[As Amended by Senate on Final Action]
         
Session of 1999
         
SENATE Substitute for
         
HOUSE BILL No. 2558
         
By Committee on Ways and Means
         
4-30
         
11             AN  ACT concerning the disposition of certain moneys for the benefit of
12             children; disposition of tobacco litigation settlement proceeds; creating
13             the Kansas endowment for youth fund, the children's initiatives fund
14             and the children's initiatives accountability fund; establishing the Kan-
15             sas children's cabinet; prescribing certain powers, duties and functions;
16             providing for the investment and management of such funds; abolish-
17             ing the children's health care programs fund; amending K.S.A. 75-7021
18             and K.S.A. 1998 Supp. 20-367, 38-1808 and 38-1901 and repealing the
19             existing sections; also repealing K.S.A. 1998 Supp. 38-2008.
20      
21       Be it enacted by the Legislature of the State of Kansas:
22             New Section  1. (a) There is hereby established in the state treasury
23       the Kansas endowment for youth fund which shall constitute a trust fund
24       and shall be invested, managed and administered in accordance with the
25       provisions of this act by the board of trustees of the Kansas public em-
26       ployees retirement system established by K.S.A. 74-4905 and amend-
27       ments thereto.
28             (b) All of the moneys received by the state pursuant to the tobacco
29       litigation settlement agreements entered into by the attorney general on
30       behalf of the state of Kansas, or pursuant to any judgment rendered,
31       regarding the litigation against tobacco industry companies and related
32       entities, shall be deposited in the state treasury and credited to the Kansas
33       endowment for youth fund. All such moneys shall constitute an endow-
34       ment which shall remain credited to the Kansas endowment for youth
35       fund except as provided in this section or in section 2 and amendments
36       thereto for transfers to the children's initiatives fund. Expenditures may
37       be made from the Kansas endowment for youth fund for the payment of
38       the operating expenses of the Kansas children's cabinet and the board of
39       trustees, including the expenses of investing and managing the moneys,
40       which are attributable to the Kansas endowment for youth fund. All mon-
41       eys credited to the Kansas endowment for youth fund shall be invested
42       to provide an ongoing source of investment earnings available for periodic
43       transfer to the children's initiatives fund in accordance with this act. All

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  1       expenditures from the Kansas endowment for youth fund shall be made
  2       in accordance with appropriation acts upon warrants of the director of
  3       accounts and reports issued pursuant to vouchers approved by the chair-
  4       person of the board of trustees of the Kansas public employees retirement
  5       system or by the chairperson's designee.
  6             (c) On the effective date of this act, the director of accounts and
  7       reports shall transfer all moneys credited to the children's health care
  8       programs fund to the Kansas endowment for youth fund and the chil-
  9       dren's health care programs fund is hereby abolished. On and after July
10       1, 1999, whenever the children's health care programs fund, or words of
11       like effect, is referred to or designated by statute, contract or other doc-
12       ument, such reference or designation shall be deemed to apply to the
13       Kansas endowment for youth fund.
14             New Sec.  2. (a) There is hereby established in the state treasury the
15       children's initiatives fund which shall be administered in accordance with
16       this section and the provisions of appropriation acts.
17             (b) All moneys credited to the children's initiatives fund shall be used
18       for the purposes of providing additional funding for programs, projects,
19       improvements, services and other purposes directly or indirectly benefi-
20       cial to the physical and mental health, welfare, safety and overall well-
21       being of children in Kansas as provided by appropriation or other acts of
22       the legislature. In allocating or appropriating moneys in the children's
23       initiatives fund, the legislature shall emphasize programs and services that
24       are data-driven and outcomes-based and may emphasize programs and
25       services that are generally directed toward improving the lives of children
26       and youth by combating community-identified risk factors associated with
27       children and youth becoming involved in [tobacco, alcohol, drugs or]
28       juvenile delinquency. Programs funded must have a clearly articulated
29       objective to be achieved with any funds received. As a condition prece-
30       dent to funding, every program must demonstrate that the program's
31       design is supported by credible research, that the program as imple-
32       mented will constitute best practices in the field, that data is available to
33       benchmark the program's desired outcomes and that an evaluation and
34       assessment component is part of the program design and that such eval-
35       uation is capable of determining program performance, needed program
36       modifications to enhance performance, ways in which the program could
37       be modified for transfer to other venues, and when performance no
38       longer justifies funding. Community-based programs must demonstrate
39       the availability of sufficient community leadership and the capacity to
40       appropriately implement and administer the program that is funded. Pro-
41       grams which require community mobilization to successfully achieve pro-
42       gram objectives must demonstrate a specific strategy to obtain the req-
43       uisite levels of community mobilization. Moneys allocated or appropriated

