Topeka, KS, Wednesday, February 24, 1999, 10:00 a.m.
The House met pursuant to adjournment with Speaker pro tem Mays in the chair.
The roll was called with 125 members present.
Prayer by Chaplain Svoboda:
Gracious God,
We have heard the stories
of you leading your people with pillars of fire,
and clouds,
and stars.
We have heard of you
speaking through a burning bush,
writing words on stone,
and living on earth among us.
These days you seem so quiet.
Encourage us to seek out your guidance in our lives,
and your words for our hearts.
We ask these things for your Love's sake.
Amen.
The Pledge of Allegiance was led by Rep. Compton.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills and resolutions were referred to committees as indicated:
Appropriations: SB 139.
Economic Development: HB 2531; SB 179.
Education: SB 200, 201.
Health and Human Services: HB 2529; SB 71, 128.
Insurance: SB 151.
Judiciary: SB 81, 93, 161.
Taxation: HB 2530; HCR 5031.
Utilities: SB 186.
MESSAGE FROM THE SENATE
Announcing passage of SB 76, 79, 91, 98, 108, 132, 162, 213, 219, 229, 238, 241.
INTRODUCTION OF SENATE BILLS AND CONCURRENT RESOLUTIONS
The following Senate bills were thereupon introduced and read by title:
MOTIONS AND RESOLUTIONS OFFERED ON A PREVIOUS DAY
On motion of Rep. Larkin, HR 6010, A resolution congratulating and commending Major
General James F. Rueger, was adopted.
Rep. Schwartz addressed a few remarks to the members of the House about Major
General Rueger. Rep. Larkin recognized members of the National Guard seated in the east
gallery and introduced Major General Rueger who addressed a few remarks to the members
of the House.
CONSENT CALENDAR
No objection was made to HB 2362, 2486; HCR 5010; SB 122 appearing on the
Consent Calendar for the first day.
No objection was made to HB 2380 appearing on the Consent Calendar for the second
day.
No objection was made to HB 2320 appearing on the Consent Calendar for the third
day. The bill was advanced to Final Action on Bills and Concurrent Resolutions.
FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS HB 2071, An act relating to transportation; providing for a comprehensive transportation
program; concerning the financing thereof; amending K.S.A. 12-1,119, 68-2033, 68-2073,
68-2096, 68-2315, 68-2316, 75-5032, 75-5033, 75-5034, 75-5035, 75-5037, 75-5046, 75-
5048, 75-5053, 75-5056, 75-5061, 79-3425, 79-3425c, 79-34,104, 79-34,126, 79-34,142, 79-
34,161 and 79-34,162 and K.S.A. 1998 Supp. 68-416 and 79-34,147 and repealing the
existing sections; also repealing K.S.A. 66-231a, 66-231b, 68-402e, 68-417, 68-417a, 68-
417b, 68-2318, 79-3425d and 79-34,143 and K.S.A. 1998 Supp. 68-2314, was considered on
final action.
On roll call, the vote was: Yeas 75; Nays 50; Present but not voting: 0; Absent or not
voting: 0.
EXPLANATIONS OF VOTE
Mr. Speaker: I vote NO on HB 2071. I recognize the importance of investing in
transportation infrastructure for economic growth, and that is why I supported an
amendment which would have committed our state to spending in excess of a billion dollars
a year on highways. However, the road to the future cannot be paved by concrete and
asphalt alone. It must also be paved by investments in children and returning hard earned
dollars back to families and businesses through tax cuts. The past four years have proven
that free markets, free enterprise, and freedom of choice are the key to economic prosperity,
not taxing and spending on public works.--Tony Powell, Brenda K. Landwehr
Mr. Speaker: I vote NO on HB 2071 because we can never remain silent in the face
of economic injustice when it is clearly present.
When we can say that in our state: the poor are happy; that neither ignorance and distress
is to be found among them; that our jails are empty of prisoners; that our streets are empty
of the homeless; that the elderly are not in want; that our taxes are not oppressive; then,
and only then, can we boast of our substance and spend our abundance.--Carlos Mayans
Mr. Speaker: I support a comprehensive transportation plan, I'm concerned this plan
doesn't insure building major mod., enhancements, or improvements will be safer.
A four lane expressway from Hutchinson to Wichita was just opened. There have been
an alarming number of accidents and fatalities on this highway. Two communities along this
highway have signed petitions, held meetings, and have voiced their concerns. One school
superintendent won't allow his school buses to use one of the ``dangerous intersections.''
HB 2071 does not address safety design or review Priority Formulas.
Letters ask us to provide safe improvements for highways and intersections. HB 2071
doesn't do that. Mr. Speaker, I vote no on HB 2071.--Daniel J. Thimesch
Mr. Speaker: Kansas needs a new and responsible highway plan. We have to begin the
process somewhere. This bill is about half enough. Nevertheless it is a start. I vote ``aye'' on HB 2071.--John T. Edmonds
Mr. Speaker: I vote yes on HB 2071 not because I am satisfied with the size of the
program, because I am not and not because I agree to the financing, which I don't. I look
forward to the opportunity to vote on a truly comprehensive highway program this year,
one that is big enough to address the real needs of the state and one that contains a
reasonable mix of funding. This plan is a start and I support this first step.--Michael R.
O'Neal
Mr. Speaker: While I am supportive of the concept of a transportation plan, HB 2071
effectively thwarts the opportunity to reduce food sales tax and to provide more equitable
education funding for districts the size of Salina. I vote no.--Deena Horst
Mr. Speaker: Yesterday, the Kansas House of Representatives abdicated its
responsibility to the people of Kansas.
Each one of us was sent here by our communities to do our best to craft responsible
legislation. But that is not what happened yesterday. Instead of passing legislation that we
could be proud of, legislation that would responsibly address our state transportation needs,
we decided instead to ``let the Senate fix it.''
Mr. Chairman, that is not the job that I was sent here to do, and so I must vote no on HB 2071.--Bob Grant, Ruby Gilbert
Mr. Speaker: I support a comprehensive transportation plan because it is a responsibility
of this legislature to meet the transportation needs of this state for today and into the future.
But I cannot support a plan that ignores other needs of the future. HB 2071 sacrifices
our schools, our juvenile justice programs, our seniors programs and countless other
obligations we have to the citizens of Kansas.
I vote against HB 2071 because it is irresponsible and poorly thought out legislation, and
look forward to having the opportunity to support a balanced and responsible transportation
plan before sine die.--Bill Reardon, Dixie Toelkes, Nancy Kirk, Marti Crow,
Bonnie Sharp, Sue Storm, Laura McClure, Doug Spangler
Mr. Speaker: I believe that we have a responsibility to our state to provide transportation
systems that allow Kansans to travel safely throughout our state, encourage growth and allow
convenient distribution of goods and services.
But we also have an obligation to future generations to provide quality schools and safe
communities. This plan will not allow us to meet the needs of Kansas families and
communities, and therefore, Mr. Chairman, I must vote against HB 2071.
Instead, we can and must develop a transportation plan that is in balance with the other
needs of our state.--Jonathan Wells, Gwen Welshimer, Rick Rehorn, Broderick
Henderson, Geraldine Flaharty, Margaret E. Long, David Haley, Janice L.
Pauls, Eber Phelps
HB 2320, An act concerning port authorities; relating to the creation thereof; amending
K.S.A. 12-3402 and repealing the existing section, was considered on final action.
On roll call, the vote was: Yeas 125; Nays 0; Present but not voting: 0; Absent or not
voting: 0.
On motion of Rep. Glasscock, the House went into Committee of the Whole, with Rep.
Lane in the chair.
COMMITTEE OF THE WHOLE
On motion of Rep. Lane, Committee of the Whole report, as follows, was adopted:
Recommended that HB 2142 be passed.
Committee report to HB 2035 be adopted; and the bill be passed as amended.
Committee report to HB 2040 be adopted; also, on motion of Rep. Weiland be amended
on page 1, in line 39, by striking ``or''; in line 41, by striking the period and inserting ``; or'';
following line 41, by inserting:
``(E) any amusement ride owned and operated by a not-for-profit organization.''; and HB 2040 be passed as amended.
Committee report to HB 2106 be adopted; and the bill be passed as amended.
Committee report recommending a substitute bill to Sub. HB 2076 be adopted; also, on
motion of Rep. Alldritt be amended on page 1, in line 28, after ``month'' by inserting ``or
$5 per month, whichever is greater''; and Sub. HB 2076 be passed as amended.
Committee report to HB 2090 be adopted; and the bill be passed as amended.
HB 2050, 2161; Sub. HB 2182 be passed over and retain a place on the calendar.
Committee report to HB 2150 be adopted; and the bill be passed as amended.
Committee report to HB 2404 be adopted; and the bill be passed as amended.
Committee report to HB 2074 be adopted; also, on motion of Rep. Gilmore be amended
on page 2, in line 32, by deleting all after the word ``within'' through and including the word
``results'' on page 2, in line 33, and inserting therein the following: ``30 days of testing''; and
the bill be passed as amended.
Committee report to HB 2290 be adopted; and the bill be passed as amended.
