered, regarding the litigation against tobacco industry companies and
35       related entities, are reduced or increased from the amount that was an-
36       ticipated to be received for such fiscal year, as of the time the settlement
37       agreements were entered into, then the legislature may adjust the amount
38       otherwise provided by this subsection to be transferred from the chil-
39       dren's trust fund to the children's initiatives fund for such fiscal year by
40       including provisions in appropriation acts for such fiscal year that pro-
41       portionally reduce or increase, as appropriate, the amount otherwise pro-
42       vided by this subsection to be transferred from the children's trust fund
43       to the children's initiatives fund for such fiscal year.

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  1             (e) It is the intent of the legislature that, except as provided by this
  2       section, no amounts shall be transferred from the children's trust fund to
  3       the children's initiatives fund or to any other fund during any state fiscal
  4       year.
  5             Sec.  3. (a) There is hereby established the Kansas children's author-
  6       ity for the purpose of advising and providing recommendations to the
  7       governor and the legislature regarding the uses of the moneys credited
  8       to the children's initiatives fund. The Kansas children's authority shall be
  9       composed of 11 persons who are children's advocates, members of or-
10       ganizations with experience in programs that benefit children or other
11       individuals who have experience with children's programs and services
12       and who are appointed as follows:
13             (1) Seven members appointed by the governor;
14             (2) one person appointed by the speaker of the house of
15       representatives;
16             (3) one person appointed by the minority leader of the house of rep-
17       resentatives;
18             (4) one person appointed by the president of the senate; and
19             (5) one person appointed by the minority leader of the senate.
20             (b) Not more than six members of the Kansas children's authority
21       shall be members of the same political party. No member of the Kansas
22       children's authority shall be a member of the Kansas legislature. Each
23       person appointed as a member of the Kansas children's authority shall
24       serve for a term of two years and until the member's successor is ap-
25       pointed and qualified. If a vacancy occurs in the office of a member of
26       the Kansas children's authority, a successor shall be appointed in the same
27       manner as the original appointment. Each year the governor shall select
28       one of the members to serve as the chairperson of the Kansas children's
29       authority. The Kansas children's authority shall meet at least quarterly or
30       more often upon call of the chairperson. A quorum of the Kansas chil-
31       dren's authority shall be six and all actions of the authority shall be by a
32       majority of all members present when there is a quorum.
33             (c) The Kansas children's authority shall develop recommendations
34       regarding expenditures for programs, projects, improvements, services
35       and other purposes directly or indirectly beneficial to the physical and
36       mental health, welfare, safety and overall well-being of children in Kansas.
37       The authority shall submit such recommendations to the governor prior
38       to October 1 each year for consideration as part of the process of devel-
39       oping the governor's budget recommendations and to the legislature at
40       the beginning of each regular session for consideration during the process
41       of reviewing and acting on the governor's budget recommendations and
42       appropriation bills. The governor shall review and consider inclusion of
43       such recommendations in the preparation of the governor's budget report

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  1       under K.S.A. 75-3721 and amendments thereto.
  2             (d) Members of the Kansas children's authority attending meetings
  3       of the authority, or attending a subcommittee meeting authorized by the
  4       authority, shall be paid subsistence allowances, mileage and other ex-
  5       penses as provided in K.S.A. 75-3223 and amendments thereto.
  6             (e) The Kansas children's authority is hereby attached to the office
  7       of the state treasurer for purposes of budgeting, purchasing and other
  8       administrative purposes.
  9             Sec.  4. (a) There is hereby established the children's trust fund board
10       of trustees. The board of trustees shall be composed of the state treasurer
11       and eight additional members who shall be appointed as follows:
12             (1) Four persons appointed by the governor;
13             (2) one person appointed by the speaker of the house of
14       representatives;
15             (3) one person appointed by the minority leader of the house of rep-
16       resentatives;
17             (4) one person appointed by the president of the senate; and
18             (5) one person appointed by the minority leader of the senate.
19             (b) Each person appointed as a member of the board of trustees shall
20       have a background in finance or investments or shall have experience
21       working for a foundation or as a trust officer. No member of the board
22       of trustees shall be a member of the Kansas legislature. The appointment
23       of each person appointed as a member of the board of trustees shall be
24       subject to confirmation by the senate as provided in K.S.A. 75-4315b and
25       amendments thereto. Not more than five members of the board of trus-
26       tees shall be members of the same political party. Each person appointed
27       as a member of the board of trustees shall serve for a term of two years
28       and until the member's successor is appointed and confirmed. If a vacancy
29       occurs in the office of a member of the board of trustees, a successor
30       shall be appointed in the same manner as the original appointment.
31             (c) The state treasurer shall be the chairperson of the board of trus-
32       tees. A quorum of the children's trust fund board of trustees shall be five
33       and all actions of the board of trustees shall be by a majority of all mem-
34       bers present when there is a quorum.
35             (d) Members of the children's trust fund board of trustees attending
36       meetings of the board of trustees, or attending a subcommittee meeting
37       authorized by the board of trustees, shall be paid compensation, subsis-
38       tence allowances, mileage and other expenses as provided in K.S.A. 75-
39       3223 and amendments thereto.
40             (e) The children's trust fund board of trustees is hereby attached to
41       the office of the state treasurer for purposes of budgeting, purchasing
42       and other administrative purposes.
43             Sec.  5. (a) The children's trust fund board of trustees is responsible