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  1       from the children's initiatives fund shall not be used to replace or sub-
  2       stitute for moneys appropriated from the state general fund in the im-
  3       mediately preceding fiscal year.
  4             (c) All expenditures from the children's initiatives fund shall be made
  5       in accordance with appropriation acts upon warrants of the director of
  6       accounts and reports issued pursuant to vouchers approved in the manner
  7       prescribed by law.
  8             (d)  (1) On July 1, 1999 [2000], or as soon thereafter as moneys are
  9       available, the director of accounts and reports shall transfer, in the fol-
10       lowing order of priority, (A) first, $70,740,000 from the Kansas endow-
11       ment for youth fund to the state general fund and (B) second, $30,000,000
12       from the Kansas endowment for youth fund to the children's initiatives
13       fund.
14             (2) On July 1, 2001, or as soon thereafter as moneys are available,
15       the director of accounts and reports shall transfer $40,000,000 from the
16       Kansas endowment for youth fund to the children's initiatives fund and
17       shall transfer $10,000,000 from the Kansas endowment for youth fund to
18       the state general fund.
19             (3) On July 1, 2002, or as soon thereafter as moneys are available,
20       the director of accounts and reports shall transfer $45,000,000 from the
21       Kansas endowment for youth fund to the children's initiatives fund.
22             (4) On July 1 of each fiscal year thereafter, or as soon thereafter as
23       moneys are available, the director of accounts and reports shall transfer
24       from the Kansas endowment for youth fund to the children's initiatives
25       fund the amount equal to 102.5% of the amount transferred from the
26       Kansas endowment for youth fund to the children's initiatives fund pur-
27       suant to this section during the immediately preceding fiscal year.
28             (5) If the amounts to be received during any fiscal year under the
29       tobacco litigation settlement agreements entered into by the attorney
30       general on behalf of the state of Kansas, or pursuant to any judgment
31       rendered, regarding the litigation against tobacco industry companies and
32       related entities, are reduced or increased from the amount that was an-
33       ticipated to be received for such fiscal year, as of the time the settlement
34       agreements were entered into, then the legislature may adjust the amount
35       otherwise provided by this subsection to be transferred from the Kansas
36       endowment for youth fund to the children's initiatives fund for such fiscal
37       year by including provisions in appropriation acts for such fiscal year that
38       proportionally reduce or increase, as appropriate, the amount otherwise
39       provided by this subsection to be transferred from the Kansas endowment
40       for youth fund to the children's initiatives fund for such fiscal year. In
41       addition, for purposes of circumstances related to the investment of mon-
42       eys in the Kansas endowment for youth fund or other circumstances or
43       matters deemed sufficient by the legislature, the legislature may adjust

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  1       the amount otherwise provided by this subsection to be transferred from
  2       the Kansas endowment for youth fund to the children's initiatives fund
  3       for any fiscal year by including provisions in appropriation acts for such
  4       fiscal year that proportionally reduce or increase, as appropriate, the
  5       amount otherwise provided by this subsection to be transferred from the
  6       Kansas endowment for youth fund to the children's initiatives fund for
  7       such fiscal year.
  8             (e) It is the intent of the legislature that, except as provided by this
  9       section, no amounts shall be transferred from the Kansas endowment for
10       youth fund to the children's initiatives fund or to any other fund during
11       any state fiscal year.
12             (f) On or before the 10th day of each month, the director of accounts
13       and reports shall transfer from the state general fund to the Kansas en-
14       dowment for youth fund interest earnings based on (1) the average daily
15       balance of moneys in the children's initiatives fund for the preceding
16       month and (2) the net earnings rate of the pooled money investment
17       portfolio for the preceding month.
18             New Sec.  3. (a) The Kansas children's cabinet established by K.S.A.
19       1998 Supp. 38-1901 and amendments thereto shall advise the governor
20       and the legislature regarding the uses of the moneys credited to the chil-
21       dren's initiatives fund.
22             (b) The Kansas children's cabinet shall review, assess and evaluate all
23       uses of the moneys in the children's initiatives fund. The Kansas children's
24       cabinet shall study and shall initiate studies, assessments and evaluations,
25       by contract or otherwise, through institutions of higher education and
26       other appropriate research entities to identify best practices and to mea-
27       sure and otherwise determine the efficiency and efficacy of practices that
28       are utilized in programs, projects, improvements, services and other pur-
29       poses for which moneys are allocated or appropriated from the children's
30       initiatives fund. The costs of such reviews, assessments and evaluations
31       shall be paid from the children's initiatives accountability fund.
32             (c) There shall be conducted performance audits and other audit
33       work by the legislative post auditor upon request by the Kansas children's
34       cabinet and as directed by the legislative post audit committee in accord-
35       ance with the provisions of the legislative post audit act. The purpose of
36       such performance audits and other audit work shall be to provide inter-
37       ested parties with the program evaluation and research needed to make
38       informed decisions for the uses of moneys credited to the children's ini-
39       tiatives fund. The auditor to conduct such performance audit or other
40       audit work shall be specified in accordance with K.S.A. 46-1122 and
41       amendments thereto and if the legislative post audit committee specifies
42       under such statute that a firm, as defined by K.S.A. 46-1112 and amend-
43       ments thereto, is to perform all or part of the audit work of such audit,