Committee report to HB 2082 be adopted; and the bill be passed as amended.
Committee report to HB 2140 be adopted; also, on motion of Rep. Haley to amend,
Rep. Loyd requested a ruling on the amendment being germane to the bill. The Rules Chair
ruled the amendment not germane, and the bill be passed as amended.
Committee report to HB 2224 be adopted; and the bill be passed as amended.
Committee report recommending a substitute bill to Sub. HB 2124 be adopted; also, on
motion to recommend the bill favorably for passage, the motion did not prevail.
Committee report to HB 2197 be adopted; and the bill be passed as amended.
Committee report to HB 2205 be adopted; and the bill be passed as amended.
REPORTS OF STANDING COMMITTEES
The Committee on Appropriations recommends HB 2230 be passed and, because the
committee is of the opinion that the bill is of a noncontroversial nature, be placed on the
consent calendar.
The Committee on Business, Commerce and Labor recommends HB 2446 be
amended on page 1, in line 38, by striking all after the period; by striking all in lines 39 and
40; and the bill be passed as amended.
The Committee on Environment recommends HB 2146 be passed.
The Committee on Environment recommends HB 2264 be amended on page 2, after
line 9, by inserting:
``(h) ``Hazardous waste transfer facility'' means any hazardous waste transportation-
related facility, other than the location of generation or of final treatment or disposal, that,
during the course of transportation, serves as an area for the accumulation, consolidation,
distribution or transfer of hazardous waste shipments, including loading docks, parking areas,
rail spurs and other similar areas where shipments of hazardous waste are held during the
normal course of transportation. ``Hazardous waste transfer facility'' does not include
hazardous waste disposal facilities or permitted household hazardous waste facilities.'';
Also on page 2, by relettering subsections (h) through (n) as subsections (i) through (o);
On page 3, by relettering subsections (o) and (p) as subsections (p) and (q); by striking
all of lines 7 through 9;
On page 5, by striking all of lines 18 through 22; after line 22, by inserting:
``(12) Operate a hazardous waste transfer facility at which hazardous waste is transferred
from one or more containers to one or more different containers. The provisions of this
subsection shall not apply to overpacking of hazardous waste containers when the overpack
containers are marked with labels that contain all the information on the original labels.'';
and the bill be passed as amended.
The Committee on Environment recommends HB 2289 be amended on page 1, after
line 18, by inserting:
``(3) ``Science advisory panel'' means a panel of scientists, from outside the department,
appointed by the secretary to provide expert advice to the secretary on scientific and
technical issues facing the department, to assess the results of specific research efforts as
requested by the secretary and to assist in identifying emerging environmental issues.'';
Also on page 1, in line 19, by striking ``(3)'' and inserting ``(4)''; in line 27, after the last
semicolon, by inserting ``geology;''; in line 30, by striking ``or former officer or employee'';
On page 2, after line 2, by inserting:
``(e) The commission shall be attached to the department. All budgeting, purchasing
and related management functions of the commission shall be administered under the
direction of the secretary. The secretary shall provide office and meeting space and such
clerical and other staff assistance as may be necessary to assist the commission in carrying
out its powers, duties and functions under this act. All vouchers for expenditures and all
payrolls of the commission shall be approved by the chairperson of the commission or a
person designated by the chairperson and the secretary or a person designated by the
secretary. All expenses of implementing the provisions of this act shall be paid from the
general operating budget of the department and no moneys shall be appropriated specifically
for that purpose.'';
Also on page 2, by striking all of line 3; in line 4, by striking all before ``On'' and inserting
``(f)''; in line 6, after ``parks'', by inserting ``, Kansas geological survey, Kansas water office'';
by relettering subsections (f) and (g) as subsections (g) and (h)``; in line 9, after
``commission'', by inserting ``and the science advisory panel''; in line 13, after ``legislature'',
by inserting ``, the science advisory panel''; and the bill be passed as amended.
The Committee on Environment recommends HB 2490 be amended by substituting a
new bill to be designated as ``Substitute for HOUSE BILL No. 2490,'' as follows:
``Substitute for HOUSE BILL No. 2490
By Committee on Environment
AN ACT relating to certain recreational trails; concerning certain requirements relating
thereto; providing penalties for certain acts; amending K.S.A. 1998 Supp. 58-3212 and
repealing the existing section.'';
and the substitute bill be passed.
(Sub. HB 2490 was thereupon introduced and read by title.)
The Committee on Health and Human Services recommends HB 2213 be amended
on page 8, after line 30, by inserting the following:
``(c) Nothing in this section or in this act shall be construed to prohibit any licensed
professional counselor or licensed clinical professional counselor from testifying in court
hearings concerning matters of adult abuse, adoption, child abuse, child neglect, or other
matters pertaining to the welfare of children or from seeking collaboration or consultation
with professional colleagues or administrative superiors, or both, on behalf of the client.'';
On page 12, in line 8, by striking ``50'' and inserting ``75'';
On page 13, in line 34, before the period, by inserting: ``including not less than three
continuing education hours of professional ethics''; in line 38, by striking all after ``disorders'';
in line 39, by striking all before the period;
On page 15, in line 8, after ``of'' by inserting ``adult abuse,'';
On page 19, after line 40, by inserting the following:
``Sec. 20. K.S.A. 1998 Supp. 65-6410 is hereby amended to read as follows: 65-6410. (a) A person licensed under the marriage and family therapists licensure act and employees
and professional associates of the person shall not be required to disclose any information
that the person, employee or associate may have acquired in rendering marriage and family
therapy services, unless:
(a)(1) Disclosure is required by other state laws;
(b)(2) failure to disclose the information presents a clear and present danger to the
health or safety of an individual;
(c)(3) the person, employee or associate is a party defendant to a civil, criminal or
disciplinary action arising from the therapy, in which case a waiver of the privilege accorded
by this section is limited to that action;
(d)(4) the patient is a defendant in a criminal proceeding and the use of the privilege
would violate the defendant's right to a compulsory process or the right to present testimony
and witnesses in that person's behalf; and
(e)(5) a patient agrees to a waiver of the privilege accorded by this section, and in
circumstances where more than one person in a family is receiving therapy, each such family
member agrees to the waiver. Absent a waiver from each family member, a marriage and
family therapist shall not disclose information received by a family member.
(b) Nothing in this section or in this act shall be construed to prohibit any person licensed under the marriage and family therapist licensure act from testifying in court hearings concerning matters of adult abuse, adoption, child abuse, child neglect, or other matters pertaining to the welfare of children or from seeking collaboration or consultation with professional colleagues or administrative superiors, or both, on behalf of a client.'';
And by renumbering sections accordingly;
On page 21, after line 15, by inserting the following:
``Sec. 24. K.S.A. 74-5323 is hereby amended to read as follows: 74-5323. (a) The
confidential relations and communications between a licensed psychologist and the
psychologist's client are placed on the same basis as provided by law for those between an
attorney and the attorney's client. Except as provided in subsection (b), nothing in this act
shall be construed to require such privileged communications to be disclosed.
(b) Nothing in this section or in this act shall be construed to prohibit any licensed psychologist from testifying in court hearings concerning matters of adult abuse, adoption, child abuse, child neglect, or other matters pertaining to the welfare of children or from seeking collaboration or consultation with professional colleagues or administrative superiors, or both, on behalf of a client.'';
And by renumbering sections accordingly;
On page 26, after line 35, by inserting the following:
``(c) Nothing in this section or in this act shall be construed to prohibit any licensed
masters level psychologist or licensed clinical masters level psychologist from testifying in
court hearings concerning matters of adult abuse, adoption, child abuse, child neglect, or
other matters pertaining to the welfare of children or from seeking collaboration or
consultation with professional colleagues or administrative superiors, or both, on behalf of
the client.'';
Also on page 26, in line 37, by striking ``and'' where it appears for the first time and
inserting in lieu thereof a comma; also in line 37, after ``74-5318'' by inserting ``and 74-
5323''; in line 39, after ``65-6407,'' by inserting ``65-6410,''; in line 42, by striking ``January''
and inserting ``July'';
In the title, in line 11, by striking ``and'' where it appears for the first time and inserting
in lieu thereof a comma; also in line 11, after ``74-5318'' by inserting ``and 74-5323''; in line
14, after ``6407,'' by inserting ``65-6410,''; and the bill be passed as amended.
The Committee on Local Government recommends HB 2310 be passed.
The Committee on Transportation recommends HB 2317 be amended on page 1,
preceding line 14, by inserting a new section as follows:
``Section 1. K.S.A. 8-235d is hereby amended to read as follows: 8-235d. (a) Drivers'
license examiners of the division shall accept original applications for drivers' licenses and
instruction permits, as distinguished from applications for renewals of licenses, on forms
prescribed by the division and also shall issue instruction permits. Drivers' license examiners
of the division shall examine every applicant for a driver's license who is required by the
provisions of the motor vehicle drivers' license act to be examined. Such examination shall
be held in the county where the applicant resides or at a place adjacent thereto reasonably
convenient to the applicant or at a location established by the secretary for the issuance of
a commercial driver's license. Such examination shall include a test of the applicant's
eyesight, the applicant's ability to read and understand highway signs regulating, warning
and directing traffic, the applicant's knowledge of the traffic laws of this state and shall
include an actual demonstration of ability to exercise ordinary and reasonable control in the
operation of motor vehicles which the class of license applied for would entitle the applicant
to drive. At the conclusion of the examination the examiner shall issue a license to the
applicant, if the applicant has successfully passed the examination with the class of license
the applicant has applied for.