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  1       for the management of the children's trust fund and shall invest and
  2       reinvest the moneys credited to the children's trust fund for the purpose
  3       of providing investment earnings for the children's initiatives fund and
  4       accordingly providing that the moneys are as productive as possible. In
  5       the discharge of such management and investment responsibilities the
  6       board of trustees shall contract for the services of one or more profes-
  7       sional investment managers to handle the day-to-day investment of mon-
  8       eys credited to the children's trust fund. In addition, the board of trustee
  9       shall utilize the services and assistance of the professional investment staff
10       of the Kansas public employees retirement system and shall advise and
11       consult with such professional staff in the investment and management
12       of the children's trust fund and in working with the professional invest-
13       ment managers.
14             (b) The board of trustees shall provide for amounts and duration of
15       investments and reinvestments of moneys in the children's trust fund.
16       The children's trust fund board of trustees may invest and reinvest mon-
17       eys in the children's trust fund and may acquire, retain, manage, including
18       the exercise of any voting rights, and dispose of investments of the moneys
19       in the children's trust fund. The board of trustees shall adopt investment
20       policies that allow the amount of moneys in the children's trust fund to
21       increase as much as possible to maximize the amount of moneys available
22       for the children's initiatives fund.
23             (c) In investing or reinvesting moneys in the children's trust fund,
24       there shall be exercised the judgment and care under the circumstances
25       then prevailing which persons of prudence, discretion and intelligence
26       acting in a like capacity and familiar with like matters would exercise in
27       the management of an enterprise of like character and with like purposes,
28       not in regard to speculation but in regard to the permanent disposition
29       of similar funds, considering the probable income as well as the probable
30       safety of their capital.
31             (d) All interest or other income of the investments of the moneys in
32       the children's trust fund, after payment of any management fees, shall be
33       considered income of the children's trust fund and shall be deposited in
34       the state treasury to the credit the children's trust fund.
35             Sec.  6. The children's trust fund board of trustees shall report to the
36       governor and to the legislature on the moneys credited to the children's
37       trust fund and investment earnings thereon at least once each calendar
38       quarter and on a monthly basis upon request of the governor, the presi-
39       dent of the senate or the speaker of the house of representatives. In
40       addition, the children's trust fund board of trustees shall submit a report
41       on or before October 1 of each year to the director of the budget, the
42       director of the legislative research department and the chairpersons of
43       the senate committee on ways and means and the house of representatives

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  1       committee on appropriations detailing the board's estimates as to the
  2       amounts of moneys that would be available for transfer from the chil-
  3       dren's trust fund to the children's initiatives fund during the ensuing fiscal
  4       year. The director of the budget and the governor shall use the infor-
  5       mation in such report in the preparation of the governor's budget report
  6       under K.S.A. 75-3721 and amendments thereto.
  7             Sec.  7. The board of trustees of the Kansas public employees retire-
  8       ment system shall make the services and assistance of the professional
  9       investment staff of the Kansas public employees retirement system avail-
10       able to the children's trust fund board of trustees for purposes of provid-
11       ing advice, consultation and other assistance in the investment of the
12       moneys in the children's trust fund. In accordance with the provisions of
13       appropriation acts, the state treasurer shall provide staff assistance and
14       accounting, purchasing, budgeting and other administrative services as
15       may be required to assist the children's trust fund board of trustees in
16       the performance of the powers, duties and functions prescribed by this
17       act. 
18       Sec.  8. K.S.A. 1998 Supp. 38-2008 is hereby repealed.
19        Sec.  9. This act shall take effect and be in force from and after its
20       publication in the Kansas register.