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  1       such firm shall be selected and shall perform such audit work as provided
  2       in K.S.A. 46-1123 and amendments thereto and K.S.A. 46-1125 through
  3       46-1127 and amendments thereto. The audit work required pursuant to
  4       this subsection shall be conducted in accordance with generally accepted
  5       governmental auditing standards. The post auditor shall compute the rea-
  6       sonably anticipated cost of the audit work performed by a firm for such
  7       performance audit or other audit work pursuant to this subsection, subject
  8       to review and approval by the contract audit committee established by
  9       K.S.A. 46-1120 and amendments thereto, and the Kansas children's cab-
10       inet shall pay such cost from the children's initiatives accountability fund.
11       If all or part of the audit work for such performance audit or other audit
12       work is performed by the division of post audit and the division of post
13       audit incurs costs in addition to those attributable to the operations of
14       the division of post audit in the performance of other duties and respon-
15       sibilities, the post auditor shall charge the Kansas children's cabinet for
16       such additional costs and the Kansas children's cabinet shall pay such
17       charges from the children's initiatives accountability fund. The payment
18       of any such costs and any such charges shall be a transaction between the
19       division of post audit and the Kansas children's cabinet and such trans-
20       action shall be settled in accordance with the provisions of K.S.A. 75-5516
21       and amendments thereto. All moneys received by the division of post
22       audit for such costs and charges shall be credited to the audit services
23       fund.
24             (d) There is hereby established in the state treasury the children's
25       initiatives accountability fund which shall be administered in accordance
26       with this section and the provisions of appropriation acts. The governor
27       shall recommend and the legislature shall provide for moneys to be cred-
28       ited annually to the children's initiatives accountability fund by transfers
29       or other provisions of appropriation acts.
30             (e) All moneys credited to the children's initiatives accountability
31       fund shall be used for the purposes of providing funding for assessment
32       and evaluation of programs, projects, improvements, services and other
33       purposes for which moneys are allocated or appropriated from the chil-
34       dren's initiatives fund. All expenditures from the children's initiatives ac-
35       countability fund shall be made in accordance with appropriation acts
36       upon warrants of the director of accounts and reports issued pursuant to
37       vouchers approved in the manner prescribed by law.
38             (f) On or before the 10th day of each month, the director of accounts
39       and reports shall transfer from the state general fund to the Kansas en-
40       dowment for youth fund interest earnings based on (1) the average daily
41       balance of moneys in the children's initiatives accountability fund for the
42       preceding month and (2) the net earnings rate of the pooled money in-
43       vestment portfolio for the preceding month.

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  1             New Sec.  4. (a) The board of trustees is responsible for the manage-
  2       ment and investment of the fund and shall discharge the board's duties
  3       with respect to the fund solely in the interests of the beneficiaries of the
  4       fund for the exclusive purpose of providing investment revenue for the
  5       purposes for which the moneys may be used and defraying reasonable
  6       expenses of administering the fund and shall invest and reinvest moneys
  7       in the fund and acquire, retain, manage, including the exercise of any
  8       voting rights and disposal of investments of the fund within the limitations
  9       and according to the powers, duties and purposes as prescribed by this
10       section.
11             (b) Moneys in the fund shall be invested and reinvested to achieve
12       the investment objective which is preservation of the fund to provide
13       benefits to the beneficiaries of the fund and accordingly providing that
14       the moneys are as productive as possible, subject to the standards set
15       forth in this act. No moneys in the fund shall be invested or reinvested
16       if the sole or primary investment objective is for economic development
17       or social purposes or objectives.
18             (c) In investing and reinvesting moneys in the fund and in acquiring,
19       retaining, managing and disposing of investments of the fund, the board
20       of trustees shall exercise the judgment, care, skill, prudence and diligence
21       under the circumstances then prevailing, which persons of prudence, dis-
22       cretion and intelligence acting in a like capacity and familiar with such
23       matters would use in the conduct of an enterprise of like character and
24       with like aims by diversifying the investments of the fund so as to mini-
25       mize the risk of large losses, unless under the circumstances it is clearly
26       prudent not to do so, and not in regard to speculation but in regard to
27       the permanent disposition of similar funds, considering the probable in-
28       come as well as the probable safety of their capital.
29             (d) In the discharge of such management and investment responsi-
30       bilities the board of trustees may contract for the services of one or more
31       professional investment advisors or other consultants in the management
32       and investment of moneys in the fund and otherwise in the performance
33       of the duties of the board of trustees under this act.
34             (e) The board of trustees shall require that each person contracted
35       with under subsection (d) to provide services shall obtain commercial
36       insurance which provides for errors and omissions coverage for such per-
37       son in an amount to be specified by the board of trustees. The amount
38       of such coverage specified by the board of trustees shall be at least the
39       greater of $500,000 or 1% of the funds entrusted to such person up to a
40       maximum of $10,000,000. The board of trustees shall require a person
41       contracted with under subsection (d) to provide services give a fidelity
42       bond in a penal sum as may be fixed by law or, if not so fixed, as may be
43       fixed by the board of trustees, with corporate surety authorized to do