(b) In addition to the requirements of subsection (a), any person who is under the age of 18 years, who is applying for a driver's license for the first time, not including an instruction permit, shall submit a signed affidavit of either a parent or guardian, stating that the applicant has completed at least 50 hours of adult supervised driving with at least 10 of those hours being at night. The required adult supervised driving required in this subsection shall be conducted by an adult who is at least 21 years of age and is the holder of a valid commercial driver's license, class A, B or C driver's license.
Evidence of failure of any licensee who was required to complete the 50 hours of adult supervised driving under this subsection shall not be admissible in any action for the purpose of determining any aspect of comparative negligence or mitigation of damages.'';
Also on page 1, in line 14, by striking ``Section 1.'' and inserting ``Sec. 2.'';
By renumbering sections accordingly;
Also on page 1, in line 25, following ``is'' by inserting ``at least 21 years of age and is'';
On page 2, by striking all in lines 20 through 27;
On page 5, in line 41, by striking ``shall not op-''; by striking all in lines 42 and 43;
On page 6, by striking all in lines 1 through 3; in line 4, by striking all preceding the
period and inserting new material as follows: ``on and after July 1, 1999, shall provide prior
to reaching 16 years of age, a signed affidavit of either a parent or guardian, stating that the
applicant has completed at least 50 hours of adult supervised driving with at least 10 of
those hours being at night. The adult supervised driving required by this paragraph shall be
conducted by an adult who is at least 21 years of age and is the holder of a valid commercial
driver's license, class A, B or C driver's license.
Evidence of failure of any licensee who was required to complete the 50 hours of adult
supervised driving under this subsection shall not be admissible in any action for the purpose
of determining any aspect of comparative negligence or mitigation of damages'';
On page 9, in line 30, preceding ``K.S.A.'' by inserting ``K.S.A. 8-235d and'';
In the title, in line 10, following ``amending'', by inserting ``K.S.A. 8-235d and''; and the
bill be passed as amended.
Upon unanimous consent, the House referred back to the regular order of business,
Introduction of Bills and Concurrent Resolutions.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were thereupon introduced and read by title:
HB 2532, An act repealing K.S.A. 1998 Supp. 58-3211 through 58-3216, relating to
recreational trails, by Committee on Appropriations.
HB 2533, An act making and concerning appropriations for the fiscal year ending June
30, 2000, for the department of health and environment; relating to an infant and toddler
day care loan program; authorizing certain transfers and imposing certain restrictions and
limitations, and directing or authorizing certain receipts and disbursements and acts
incidental to the foregoing, by Committee on Appropriations.
On motion of Rep. Glasscock, the House recessed until 1:30 p.m.
______
Afternoon Session
The House met pursuant to recess with Speaker pro tem Mays in the chair.
On motion of Rep. Glasscock, the House went into Committee of the Whole, with Rep.
Stone in the chair.
COMMITTEE OF THE WHOLE
Recommended that HB 2209 be passed over and retain a place on the calendar.
Committee report to HB 2214 be adopted; and the bill be passed as amended.
On motion of Rep. Campbell to amend HB 2216, Rep. Sloan requested a ruling on the
amendment being germane to the bill. The Rules Chair ruled it germane, and the bill be
amended on page 1, in line 13 before ``Section'' by inserting ``New''; on page 2, after line
20, by inserting two new sections to read as follows:
``Sec. 2. K.S.A. 1998 Supp. 79-3606 is hereby amended to read as follows: 79-3606.
The following shall be exempt from the tax imposed by this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, and
amendments thereto, tires taxed pursuant to K.S.A. 1998 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-
34,150, and amendments thereto;
(b) all sales of tangible personal property or service, including the renting and leasing
of tangible personal property, purchased directly by the state of Kansas, a political
subdivision thereof, other than a school or educational institution, or purchased by a public
or private nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ
bank and used exclusively for state, political subdivision, hospital or public hospital authority
or nonprofit blood, tissue or organ bank purposes, except when: (1) Such state, hospital or
public hospital authority is engaged or proposes to engage in any business specifically taxable
under the provisions of this act and such items of tangible personal property or service are
used or proposed to be used in such business, or (2) such political subdivision is engaged
or proposes to engage in the business of furnishing gas, water, electricity or heat to others
and such items of personal property or service are used or proposed to be used in such
business;
(c) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly by a public or private elementary or
secondary school or public or private nonprofit educational institution and used primarily
by such school or institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of buildings to be
used for such purposes. The exemption herein provided shall not apply to erection,
construction, repair, enlargement or equipment of buildings used primarily for human
habitation;
(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any public or private nonprofit hospital or public
hospital authority, public or private elementary or secondary school or a public or private
nonprofit educational institution, which would be exempt from taxation under the provisions
of this act if purchased directly by such hospital or public hospital authority, school or
educational institution; and all sales of tangible personal property or services purchased by
a contractor for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any political subdivision of the
state or district described in subsection (s), the total cost of which is paid from funds of such
political subdivision or district and which would be exempt from taxation under the
provisions of this act if purchased directly by such political subdivision or district. Nothing
in this subsection or in the provisions of K.S.A. 12-3418 and amendments thereto, shall be
deemed to exempt the purchase of any construction machinery, equipment or tools used in
the constructing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for any political subdivision of the state or any such district. As used
in this subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto, ''funds of a
political subdivision`` shall mean general tax revenues, the proceeds of any bonds and gifts
or grants-in-aid. Gifts shall not mean funds used for the purpose of constructing, equipping,
reconstructing, repairing, enlarging, furnishing or remodeling facilities which are to be
leased to the donor. When any political subdivision of the state, district described in subsection (s), public or private nonprofit hospital or public hospital authority, public or
private elementary or secondary school or public or private nonprofit educational institution
shall contract for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved, and the contractor
may purchase materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are made, and such
suppliers shall execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to the political subdivision, district, hospital or public hospital authority, school or educational institution concerned a
sworn statement, on a form to be provided by the director of taxation, that all purchases so
made were entitled to exemption under this subsection. As an alternative to the foregoing
procedure, any such contracting entity may apply to the secretary of revenue for agent status
for the sole purpose of issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
If any materials purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials which will not be so incorporated
in the building or other project reported and paid by such contractor to the director of
taxation not later than the 20th day of the month following the close of the month in which
it shall be determined that such materials will not be used for the purpose for which such
certificate was issued, the political subdivision, district, hospital or public hospital authority,
school or educational institution concerned shall be liable for tax on all materials purchased
for the project, and upon payment thereof it may recover the same from the contractor
together with reasonable attorney fees. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any materials purchased under
such a certificate for any purpose other than that for which such a certificate is issued without
the payment of the sales or compensating tax otherwise imposed upon such materials, shall
be guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties
provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the
government of the United States, its agencies or instrumentalities concerned a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the foregoing
procedure, any such contracting entity may apply to the secretary of revenue for agent status
for the sole purpose of issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
Any contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose other than that
for which such a certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in subsection (g) of K.S.A.
79-3615 and amendments thereto;
(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;
(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft
repair, modification and replacement parts and sales of services employed in the
remanufacture, modification and repair of aircraft sold to persons using directly or through
an authorized agent such aircraft and aircraft repair, modification and replacement parts as
certified or licensed carriers of persons or property in interstate or foreign commerce under
authority of the laws of the United States or any foreign government or sold to any foreign
government or agency or instrumentality of such foreign government and all sales of aircraft,
aircraft parts, replacement parts and services employed in the remanufacture, modification
and repair of aircraft for use outside of the United States;
(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;
(i) the lease or rental of all films, records, tapes, or any type of sound or picture
transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of such meals to
employees of any restaurant, eating house, dining car, hotel, drugstore or other place where
meals or drinks are regularly sold to the public if such employees' duties are related to the
furnishing or sale of such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A.
8-126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the
provisions of subsection (o) of K.S.A. 79-3603 and amendments thereto;
(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer,
manufacturer or compounder may obtain from the director of taxation and furnish to the
supplier an exemption certificate number for tangible personal property for use as an
ingredient or component part of the property or services produced, manufactured or
compounded;
(n) all sales of tangible personal property which is consumed in the production,
manufacture, processing, mining, drilling, refining or compounding of tangible personal
property, the treating of by-products or wastes derived from any such production process,
the providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;
(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of
which is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments
thereto, the production of food for human consumption, the production of animal, dairy,
poultry or aquatic plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;
(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner;
(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;
(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry. For the purposes of this
subsection, the term prosthetic and orthopedic appliances means any apparatus, instrument,
device, or equipment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any disabled person in
leading a normal life by facilitating such person's mobility; such term shall include
accessories attached or to be attached to motor vehicles, but such term shall not include
motor vehicles or personal property which when installed becomes a fixture to real property;
(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, by a rural water district organized or operated under the authority of K.S.A. 82a-612, and amendments thereto, or by a water supply district organized or operating under the authority of K.S.A. 19-3501 et seq., and amendments thereto, K.S.A.