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  1       business in this state. Such persons contracted with the board of trustees
  2       pursuant to subsection (d) and any persons contracted with such persons
  3       to perform the functions specified in subsection (b) shall be deemed to
  4       be fiduciary agents of the board of trustees in the performance of con-
  5       tractual obligations.
  6             (f)  (1) Subject to the objective set forth in subsection (b) and the
  7       standards set forth in subsection (c), the board of trustees shall formulate
  8       and adopt policies and objectives for the investment and reinvestment of
  9       moneys in the fund and the acquisition, retention, management and dis-
10       position of investments of the fund. Such policies and objectives shall be
11       in writing and shall include:
12             (A) Specific asset allocation standards and objectives;
13             (B) establishment of criteria for evaluating the risk versus the poten-
14       tial return on a particular investment; and
15             (C) a requirement that all investment advisors, and any managers or
16       others with similar duties and responsibilities as investment advisors, shall
17       immediately report all instances of default on investments to the board
18       of trustees and provide such board of trustees with recommendations and
19       options, including, but not limited to, curing the default or withdrawal
20       from the investment.
21             (2) The board of trustees shall review such policies and objectives,
22       make changes considered necessary or desirable and readopt such policies
23       and objectives on an annual basis.
24             (g)  (1) Except as provided in subsection (d) and this subsection, the
25       custody of money and securities of the fund shall remain in the custody
26       of the state treasurer, except that the board of trustees may arrange for
27       the custody of such money and securities as it considers advisable with
28       one or more member banks or trust companies of the federal reserve
29       system or with one or more banks in the state of Kansas, or both, to be
30       held in safekeeping by the banks or trust companies for the collection of
31       the principal and interest or other income or of the proceeds of sale.
32             (2) The state treasurer and the board of trustees shall collect the
33       principal and interest or other income of investments or the proceeds of
34       sale of securities in the custody of the state treasurer and shall pay such
35       moneys when so collected into the state treasury to the credit of the fund.
36             (3) The principal and interest or other income or the proceeds of sale
37       of securities as provided in paragraph (1) of this subsection shall be re-
38       ported to the state treasurer and the board of trustees and credited to
39       the fund.
40             (h) All interest or other income of the investments of the moneys in
41       the fund, after payment of any management fees, shall be considered
42       income of the fund and shall be deposited in the state treasury to the
43       credit of the fund.

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  1             (i) As used in this section:
  2             (1) "Board of trustees" means the board of trustees of the Kansas
  3       public employees retirement system established by K.S.A. 74-4905 and
  4       amendments thereto.
  5             (2) "Fiduciary" means a person who, with respect to the fund, is a
  6       person who:
  7             (A) Exercises any discretionary authority with respect to administra-
  8       tion of the fund;
  9             (B) exercises any authority to invest or manage assets of the fund or
10       has any authority or responsibility to do so;
11             (C) provides investment advise for a fee or other direct or indirect
12       compensation with respect to the assets of the fund or has any authority
13       or responsibility to do so;
14             (D) provides actuarial, accounting, auditing, consulting, legal or other
15       professional services for a fee or other direct or indirect compensation
16       with respect to the fund or has any authority or responsibility to do so;
17       or
18             (E) is a member of the board of trustees or of the staff of the board
19       of trustees.
20             (3) "Fund" means the Kansas endowment for youth fund and the
21       family and the children endowment account of the family and children
22       investment fund.
23             (4) With respect to the investment of moneys in the Kansas endow-
24       ment for youth fund, "purposes for which the moneys may be used"
25       means the purposes for which the moneys in the children's initiatives
26       fund may be used, as provided in section 2 and amendments thereto, and
27       "beneficiaries of the fund" means the beneficiaries of the children's ini-
28       tiatives fund, as provided by section 2 and amendments thereto.
29             (5) With respect to the investment of moneys in the family and chil-
30       dren endowment account of the family and children investment fund,
31       "purposes for which the moneys may be used" means the purposes for
32       which the moneys in the family and children trust account of the family
33       and children investment fund may be used, as provided in subsection (c)
34       of K.S.A. 1998 Supp. 38-1808, and amendments thereto, and "benefici-
35       aries of the fund" means the beneficiaries of the family and children trust
36       account of the family and children investment fund may be used, as pro-
37       vided in subsection (c) of K.S.A. 1998 Supp. 38-1808, and amendments
38       thereto.
39             New Sec.  5. The board of trustees of the Kansas public employees
40       retirement system shall report to the governor and to the legislature on
41       the moneys credited to the Kansas endowment for youth fund and in-
42       vestment earnings thereon at least once each calendar quarter and on a
43       monthly basis upon request of the governor, the president of the senate

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  1       or the speaker of the house of representatives. In addition, the board of
  2       trustees shall submit a report on or before October 1 of each year to the
  3       director of the budget, the director of the legislative research department
  4       and the chairpersons of the senate committee on ways and means and
  5       the house of representatives committee on appropriations detailing the
  6       board's estimates as to the amounts of moneys that would be available
  7       for transfer from the Kansas endowment for youth fund to the children's
  8       initiatives fund during the ensuing fiscal year. The director of the budget
  9       and the governor shall use the information in such report in the prepa-
10       ration of the governor's budget report under K.S.A. 75-3721 and amend-
11       ments thereto.
12             Sec.  6. K.S.A. 1998 Supp. 20-367 is hereby amended to read as fol-
13       lows: 20-367. Of the remittance of the balance of docket fees received
14       monthly by the state treasurer from clerks of the district court pursuant
15       to subsection (f) of K.S.A. 20-362, and amendments thereto, the state
16       treasurer shall deposit and credit to the access to justice fund, a sum
17       equal to 6.94% of the remittances of docket fees; to the juvenile detention
18       facilities fund, a sum equal to 4.45% of the remittances of docket fees;
19       to the judicial branch education fund, the state treasurer shall deposit
20       and credit a sum equal to 3.42% of the remittances of docket fees; to the
21       crime victims assistance fund, the state treasurer shall deposit and credit
22       a sum equal to .92% of the remittances of the docket fees; to the protec-
23       tion from abuse fund, the state treasurer shall deposit and credit a sum
24       equal to 2.75% of the remittances of the docket fees; to the judiciary
25       technology fund, the state treasurer shall deposit and credit a sum equal
26       to 6.93% of the remittances of docket fees; to the dispute resolution fund,
27       the state treasurer shall deposit and credit a sum equal to .57% of the
28       remittances of docket fees; to the Kansas endowment for youth juvenile
29       delinquency prevention trust fund, the state treasurer shall deposit and
30       credit a sum equal to 2.03% of the remittances of docket fees; and to the
31       permanent families account in the family and children investment fund,
32       the state treasurer shall deposit and credit a sum equal to .33% of the
33       remittances of docket fees. The balance remaining of the remittances of
34       docket fees shall be deposited and credited to the state general fund.
35             Sec.  7. K.S.A. 1998 Supp. 38-1808 is hereby amended to read as
36       follows: 38-1808. (a) There is hereby established in the state treasury the
37       family and children investment fund. On and after July 1, 1997, such The
38       family and children investment fund shall be administered as provided in
39       this section.
40             (b) There shall be credited to the family and children investment
41       fund appropriations, gifts, grants, contributions, matching funds and par-
42       ticipant payments.
43             (c)  (1) There is hereby created the family and children trust account

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  1       in the family and children investment fund. The secretary of social and
  2       rehabilitation services shall administer this the family and children trust
  3       account.
  4             (2) Moneys credited to the family and children trust account shall be
  5       used for the following purposes: (A) Matching federal moneys to purchase
  6       services relating to community-based programs for the broad range of
  7       child abuse and neglect prevention activities; (B) providing start-up or
  8       expansion grants for community-based prevention projects for the broad
  9       range of child abuse and neglect prevention activities; (C) studying and
10       evaluating community-based prevention projects for the broad range of
11       child abuse and neglect prevention activities; (D) preparing, publishing,
12       purchasing and disseminating educational material dealing with the broad
13       range of child abuse and neglect prevention activities; and (E) payment
14       of the administrative costs of the family and children trust account and
15       of that portion of the advisory committee on children and families Kansas
16       children's cabinet, established pursuant to K.S.A. 1998 Supp. 38-1901,
17       and amendments thereto, which are attributable to the family and chil-
18       dren trust account, and that portion of the administrative costs of the
19       board of trustees, of the Kansas public employees retirement system es-
20       tablished by K.S.A. 74-4905, and amendments thereto, which are attrib-
21       utable to the family and children endowment account of the family and
22       children investment fund. No moneys in the family and children trust
23       account shall be used for the purpose of providing services for the vol-
24       untary termination of pregnancy.
25             (3) Expenditures from the family and children trust account shall be
26       subject to the approval of the advisory committee on children and families
27       Kansas children's cabinet established pursuant to K.S.A. 1998 Supp. 38-
28       1901, and amendments thereto. All expenditures from the family and
29       children trust account shall be made in accordance with appropriation
30       acts upon warrants of the director of accounts and reports issued pursuant
31       to vouchers approved by the secretary of social and rehabilitation services
32       or a person designated by the secretary.
33             (d)  (1) There is hereby created the permanent families account in
34       the family and children investment fund. The judicial administrator of
35       the courts shall administer this account.
36             (2) Moneys credited to the permanent families account shall be used
37       for the following purposes: (A) Not more than 12% of the amount cred-
38       ited to the permanent families account during the fiscal year may be used
39       to provide technical assistance to district courts or local groups wanting
40       to establish a local citizen review board or a court-appointed special ad-
41       vocate program, including but not limited to such staff as necessary to
42       provide such assistance, and to provide services necessary for the admin-
43       istration of such board or program, including but not limited to grants