19-3522 et seq., and amendments thereto, or K.S.A. 1903545 et seq., and amendments
thereto, which property or services are used in the construction activities, operation or
maintenance of the district;
(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ``farm
machinery and equipment or aquaculture machinery and equipment'' shall include
machinery and equipment used in the operation of Christmas tree farming but shall not
include any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other
than a farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto.
Each purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;
(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;
(v) all sales of food products to any contractor for use in preparing meals for delivery
to homebound elderly persons over 60 years of age and to homebound disabled persons or
to be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;
(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ``severing'' shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;
(y) all sales of materials and services used in the repairing, servicing, altering,
maintaining, manufacturing, remanufacturing, or modification of railroad rolling stock for
use in interstate or foreign commerce under authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;
(aa) all sales of materials and services applied to equipment which is transported into
the state from without the state for repair, service, alteration, maintenance, remanufacture
or modification and which is subsequently transported outside the state for use in the
transmission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or
manufactured homes'' means sales other than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;
(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;
(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;
(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;
(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization, and all sales of tangible personal property by
or on behalf of any such organization. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;
(kk) on and after January 1, 1989, all sales of machinery and equipment used directly
and primarily for the purposes of manufacturing, assembling, processing, finishing, storing,
warehousing or distributing articles of tangible personal property in this state intended for
resale by a manufacturing or processing plant or facility or a storage, warehousing or
distribution facility, and all sales of repair and replacement parts and accessories purchased
for such machinery and equipment:
(1) For purposes of this subsection, machinery and equipment shall be deemed to be
used directly and primarily in the manufacture, assemblage, processing, finishing, storing,
warehousing or distributing of tangible personal property where such machinery and
equipment is used during a manufacturing, assembling, processing or finishing, storing,
warehousing or distributing operation:
(A) To effect a direct and immediate physical change upon the tangible personal
property;
(B) to guide or measure a direct and immediate physical change upon such property
where such function is an integral and essential part of tuning, verifying or aligning the
component parts of such property;
(C) to test or measure such property where such function is an integral part of the
production flow or function;
(D) to transport, convey or handle such property during the manufacturing, processing,
storing, warehousing or distribution operation at the plant or facility; or
(E) to place such property in the container, package or wrapping in which such property
is normally sold or transported.
(2) For purposes of this subsection ``machinery and equipment used directly and
primarily'' shall include, but not be limited to:
(A) Mechanical machines or components thereof contributing to a manufacturing,
assembling or finishing process;
(B) molds and dies that determine the physical characteristics of the finished product
or its packaging material;
(C) testing equipment to determine the quality of the finished product;
(D) computers and related peripheral equipment that directly control or measure the
manufacturing process or which are utilized for engineering of the finished product; and
(E) computers and related peripheral equipment utilized for research and development
and product design.
(3) ``Machinery and equipment used directly and primarily'' shall not include:
(A) Hand tools;
(B) machinery, equipment and tools used in maintaining and repairing any type of
machinery and equipment;
(C) transportation equipment not used in the manufacturing, assembling, processing,
furnishing, storing, warehousing or distributing process at the plant or facility;
(D) office machines and equipment including computers and related peripheral
equipment not directly and primarily used in controlling or measuring the manufacturing
process;
(E) furniture and buildings; and
(F) machinery and equipment used in administrative, accounting, sales or other such
activities of the business;
(4) for purposes of this subsection, ``repair and replacement parts and accessories''
means all parts and accessories for exempt machinery and equipment, including but not
limited to dies, jigs, molds, and patterns which are attached to exempt machinery or which
are otherwise used in production, short-lived replaceable parts that can be readily detached
from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars
and saws, and other replacement parts for production equipment, including refractory brick
and other refractory items for kiln equipment used in production operations;
(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and
conducting programs for the improvement of public health;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides,
germicides, pesticides and fungicides; and services, purchased and used for the purpose of
producing plants in order to prevent soil erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services rendered by an
advertising agency or licensed broadcast station or any member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;
(pp) all sales of drill bits and explosives actually utilized in the exploration and
production of oil or gas;
(qq) all sales of tangible personal property and services purchased by a nonprofit
museum or historical society or any combination thereof, including a nonprofit organization
which is organized for the purpose of stimulating public interest in the exploration of space
by providing educational information, exhibits and experiences, which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986;
(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;
(ss) all sales of tangible personal property and services purchased by a public
broadcasting station licensed by the federal communications commission as a
noncommercial educational television or radio station;
(tt) all sales of tangible personal property and services purchased by or on behalf of a
not-for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;
(uu) all sales of tangible personal property and services purchased by or on behalf of
any rural volunteer fire-fighting organization for use exclusively in the performance of its
duties and functions;
(vv) all sales of tangible personal property purchased by any of the following
organizations which are exempt from federal income taxation pursuant to section 501 (c)(3)
of the federal internal revenue code of 1986, for the following purposes, and all sales of any
such property by or on behalf of any such organization for any such purpose:
(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related
services to reduce disability and death from cardiovascular diseases and stroke;
(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;
(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for
persons who are mentally ill and to education, research and support for them and their
families;
(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of
eliminating diabetes through medical research, public education focusing on disease
prevention and education, patient education including information on coping with diabetes,
and professional education and training;
(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all
lung diseases through medical research, public education including information on coping
with lung diseases, professional education and training related to lung disease and other
related services to reduce the incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's Disease and Related Disorders Association,
Inc. for the purpose of providing assistance and support to persons in Kansas with
Alzheimer's disease, and their families and caregivers; and
(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such
organization.
(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 50501 (c)(3) of the federal internal revenue
code of 1986 contracted with to operate such zoo and all sales of tangible personal property
or services purchased by a contractor for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling facilities for any
nonprofit zoo which would be exempt from taxation under the provisions of this section if
purchased directly by such nonprofit zoo or the entity operating such zoo. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery,
equipment or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any nonprofit zoo. When any
nonprofit zoo shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the
state and furnish to the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such purchases are made,
and such suppliers shall execute invoices covering the same bearing the number of such
certificate. Upon completion of the project the contractor shall furnish to the nonprofit zoo
concerned a sworn statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All invoices shall be
held by the contractor for a period of five years and shall be subject to audit by the director
of taxation. If any materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials which will not be so
incorporated in the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the close of the month
in which it shall be determined that such materials will not be used for the purpose for
which such certificate was issued, the nonprofit zoo concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may recover the same
from the contractor together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments
thereto;
(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property by or on behalf of
such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air, free access radio
or television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by a religious
organization which is exempt from federal income taxation pursuant to section 501 (c)(3)
of the federal internal revenue code, and used exclusively for religious purposes; and
(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof.
Sec. 3. K.S.A. 1998 Supp. 79-3603 is hereby repealed.'';
By renumbering existing section 2 as section 4;
In the title, in line 9, by striking ``rural'' and inserting ``certain''; in line 10, before the
period, by inserting ``; exempting certain purchases thereof from sales taxation; amending
K.S.A. 1998 Supp. 79-3606 and repealing the existing section'';
Also, on motion of Rep. Horst to amend HB 2216, Rep. Tanner moved that the bill be
rereferred to Committee on Governmental Organization and Elections, which did not pre-
vail. The question then reverted back to the motion of Rep. Horst, which was withdrawn.
Also, roll call was demanded on further motion of Rep. Horst to amend HB 2216 on
page 2, after line 20, by inserting the following:
``Sec. 2. K.S.A. 1998 Supp. 79-3603 is hereby amended to read as follows: 79-3603. For
the privilege of engaging in the business of selling tangible personal property at retail in this
state or rendering or furnishing any of the services taxable under this act, there is hereby
levied and there shall be collected and paid a tax at the rate of 4.9%, except as otherwise more specifically provided, upon:
(a) The gross receipts received from the sale of tangible personal property at retail
within this state;
(b) (1) the gross receipts from intrastate telephone or telegraph services and (2) the
gross receipts received from the sale of interstate telephone or telegraph services, which
(A) originate within this state and terminate outside the state and are billed to a customer's
telephone number or account in this state; or (B) originate outside this state and terminate
within this state and are billed to a customer's telephone number or account in this state
except that the sale of interstate telephone or telegraph service does not include: (A) Any
interstate incoming or outgoing wide area telephone service or wide area transmission type
service which entitles the subscriber to make or receive an unlimited number of commu-
nications to or from persons having telephone service in a specified area which is outside
the state in which the station provided this service is located; (B) any interstate private
communications service to the persons contracting for the receipt of that service that entitles
the purchaser to exclusive or priority use of a communications channel or group of channels
between exchanges; (C) any value-added nonvoice service in which computer processing
applications are used to act on the form, content, code or protocol of the information to be
transmitted; (D) any telecommunication service to a provider of telecommunication services
which will be used to render telecommunications services, including carrier access services;
or (E) any service or transaction defined in this section among entities classified as members
of an affiliated group as provided by federal law (U.S.C. Section 1504). For the purposes
of this subsection the term gross receipts does not include purchases of telephone, telegraph
or telecommunications using a prepaid telephone calling card or pre-paid authorization
number. As used in this subsection, a pre-paid telephone calling card or pre-paid authori-
zation number means the right to exclusively make telephone calls, paid for in advance, with
the prepaid value measured in minutes or other time units, that enables the origination of
calls using an access number or authorization code or both, whether manually or electron-
ically dialed;
(c) the gross receipts from the sale or furnishing of gas, water, electricity and heat,
which sale is not otherwise exempt from taxation under the provisions of this act, and
whether furnished by municipally or privately owned utilities;
(d) the gross receipts from the sale of meals or drinks furnished at any private club,
drinking establishment, catered event, restaurant, eating house, dining car, hotel, drugstore
or other place where meals or drinks are regularly sold to the public;
(e) the gross receipts from the sale of admissions to any place providing amusement,
entertainment or recreation services including admissions to state, county, district and local
fairs, but such tax shall not be levied and collected upon the gross receipts received from
sales of admissions to any cultural and historical event which occurs triennially;
(f) the gross receipts from the operation of any coin-operated device dispensing or
providing tangible personal property, amusement or other services except laundry services,
whether automatic or manually operated;
(g) the gross receipts from the service of renting of rooms by hotels, as defined by K.S.A.