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  1       administration, accounting, data collection, report writing and training of
  2       local citizen review board staff; (B) grants to court-appointed special ad-
  3       vocate programs, upon application approved by the administrative judge
  4       of the judicial district where the program is located; and (C) grants to
  5       district courts, upon application of the administrative judge of the judicial
  6       district, for expenses of establishment, operation and evaluation of local
  7       citizen review boards in the judicial district, including costs of: (i) Em-
  8       ploying local citizen review board coordinators and clerical staff; (ii) tel-
  9       ephone, photocopying and office equipment and supplies for which there
10       are shown to be no local funds available; (iii) mileage of staff and board
11       members; and (iv) training staff and board members.
12             (3) In addition to the other duties and powers provided by law, in
13       administering the permanent families account, the judicial administrator
14       shall:
15             (A) Accept and receive grants, loans, gifts or donations from any pub-
16       lic or private entity in support of programs administered by the judicial
17       administrator and assist in the development of supplemental funding
18       sources for local and state programs;
19             (B) consider applications for and make such grants from the perma-
20       nent families account as authorized by law; and
21             (C) receive reports from local citizen review boards established pur-
22       suant to K.S.A. 38-1812, and amendments thereto, regarding the status
23       of children under the supervision of the district courts and regarding
24       systemic barriers to permanence for children, assure that appropriate data
25       is maintained regularly and compiled at least once a year by such boards
26       on all cases reviewed and assure that the effectiveness of such boards is
27       evaluated on an ongoing basis, using, where possible, random selection
28       of local citizen review boards and cases for the evaluation and including
29       client outcome data to determine effectiveness.
30             (4) All expenditures from the permanent families account shall be
31       made in accordance with appropriation acts upon warrants of the director
32       of accounts and reports issued pursuant to vouchers approved by the
33       judicial administrator or a person designated by the judicial administrator.
34             (e) The family and children endowment account of the family and
35       children investment fund shall constitute and shall be administered as an
36       endowment for the purposes for which expenditures may be made from
37       the family and children trust account of the family and children invest-
38       ment fund. The family and children endowment account of the family and
39       children investment fund shall be invested by the board of trustees of the
40       Kansas public employees retirement system established by K.S.A. 74-4905,
41       and amendments thereto. All interest or other income of the investments
42       of the moneys in the family and children trust account of the family and
43       children investment fund, after payment of any management and admin-

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  1       istrative fees, shall be considered income of the family and children trust
  2       account of the family and children investment fund and shall be deposited
  3       in the state treasury to the credit of the family and children trust account
  4       of the family and children investment fund.
  5             (f) On or before the 10th of each month, the director of accounts and
  6       reports shall transfer from the state general fund to the family and chil-
  7       dren investment fund interest earnings based on:
  8             (1) The average daily balance of moneys in the family and children
  9       investment fund for the preceding month, excluding all amounts credited
10       to the family and children endowment account of the family and children
11       investment fund; and
12             (2) the net earnings rate of the pooled money investment portfolio
13       for the preceding month.
14             Sec.  8. K.S.A. 1998 Supp. 38-1901 is hereby amended to read as
15       follows: 38-1901. On and after July 1, 1997 the effective date of this act:
16             (a) The advisory committee on children and families is hereby created
17       redesignated and shall be known and referred to as the Kansas children's
18       cabinet.
19             (b) The advisory committee on children and families Kansas chil-
20       dren's cabinet shall consist of nine 15 members as follows: (1) The sec-
21       retary of health and environment, or the secretary's designee; (2) the
22       secretary of social and rehabilitation services, or the secretary's designee;
23       (3) the secretary of human resources a member of the state board of
24       regents selected by the state board of regents, or such member's designee;
25       (4) the commissioner of education, or the commissioner's designee; (5)
26       the commissioner of juvenile justice, or the commissioner's designee; (6)
27       a member of the Kansas supreme court selected by the Kansas supreme
28       court, or such member's designee; and (7) three five members of the
29       public who are interested in and knowledgeable about the needs of chil-
30       dren and families shall be appointed by the governor, except that the
31       members appointed by the governor to the advisory committee on chil-
32       dren and families created by executive order 97-1 on January 9, 1997,
33       shall be deemed members appointed by the governor of the advisory
34       committee on children and families established by this section which,
35       subject to the provisions of subsection (e), may include persons who are
36       children's advocates, members of organizations with experience in pro-
37       grams that benefit children or other individuals who have experience with
38       children's programs and services; (7) [(8)] one person appointed by the
39       speaker of the house of representatives; (8) [(9)] one person appointed
40       by the minority leader of the house of representatives; (9) [(10)] one
41       person appointed by the president of the senate; and (10) [(11)] one
42       person appointed by the minority leader of the senate. The members des-
43       ignated by clauses (1), (2), (3), (4), (5) and (6) of this subsection shall be