36-501 and amendments thereto, or by accommodation brokers, as defined by K.S.A. 12-
1692, and amendments thereto;
(h) the gross receipts from the service of renting or leasing of tangible personal property
except such tax shall not apply to the renting or leasing of machinery, equipment or other
personal property owned by a city and purchased from the proceeds of industrial revenue
bonds issued prior to July 1, 1973, in accordance with the provisions of K.S.A. 12-1740
through 12-1749, and amendments thereto, and any city or lessee renting or leasing such
machinery, equipment or other personal property purchased with the proceeds of such
bonds who shall have paid a tax under the provisions of this section upon sales made prior
to July 1, 1973, shall be entitled to a refund from the sales tax refund fund of all taxes paid
thereon;
(i) the gross receipts from the rendering of dry cleaning, pressing, dyeing and laundry
services except laundry services rendered through a coin-operated device whether automatic
or manually operated;
(j) the gross receipts from the rendering of the services of washing and washing and
waxing of vehicles;
(k) the gross receipts from cable, community antennae and other subscriber radio and
television services;
(l) the gross receipts received from the sales of tangible personal property to all con-
tractors, subcontractors or repairmen of materials and supplies for use by them in erecting
structures for others, or building on, or otherwise improving, altering, or repairing real or
personal property of others;
(m) the gross receipts received from fees and charges by public and private clubs, drink-
ing establishments, organizations and businesses for participation in sports, games and other
recreational activities, but such tax shall not be levied and collected upon the gross receipts
received from: (1) Fees and charges by any political subdivision, by any organization exempt
from property taxation pursuant to paragraph Ninth of K.S.A. 79-201, and amendments
thereto, or by any youth recreation organization exclusively providing services to persons 18
years of age or younger which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for participation in sports, games
and other recreational activities; and (2) entry fees and charges for participation in a special
event or tournament sanctioned by a national sporting association to which spectators are
charged an admission which is taxable pursuant to subsection (e);
(n) the gross receipts received from dues charged by public and private clubs, drinking
establishments, organizations and businesses, payment of which entitles a member to the
use of facilities for recreation or entertainment, but such tax shall not be levied and collected
upon the gross receipts received from: (1) Dues charged by any organization exempt from
property taxation pursuant to paragraphs Eighth and Ninth of K.S.A. 79-201, and amend-
ments thereto; and (2) sales of memberships in a nonprofit organization which is exempt
from federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue
code of 1986, and whose purpose is to support the operation of a nonprofit zoo;
(o) the gross receipts received from the isolated or occasional sale of motor vehicles or
trailers but not including: (1) The transfer of motor vehicles or trailers by a person to a
corporation solely in exchange for stock securities in such corporation; or (2) the transfer
of motor vehicles or trailers by one corporation to another when all of the assets of such
corporation are transferred to such other corporation; or (3) the sale of motor vehicles or
trailers which are subject to taxation pursuant to the provisions of K.S.A. 79-5101 et seq.,
and amendments thereto, by an immediate family member to another immediate family
member. For the purposes of clause (3), immediate family member means lineal ascendants
or descendants, and their spouses. In determining the base for computing the tax on such
isolated or occasional sale, the fair market value of any motor vehicle or trailer traded in by
the purchaser to the seller may be deducted from the selling price;
(p) the gross receipts received for the service of installing or applying tangible personal
property which when installed or applied is not being held for sale in the regular course of
business, and whether or not such tangible personal property when installed or applied
remains tangible personal property or becomes a part of real estate, except that no tax shall
be imposed upon the service of installing or applying tangible personal property in connec-
tion with the original construction of a building or facility, the original construction, recon-
struction, restoration, remodeling, renovation, repair or replacement of a residence or the
construction, reconstruction, restoration, replacement or repair of a bridge or highway.
For the purposes of this subsection:
(1) ``Original construction'' shall mean the first or initial construction of a new building
or facility. The term ``original construction'' shall include the addition of an entire room or
floor to any existing building or facility, the completion of any unfinished portion of any
existing building or facility and the restoration, reconstruction or replacement of a building
or facility damaged or destroyed by fire, flood, tornado, lightning, explosion or earthquake,
but such term, except with regard to a residence, shall not include replacement, remodeling,
restoration, renovation or reconstruction under any other circumstances;
(2) ``building'' shall mean only those enclosures within which individuals customarily
are employed, or which are customarily used to house machinery, equipment or other prop-
erty, and including the land improvements immediately surrounding such building;
(3) ``facility'' shall mean a mill, plant, refinery, oil or gas well, water well, feedlot or any
conveyance, transmission or distribution line of any cooperative, nonprofit, membership
corporation organized under or subject to the provisions of K.S.A. 17-4601 et seq., and
amendments thereto, or of any municipal or quasi-municipal corporation, including the land
improvements immediately surrounding such facility; and
(4) ``residence'' shall mean only those enclosures within which individuals customarily
live;
(q) the gross receipts received for the service of repairing, servicing, altering or main-
taining tangible personal property, except computer software described in subsection (s),
which when such services are rendered is not being held for sale in the regular course of
business, and whether or not any tangible personal property is transferred in connection
therewith. The tax imposed by this subsection shall be applicable to the services of repairing,
servicing, altering or maintaining an item of tangible personal property which has been and
is fastened to, connected with or built into real property;
(r) the gross receipts from fees or charges made under service or maintenance agree-
ment contracts for services, charges for the providing of which are taxable under the pro-
visions of subsection (p) or (q);
(s) the gross receipts received from the sale of computer software, and the sale of the
services of modifying, altering, updating or maintaining computer software. As used in this
subsection, ``computer software'' means information and directions loaded into a computer
which dictate different functions to be performed by the computer. Computer software
includes any canned or prewritten program which is held or existing for general or repeated
sale, even if the program was originally developed for a single end user as custom computer
software. The sale of computer software or services does not include: (1) The initial sale of
any custom computer program which is originally developed for the exclusive use of a single
end user; or (2) those services rendered in the modification of computer software when the
modification is developed exclusively for a single end user only to the extent of the modi-
fication and only to the extent that the actual amount charged for the modification is sep-
arately stated on invoices, statements and other billing documents provided to the end user.
The services of modification, alteration, updating and maintenance of computer software
shall only include the modification, alteration, updating and maintenance of computer soft-
ware taxable under this subsection whether or not the services are actually provided; and
(t) the gross receipts received for telephone answering services, including mobile phone
services, beeper services and other similar services; and
(u) the gross receipts received from the sale of prepaid telephone calling cards or pre-
paid authorization numbers and the recharge of such cards or numbers. A pre-paid tele-
phone calling card or pre-paid authorization number means the right to exclusively make
telephone calls, paid for in advance, with the prepaid value measured in minutes or other
time units, that enables the origination of calls using an access number or authorization
code or both, whether manually or electronically dialed. If the dale or recharge of such card
or number does not take place at the vendor's place of business, it shall be conclusively
determined to take place at the customer's shipping address; if there is no item shipped
then it shall be the customer's billing address.; and
(v) (1) the gross receipts received from sales of food for human consumption at the rate of: (A) 3.3% on June 1, 1999, and before June 1, 2001; and (B) 2.2% on June 1, 2001, and before June 1, 2002; (2) on and after June 1, 2002, all sales of food for human consumption are hereby exempt; and (3) as used in this subsection, ``food for human consumption'' means only that food which is eligible for purchase with food stamps issued by the United States department of agriculture pursuant to regulations in effect on January 1, 1998, regardless of whether the retailer from which the food is purchased is participating in the food stamp program. Such phrase shall not include meals prepared for immediate consumption on or off premises of the retailer.
Sec. 3. K.S.A. 1998 Supp. 79-3703 is hereby amended to read as follows: 79-3703.