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  1       nonvoting members of the Kansas children's cabinet. All other members
  2       shall be voting members.
  3             (c)  (1) Except as provided in paragraph (2) of this subsection, the
  4       members of the advisory committee on children and families Kansas chil-
  5       dren's cabinet appointed by the governor, speaker, president and minority
  6       leaders shall serve at the pleasure of the governor for terms of four years
  7       and until their successors are appointed and qualified. The governor shall
  8       appoint a chairperson of the committee and from among the members
  9       appointed by the governor. The chairperson shall serve in such office
10       throughout such member's current term of office and until a successor is
11       appointed and qualified. The members of the committee Kansas chil-
12       dren's cabinet may elect any additional officers from among its members
13       necessary to carry out the duties and functions of the committee Kansas
14       children's cabinet.
15             (2) Of the members first appointed by the governor, two shall be
16       appointed for terms of two years, two shall be appointed for terms of three
17       years and the member selected by the governor to be the chairperson shall
18       be appointed for a term of four years. The member first appointed by the
19       speaker of the house of representatives shall be appointed for a term of
20       one year, the member first appointed by the minority leader of the house
21       of representatives shall be appointed for a term of two years, the member
22       first appointed by the president of the senate shall be appointed for a term
23       of three years and the member first appointed by the minority leader of
24       the senate shall be appointed for a term of four years. The governor shall
25       designate the term for which each of the members first appointed by the
26       governor shall serve.
27             (3) All members appointed to fill vacancies in the membership of the
28       Kansas children's cabinet and all members appointed to succeed members
29       appointed to membership on the Kansas children's cabinet shall be ap-
30       pointed in like manner as that provided for the original appointment of
31       the member succeeded. All members appointed to fill vacancies of a mem-
32       ber of the Kansas children's cabinet appointed by the governor, the
33       speaker of the house of representatives, the minority leader of the house
34       of representatives, the president of the senate or the minority leader of
35       the senate shall be appointed to fill the unexpired term of such member.
36             (d) Not more than three members of the Kansas children's cabinet
37       appointed by the governor under subsection (b)(7) shall be members of
38       the same political party. No member of the Kansas children's cabinet shall
39       be a member of the Kansas legislature.
40             (e)  (1) No person shall serve on the Kansas children's cabinet if such
41       person has knowingly acquired a substantial interest in any business. Any
42       such person who knowingly acquires such an interest shall vacate such
43       member's position on the Kansas children's cabinet.

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  1             (2) For purposes of this subsection, "substantial interest" means any
  2       of the following:
  3             (A) If an individual or an individual's spouse, either individually or
  4       collectively, has owned within the preceding 12 months a legal or equi-
  5       table interest exceeding $5,000 or 5% of any business, whichever is less,
  6       the individual has a substantial interest in that business.
  7             (B) If an individual or an individual's spouse, either individually or
  8       collectively, has received during the preceding calendar year compensa-
  9       tion which is or will be required to be included as taxable income on
10       federal income tax returns of the individual and spouse in an aggregate
11       amount of $2,000 from any business or combination of businesses, the
12       individual has a substantial interest in that business or combination of
13       businesses.
14             (C) If an individual or an individual's spouse holds the position of
15       officer, director, associate, partner or proprietor of any business, the in-
16       dividual has a substantial interest in that business, irrespective of that
17       amount of compensation received by the individual or the individual's
18       spouse.
19             (D) If an individual or an individual's spouse receives compensation
20       which is a portion or percentage of each separate fee or commission paid
21       to a business or combination of businesses, the individual has a substantial
22       interest in any client or customer who pays fees or commissions to the
23       business or combination of businesses from which fees or commissions the
24       individual or the individual's spouse, either individually or collectively,
25       received an aggregate of $2,000 or more in the preceding calendar year.
26             (3) As used in this subsection, "client or customer" means a business
27       or combination of businesses.
28             (4) As used in this subsection, "business" means any entity which is
29       eligible to receive funds from the children's initiatives fund, as provided
30       in section 2 and amendments thereto, from the children's initiatives ac-
31       countability fund, established by section 3 and amendments thereto, or
32       from the family and children trust account of the family and children
33       investment fund, as provided in K.S.A. 38-1808 and amendments thereto.
34             (d) (f) The advisory committee on children and families Kansas chil-
35       dren's cabinet shall meet upon the call of the chairperson as necessary to
36       carry out the duties and functions of the committee Kansas children's
37       cabinet. A quorum of the Kansas children's cabinet shall be five voting
38       members.
39             (e) (g) The advisory committee on children and families Kansas chil-
40       dren's cabinet shall have and perform the following functions:
41             (1) Assist the governor in developing and implementing a coordi-
42       nated, comprehensive service delivery system to serve the children and
43       families of Kansas;

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  1             (2) identify barriers to service and gaps in service due to strict defi-
  2       nitions of boundaries between departments and agencies;
  3             (3) facilitate interagency and interdepartmental cooperation toward
  4       the common goal of serving children and families;
  5             (4) investigate and identify methodologies for the combining of funds
  6       across departmental boundaries to better serve children and families;
  7             (5) propose actions needed to achieve coordination of funding and
  8       services across departmental lines; and
  9             (6) encourage and facilitate joint planning and coordination between
10       the public and private sectors to better serve the needs of children and
11       families; and
12             (7) perform the duties and functions prescribed by section 3, and
13       amendments thereto.
14             (f) (h) Members of the advisory committee on children and families
15       Kansas children's cabinet shall not be paid compensation, but shall receive
16       subsistence allowances, mileage and other expenses as provided by K.S.A.
17       75-3223, and amendments thereto. The subsistence allowances, mileage
18       and other expenses as provided in K.S.A. 75-3223 and amendments
19       thereto shall be paid from available appropriations of the department of
20       social and rehabilitation services except that expenses of members who
21       are employed by a state agency shall be reimbursed by that state agency.
22             (i) On the effective date of this act, the advisory committee on children
23       and families is hereby abolished and all powers, duties, functions, records
24       and other property of the advisory committee on children and families
25       are hereby transferred to the Kansas children's cabinet created by this
26       section. Except as otherwise specifically provided by this act, the Kansas
27       children's cabinet shall be a continuation of the advisory committee on
28       children and families as it existed prior to the effective date of this act.
29             Sec.  9. K.S.A. 75-7021 is hereby amended to read as follows: 75-
30       7021. (a) There is hereby created in the state treasury the Kansas endow-
31       ment for youth juvenile delinquency prevention trust fund. Money cred-
32       ited to the Kansas juvenile delinquency prevention trust fund pursuant to
33       K.S.A. 20-367 and amendments thereto or by any other lawful means
34       shall be used solely for the purpose of making grants to further the pur-
35       pose of juvenile justice reform, including rational prevention programs
36       and programs for treatment and rehabilitation of juveniles and to further
37       the partnership between state and local communities. Such treatment and
38       rehabilitation programs should aim to combine accountability and sanc-
39       tions with increasingly intensive treatment and rehabilitation services with
40       an aim to provide greater public safety and provide intervention that will
41       be uniform and consistent.
42             (b) All expenditures from the Kansas endowment for youth juvenile
43       delinquency prevention trust fund shall be made in accordance with ap-

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  1       propriations acts upon warrants of the director of accounts and reports
  2       issued pursuant to vouchers approved by the commissioner of juvenile
  3       justice or by a person or persons designated by the commissioner.
  4             (c) The commissioner of juvenile justice may apply for, receive and
  5       accept money from any source for the purposes for which money in the
  6       Kansas endowment for youth juvenile delinquency prevention trust fund
  7       may be expended. Upon receipt of any such money, the commissioner
  8       shall remit the entire amount at least monthly to the state treasurer, who
  9       shall deposit it in the state treasury and credit it to the Kansas endowment
10       for youth juvenile delinquency prevention trust fund.
11             (d) Grants made to programs pursuant to this section shall be based
12       on the number of persons to be served and such other requirements as
13       may be established by the Kansas youth authority in guidelines estab-
14       lished and promulgated to regulate grants made under authority of this
15       section. The guidelines may include requirements for grant applications,
16       organizational characteristics, reporting and auditing criteria and such
17       other standards for eligibility and accountability as are deemed advisable
18       by the Kansas youth authority.
19             (e) On or before the 10th of each month, the director of accounts
20       and reports shall transfer from the state general fund to the Kansas en-
21       dowment for youth juvenile delinquency prevention trust fund interest
22       earnings based on:
23             (1) The average daily balance of moneys in the Kansas endowment
24       for youth juvenile delinquency prevention trust fund for the preceding
25       month; and
26             (2) the net earnings rate of the pooled money investment portfolio
27       for the preceding month.
28             (f) On and after the effective date of this act, the Kansas endowment
29       for youth trust fund created by this section prior to amendment by this
30       act is hereby redesignated as the Kansas juvenile delinquency prevention
31       trust fund. On and after the effective date of this act, whenever the Kansas
32       endowment for youth trust fund created by this section prior to amend-
33       ment by this act, or words of like effect, is referred to or designated by a
34       statute, contract or other document such reference or designation shall be
35       deemed to apply to the Kansas juvenile delinquency prevention trust fund. 
36       Sec.  10. K.S.A. 75-7021 and K.S.A. 1998 Supp. 20-367, 38-1808, 38-
37       1901 and 38-2008 are hereby repealed.
38        Sec.  11. This act shall take effect and be in force from and after its
39       publication in the statute book.