There is hereby levied and there shall be collected from every person in this state a tax or
excise for the privilege of using, storing, or consuming within this state any article of tangible
personal property. Such tax shall be levied and collected in an amount equal to the consid-
eration paid by the taxpayer multiplied by the rate of 4.9%, except that the rate imposed upon sales of food for human consumption shall be identical to the rate of sales tax imposed thereon. Within a redevelopment district established pursuant to K.S.A. 1998 Supp. 74-
8921, and amendments thereto, there is hereby levied and there shall be collected and paid
an additional tax of 1% until the earlier of: (1) The date the bonds issued to finance or
refinance the redevelopment project undertaken in the district have been paid in full; or
(2) twenty years after the establishment of the redevelopment district. All property pur-
chased or leased within or without this state and subsequently used, stored or consumed in
this state shall be subject to the compensating tax if the same property or transaction would
have been subject to the Kansas retailers' sales tax had the transaction been wholly within
this state.
Sec. 4. K.S.A. 12-189a is hereby amended to read as follows: 12-189a. The following
sales shall be subject to the taxes levied and collected by all cities and counties under the
provisions of K.S.A. 12-187 et seq. and amendments thereto:
(a) All sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes to residential premises for noncommercial use by the occupant of such premises and
all sales of natural gas, electricity, heat and water delivered through mains, lines or pipes
for agricultural use;
(b) All sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;
(c) All sales of intrastate telephone and telegraph services for noncommercial use.; and
(d) all sales of food for human consumption, as defined by subsection (v) of K.S.A. 79- 3603, and amendments thereto.
Sec. 5. K.S.A. 79-2959 is hereby amended to read as follows: 79-2959. (a) There is
hereby created the local ad valorem tax reduction fund. All moneys transferred or credited
to such fund under the provisions of this act or any other law shall be apportioned and
distributed in the manner provided herein.
(b) On January 15 and on July 15 of each year, the director of accounts and reports
shall make transfers in equal amounts which in the aggregate equal 4.5% of the total retail
sales and compensating taxes credited to the state general fund pursuant to articles 36 and
37 of chapter 79 of Kansas Statutes Annotated and acts amendatory thereof and supple-
mental thereto during the preceding calendar year from the state general fund to the local
ad valorem tax reduction fund, except that: (1) The transfers on January 15 and July 15 of
each year shall be in equal amounts which in the aggregate equal 3.630% of such taxes
credited to the state general fund during the preceding calendar year; and (2) the amount
of the transfer on each such date during state fiscal year 1998 shall be equal to 101.75% of the amount transferred on the same date during state fiscal year 19972000, shall be in equal amounts which in the aggregate equal 3.671% of such taxes credited to the state general fund during the preceding calendar year; (3) the amount of the transfer on each such date during fiscal year 2001, shall be in equal amounts which in the aggregate equal 3.752% of such taxes credited to the state general fund during the preceding calendar year; (4) the amount of the transfer on each such date during fiscal year 2002, shall be in equal amounts which in the aggregate equal 3.823% of such taxes credited to the state general fund during the preceding calendar year; (5) the amount of the transfer on each such date during fiscal year 2003, shall be in equal amounts which in the aggregate equal 3.948% of such taxes credited to the state general fund during the preceding calendar year; (6) the amount of the transfer on each such date during fiscal year 2004, shall be in equal amounts which in the aggregate equal 4.11% of such taxes credited to the state general fund during the preceding calendar year; and (7) the amount of the transfer on each such date during fiscal year 2005, and all such years thereafter, shall be in equal amounts which in the aggregate equal 4.178% of such taxes credited to the state general fund during the preceding calendar year. All such
transfers are subject to reduction under K.S.A. 75-6704 and amendments thereto. All trans-
fers made in accordance with the provisions of this section shall be considered to be demand
transfers from the state general fund.
(c) The state treasurer shall apportion and pay the amounts transferred under subsection
(b) to the several county treasurers on January 15 and on July 15 in each year as follows:
(1) Sixty-five percent of the amount to be distributed shall be apportioned on the basis of
the population figures of the counties certified to the secretary of state pursuant to K.S.A.
11-201 and amendments thereto on July 1 of the preceding year; and (2) thirty-five percent
of such amount shall be apportioned on the basis of the equalized assessed tangible valua-
tions on the tax rolls of the counties on November 1 of the preceding year as certified by
the director of property valuation.
Sec. 6. K.S.A. 1998 Supp. 79-2964 is hereby amended to read as follows: 79-2964.
There is hereby created the county and city revenue sharing fund. All moneys transferred
or credited to such fund under the provisions of this act or any other law shall be allocated
and distributed in the manner provided herein. The director of accounts and reports in each
year on July 15 and December 10, shall make transfers in equal amounts which in the
aggregate equal 3.5% of the total retail sales and compensating taxes credited to the state
general fund pursuant to articles 36 and 37 of chapter 79 of the Kansas Statutes Annotated
and acts amendatory thereof and supplemental thereto during the preceding calendar year
from the state general fund to the county and city revenue sharing fund, except that: (a)
The transfers on July 15 and December 10 of each year shall be in equal amounts which in
the aggregate equal 2.823% of such taxes credited to the state general fund during the
preceding calendar year; and (b) the amount of the transfer on each such date during state
fiscal year 1999 shall be equal to 102.4% of the amount transferred on the same date during state fiscal year 19982001, shall be in equal amounts which in the aggregate equal 2.886% of such taxes credited to the state general fund during the preceding calendar year; (c) the amount of the transfer on each such date during fiscal year 2002, shall be in equal amounts which in the aggregate equal 2.949% of such taxes credited to the state general fund during the preceding calendar year; (d) the amount of the transfer on each such date during fiscal year 2003, shall be in equal amounts which in the aggregate equal 2.996% of such taxes credited to the state general fund during the preceding calendar year; (e) the amount of the transfer on each such date during fiscal year 2004, shall be in equal amounts which in the aggregate equal 3.144% of such taxes credited to the state general fund during the preceding calendar year; and (f) the amount of the transfer on each such date during fiscal year 2005, and all such years thereafter, shall be in equal amounts which in the aggregate equal 3.248% of such taxes credited to the state general fund during the preceding calendar year. All such
transfers are subject to reduction under K.S.A. 75-6704 and amendments thereto. All trans-
fers made in accordance with the provisions of this section shall be considered to be demand
transfers from the state general fund.
Sec. 7. K.S.A. 1998 Supp. 79-34,147 is hereby amended to read as follows: 79-34,147.
(a) On each January 1, April 1, July 1 and October 1, the secretary of revenue shall certify
to the director of accounts and reports the amount equal to 7.628% of the total revenues
received by the secretary from the taxes imposed under the Kansas retailers' sales tax act
and deposited in the state treasury and credited to the state general fund during the pre-
ceding three calendar months, except that: (1) The amount so certified during fiscal year 2000, shall be the amount equal to 8.2% of the total revenues received from such tax and so deposited and credited during such months; (2) the amount so certified during fiscal year 2001, shall be the amount equal to 8.3% of the total revenues received from such tax and so deposited and credited during such months; (3) the amount so certified during fiscal year 2002, shall be the amount equal to 8.726% of the total revenues received from such tax so deposited and credited during such months; (4) the amount so certified during fiscal year 2003, shall be the amount equal to 9.745% of the total revenues received from such tax so deposited and credited during such months; and (5) the amount so certified during fiscal year 2004, and all such years thereafter, shall be the amount equal to 9.932% of the total revenues received from such tax so deposited and credited during such months.
(b) Upon receipt of each certification under subsection (a), the director of accounts and
reports shall transfer from the state general fund to the state highway fund an amount equal
to the amount so certified, on each January 1, April 1, July 1 and October 1, except that the
amount of the transfer on each such date during state fiscal year 1999 shall not exceed the
amount equal to 102.4% of the amount transferred on the same date during state fiscal year
1998. All transfers made pursuant to this section are subject to reduction under K.S.A. 75-
6704, and amendments thereto.
(c) All transfers made in accordance with the provisions of this section shall be consid-
ered to be demand transfers from the state general fund.
Sec. 8. On and after April 16, 2003, K.S.A. 79-3632, 79-3634 and 79-3636 through 79-
3639 and K.S.A. 1998 Supp. 79-3633 and 79-3635 are hereby repealed.
Sec. 9. K.S.A. 12-189a and 79-2959 and K.S.A. 1998 Supp. 12-187, 12-188, 12-189, 12-
192, 79-2964, 79-34,147, 79-3603, 79-3606 and 79-3703 are hereby repealed.'';
By renumbering the existing section accordingly;
In the title, by striking all in lines 9 and 10 and inserting ``relating to sales taxation;
concerning exemptions therefrom; amending K.S.A. 12-189a and 79-2959 and K.S.A. 1998
Supp. 12-187, 12-188, 12-189, 12-192, 79-2964, 79-34,147, 79-3603, 79-3606 and 79-3703
and repealing the existing sections; also repealing K.S.A. 79-3632, 79-3634 and 79-3636
through 79-3639 and K.S.A. 1998 Supp. 79-3633 and 79-3635.;
On roll call, the vote was: Yeas 82; Nays 42; Present but not voting: 0; Absent or not
voting: 1.
Also, roll call was demanded on motion of Rep. Aurand to amend HB 2216 as amended
by Rep. Horst, by striking Section 4 of the amendment, and in Section 9 of the amendment,
by striking ``12-189a and''; also, in the title, by striking ``12-189a, and'';
On roll call, the vote was: Yeas 29; Nays 94; Present but not voting: 0; Absent or not
voting: 2.
Also, roll call was demanded on motion of Rep. Adkins to amend HB 2216 as amended
by House Committee of the Whole by motions of Representatives Campbell and Horst, as
follows: By striking all of section 2 of both amendments and inserting in lieu thereof the
following:
``Sec. 2. K.S.A. 1998 Supp. 79-3602 is hereby amended to read as follows: 79-3602. (a)
``Persons'' means any individual, firm, copartnership, joint adventure, association, corpora-
tion, estate or trust, receiver or trustee, or any group or combination acting as a unit, and
the plural as well as the singular number; and shall specifically mean any city or other
political subdivision of the state of Kansas engaging in a business or providing a service
specifically taxable under the provisions of this act.
(b) ``Director'' means the state director of taxation.
(c) ``Sale'' or ``sales'' means the exchange of tangible personal property, as well as the
sale thereof for money, and every transaction, conditional or otherwise, for a consideration,
constituting a sale, including the sale or furnishing of electrical energy, gas, water, services
or entertainment taxable under the terms of this act and including, except as provided in
the following provision, the sale of the use of tangible personal property by way of a lease,
license to use or the rental thereof regardless of the method by which the title, possession
or right to use the tangible personal property is transferred. The term ''sale`` or ''sales`` shall
not mean the sale of the use of any tangible personal property used as a dwelling by way of
a lease or rental thereof for a term of more than 28 consecutive days.
(d) ``Retailer'' means a person regularly engaged in the business of selling tangible per-
sonal property at retail or furnishing electrical energy, gas, water, services or entertainment,
and selling only to the user or consumer and not for resale.
(e) ``Retail sale'' or ``sale at retail'' means all sales made within the state of tangible
personal property or electrical energy, gas, water, services or entertainment for use or con-
sumption and not for resale.
(f) ``Tangible personal property'' means corporeal personal property. Such term shall
include;: (1) Any computer software program which is not a custom computer software
program, as described by subsection (s) of K.S.A. 79-3603, and amendments thereto; and
(2) andany prepaid telephone calling card or prepaid authorization number, or recharge of
such card or number, as described by subsection (b) of K.S.A. 79-3603, and amendments
thereto.
(g) ``Selling price'' means the total cost to the consumer exclusive of discounts allowed
and credited, but including freight and transportation charges from retailer to consumer.
(h) ``Gross receipts'' means the total selling price or the amount received as defined in
this act, in money, credits, property or other consideration valued in money from sales at
retail within this state; and embraced within the provisions of this act. The taxpayer, may
take credit in the report of gross receipts for: (1) An amount equal to the selling price of
property returned by the purchaser when the full sale price thereof, including the tax col-
lected, is refunded in cash or by credit; and (2) an amount equal to the allowance given for
the trade-in of property.
(i) ``Taxpayer'' means any person obligated to account to the director for taxes collected
under the terms of this act.
(j) ``Isolated or occasional sale'' means the nonrecurring sale of tangible personal prop-
erty, or services taxable hereunder by a person not engaged at the time of such sale in the
business of selling such property or services. Any religious organization which makes a
nonrecurring sale of tangible personal property acquired for the purpose of resale shall be
deemed to be not engaged at the time of such sale in the business of selling such property.
Such term shall include: (1) Any sale by a bank, savings and loan institution, credit union
or any finance company licensed under the provisions of the Kansas uniform consumer
credit code of tangible personal property which has been repossessed by any such entity;
and (2) any sale of tangible personal property made by an auctioneer or agent on behalf of
not more than two principals or households if such sale is nonrecurring and any such prin-
cipal or household is not engaged at the time of such sale in the business of selling tangible
personal property.
(k) ``Service'' means those services described in and taxed under the provisions of K.S.A.
79-3603 and amendments thereto.
(l) ``Ingredient or component part'' means tangible personal property which is necessary
or essential to, and which is actually used in and becomes an integral and material part of
tangible personal property or services produced, manufactured or compounded for sale by
the producer, manufacturer or compounder in its regular course of business. The following
items of tangible personal property are hereby declared to be ingredients or component
parts, but the listing of such property shall not be deemed to be exclusive nor shall such
listing be construed to be a restriction upon, or an indication of, the type or types of property
to be included within the definition of ``ingredient or component part'' as herein set forth:
(1) Containers, labels and shipping cases used in the distribution of property produced,
manufactured or compounded for sale which are not to be returned to the producer, man-
ufacturer or compounder for reuse.
(2) Containers, labels, shipping cases, paper bags, drinking straws, paper plates, paper
cups, twine and wrapping paper used in the distribution and sale of property taxable under
the provisions of this act by wholesalers and retailers and which is not to be returned to
such wholesaler or retailer for reuse.
(3) Seeds and seedlings for the production of plants and plant products produced for
resale.
(4) Paper and ink used in the publication of newspapers.
(5) Fertilizer used in the production of plants and plant products produced for resale.
(6) Feed for animals, fowl and aquatic plants and animals, the primary purpose of which
is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments thereto,
the production of food for human consumption, the production of animal, dairy, poultry or
aquatic plant and animal products, fiber, fur, or the production of offspring for use for any
such purpose or purposes.
(m) ``Property which is consumed'' means tangible personal property which is essential
or necessary to and which is used in the actual process of and immediately consumed, depleted or dissipated within one year in (1) the production, manufacture, processing, min-
ing, drilling, refining or compounding of tangible personal property, (2) the providing of
services or, (3) the irrigation of crops, for sale in the regular course of business, or (4) the storage or processing of grain by a public grain warehouse or other commercial grain storage facility, and which is not reusable for such purpose. The following items of tangible personal property are hereby declared to be ``consumed'' but the listing of such property shall not be deemed to be exclusive nor shall such listing be construed to be a restriction upon or an indication of, the type or types of property to be included within the definition of ``property which is consumed'' as herein set forthis a listing of tangible personal property, included by way of illustration but not of limitation, which qualifies as property which is consumed:
(A) Insecticides, herbicides, germicides, pesticides, fungicides, fumigants, antibiotics,
biologicals, pharmaceuticals, vitamins and chemicals for use in commercial or agricultural
production, processing or storage of fruit, vegetables, feeds, seeds, grains, animals or animal
products whether fed, injected, applied, combined with or otherwise used; and
(B) electricity, gas and water; and
(C) petroleum products, lubricants, chemicals, solvents, reagents and catalysts.
(n) ``Political subdivision'' means any municipality, agency or subdivision of the state
which is, or shall hereafter be, authorized to levy taxes upon tangible property within the
state or which certifies a levy to a municipality, agency or subdivision of the state which is,
or shall hereafter be, authorized to levy taxes upon tangible property within the state. Such
term also shall include any public building commission, housing, airport, port, metropolitan
transit or similar authority established pursuant to law.
(o) ``Municipal corporation'' means any city incorporated under the laws of Kansas.
(p) ``Quasi-municipal corporation'' means any county, township, school district, drainage
district or any other governmental subdivision in the state of Kansas having authority to
receive or hold moneys or funds.
(q) ``Nonprofit blood bank'' means any nonprofit place, organization, institution or es-
tablishment that is operated wholly or in part for the purpose of obtaining, storing, proc-
essing, preparing for transfusing, furnishing, donating or distributing human blood or parts
or fractions of single blood units or products derived from single blood units, whether or
not any remuneration is paid therefor, or whether such procedures are done for direct
therapeutic use or for storage for future use of such products.
(r) ``Contractor, subcontractor or repairman'' means a person who agrees to furnish and
install tangible personal property or install tangible personal property at a specified price.
A person who maintains an inventory of tangible personal property which enables such
person to furnish and install the tangible personal property or install the tangible personal
property shall not be deemed a contractor, subcontractor or repairman but shall be deemed
a retailer.
(s) ``Educational institution'' means any nonprofit school, college and university that
offers education at a level above the twelfth grade, and conducts regular classes and courses
of study required for accreditation by, or membership in, the North Central Association of
Colleges and Schools, the state board of education, or that otherwise qualify as an ''edu-
cational institution,`` as defined by K.S.A. 74-50,103, and amendments thereto. Such phrase
shall include: (1) A group of educational institutions that operates exclusively for an edu-
cational purpose; (2) nonprofit endowment associations and foundations organized and op-
erated exclusively to receive, hold, invest and administer moneys and property as a per-
manent fund for the support and sole benefit of an educational institution; (3) nonprofit
trusts, foundations and other entities organized and operated principally to hold and own
receipts from intercollegiate sporting events and to disburse such receipts, as well as grants
and gifts, in the interest of collegiate and intercollegiate athletic programs for the support
and sole benefit of an educational institution; and (4) nonprofit trusts, foundations and other
entities organized and operated for the primary purpose of encouraging, fostering and con-
ducting scholarly investigations and industrial and other types of research for the support
and sole benefit of an educational institution.
Sec. 3. K.S.A. 1998 Supp. 79-3603 is hereby amended to read as follows: 79-3603. For
the privilege of engaging in the business of selling tangible personal property at retail in this
state or rendering or furnishing any of the services taxable under this act, there is hereby
levied and there shall be collected and paid a tax at the rate of 4.9%, except as otherwise more specifically provided, upon:
(a) The gross receipts received from the sale of tangible personal property at retail
within this state;
(b) (1) the gross receipts from intrastate telephone or telegraph services and (2) the
gross receipts received from the sale of interstate telephone or telegraph services, which
(A) originate within this state and terminate outside the state and are billed to a customer's
telephone number or account in this state; or (B) originate outside this state and terminate
within this state and are billed to a customer's telephone number or account in this state
except that the sale of interstate telephone or telegraph service does not include: (A) Any
interstate incoming or outgoing wide area telephone service or wide area transmission type
service which entitles the subscriber to make or receive an unlimited number of commu-
nications to or from persons having telephone service in a specified area which is outside
the state in which the station provided this service is located; (B) any interstate private
communications service to the persons contracting for the receipt of that service that entitles
the purchaser to exclusive or priority use of a communications channel or group of channels
between exchanges; (C) any value-added nonvoice service in which computer processing
applications are used to act on the form, content, code or protocol of the information to be
transmitted; (D) any telecommunication service to a provider of telecommunication services
which will be used to render telecommunications services, including carrier access services;
or (E) any service or transaction defined in this section among entities classified as members
of an affiliated group as provided by federal law (U.S.C. Section 1504). For the purposes
of this subsection the term gross receipts does not include purchases of telephone, telegraph
or telecommunications using a prepaid telephone calling card or pre-paid authorization
number. As used in this subsection, a pre-paid telephone calling card or pre-paid authori-
zation number means the right to exclusively make telephone calls, paid for in advance, with
the prepaid value measured in minutes or other time units, that enables the origination of
calls using an access number or authorization code or both, whether manually or electron-
ically dialed;
(c) the gross receipts from the sale or furnishing of gas, water, electricity and heat,
which sale is not otherwise exempt from taxation under the provisions of this act, and
whether furnished by municipally or privately owned utilities;
(d) the gross receipts from the sale of meals or drinks furnished at any private club,
drinking establishment, catered event, restaurant, eating house, dining car, hotel, drugstore
or other place where meals or drinks are regularly sold to the public;
(e) the gross receipts from the sale of admissions to any place providing amusement,
entertainment or recreation services including admissions to state, county, district and local
fairs, but such tax shall not be levied and collected upon the gross receipts received from
sales of admissions to any cultural and historical event which occurs triennially;
(f) the gross receipts from the operation of any coin-operated device dispensing or
providing tangible personal property, amusement or other services except laundry services,
whether automatic or manually operated;
(g) the gross receipts from the service of renting of rooms by hotels, as defined by K.S.A.
36-501 and amendments thereto, or by accommodation brokers, as defined by K.S.A. 12-
1692, and amendments thereto;
(h) the gross receipts from the service of renting or leasing of tangible personal property
except such tax shall not apply to the renting or leasing of machinery, equipment or other
personal property owned by a city and purchased from the proceeds of industrial revenue
bonds issued prior to July 1, 1973, in accordance with the provisions of K.S.A. 12-1740
through 12-1749, and amendments thereto, and any city or lessee renting or leasing such
machinery, equipment or other personal property purchased with the proceeds of such
bonds who shall have paid a tax under the provisions of this section upon sales made prior
to July 1, 1973, shall be entitled to a refund from the sales tax refund fund of all taxes paid
thereon;
(i) the gross receipts from the rendering of dry cleaning, pressing, dyeing and laundry
services except laundry services rendered through a coin-operated device whether automatic
or manually operated;
(j) the gross receipts from the rendering of the services of washing and washing and
waxing of vehicles;
(k) the gross receipts from cable, community antennae and other subscriber radio and
television services;
(l) the gross receipts received from the sales of tangible personal property to all con-
tractors, subcontractors or repairmen of materials and supplies for use by them in erecting
structures for others, or building on, or otherwise improving, altering, or repairing real or
personal property of others;
(m) the gross receipts received from fees and charges by public and private clubs, drink-
ing establishments, organizations and businesses for participation in sports, games and other
recreational activities, but such tax shall not be levied and collected upon the gross receipts
received from: (1) Fees and charges by any political subdivision, by any organization exempt
from property taxation pursuant to paragraph Ninth of K.S.A. 79-201, and amendments
thereto, or by any youth recreation organization exclusively providing services to persons 18
years of age or younger which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for participation in sports, games
and other recreational activities; and (2) entry fees and charges for participation in a special
event or tournament sanctioned by a national sporting association to which spectators are
charged an admission which is taxable pursuant to subsection (e);
(n) the gross receipts received from dues charged by public and private clubs, drinking
establishments, organizations and businesses, payment of which entitles a member to the
use of facilities for recreation or entertainment, but such tax shall not be levied and collected
upon the gross receipts received from: (1) Dues charged by any organization exempt from
property taxation pursuant to paragraphs Eighth and Ninth of K.S.A. 79-201, and amend-
ments thereto; and (2) sales of memberships in a nonprofit organization which is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue
code of 1986, and whose purpose is to support the operation of a nonprofit zoo;
(o) the gross receipts received from the isolated or occasional sale of motor vehicles or
trailers but not including: (1) The transfer of motor vehicles or trailers by a person to a
corporation solely in exchange for stock securities in such corporation; or (2) the transfer
of motor vehicles or trailers by one corporation to another when all of the assets of such
corporation are transferred to such other corporation; or (3) the sale of motor vehicles or
trailers which are subject to taxation pursuant to the provisions of K.S.A. 79-5101 et seq.,
and amendments thereto, by an immediate family member to another immediate family
member. For the purposes of clause (3), immediate family member means lineal ascendants
or descendants, and their spouses. In determining the base for computing the tax on such
isolated or occasional sale, the fair market value of any motor vehicle or trailer traded in by
the purchaser to the seller may be deducted from the selling price;
(p) the gross receipts received for the service of installing or applying tangible personal
property which when installed or applied is not being held for sale in the regular course of
business, and whether or not such tangible personal property when installed or applied
remains tangible personal property or becomes a part of real estate, except that no tax shall
be imposed upon the service of installing or applying tangible personal property in connec-
tion with the original construction of a building or facility, the original construction, recon-
struction, restoration, remodeling, renovation, repair or replacement of a residencebuilding or facility or the construction, reconstruction, restoration, replacement or repair of a bridge
or highway.
For the purposes of this subsection:
(1) ``Original construction'' shall mean the first or initial construction of a new building or facility. The term ``original construction'' shall include the addition of an entire room or floor to any existing building or facility, the completion of any unfinished portion of any existing building or facility and the restoration, reconstruction or replacement of a building or facility damaged or destroyed by fire, flood, tornado, lightning, explosion or earthquake, but such term, except with regard to a residence, shall not include replacement, remodeling, restoration, renovation or reconstruction under any other circumstances;
(2) ``Building'' shall mean only those enclosures within which individuals customarily live or are employed, or which are customarily used to house machinery, equipment or other
property, and including the land improvements immediately surrounding such building; and
(3)(2) ``facility'' shall mean a mill, plant, refinery, oil or gas well, water well, feedlot or
any conveyance, transmission or distribution line of any cooperative, nonprofit, membership
corporation organized under or subject to the provisions of K.S.A. 17-4601 et seq., and
amendments thereto, or of any municipal or quasi-municipal corporation, including the land
improvements immediately surrounding such facility; and
(4) ``residence'' shall mean only those enclosures within which individuals customarily live;
(q) the gross receipts received for the service of repairing, servicing, altering or main-
taining tangible personal property, except computer software described in subsection (s),
which when such services are rendered is not being held for sale in the regular course of
business, and whether or not any tangible personal property is transferred in connection
therewith. The tax imposed by this subsection shall be applicable to the services of repairing,
servicing, altering or maintaining an item of tangible personal property which has been and
is fastened to, connected with or built into real property;
(r) the gross receipts from fees or charges made under service or maintenance agree-
ment contracts for services, charges for the providing of which are taxable under the pro-
visions of subsection (p) or (q);
(s) the gross receipts received from the sale of computer software, and the sale of the
services of modifying, altering, updating or maintaining computer software. As used in this
subsection, ''computer software`` means information and directions loaded into a computer
which dictate different functions to be performed by the computer. Computer software
includes any canned or prewritten program which is held or existing for general or repeated
sale, even if the program was originally developed for a single end user as custom computer
software. The sale of computer software or services does not include: (1) The initial sale of
any custom computer program which is originally developed for the exclusive use of a single
end user; or (2) those services rendered in the modification of computer software when the
modification is developed exclusively for a single end user only to the extent of the modi-
fication and only to the extent that the actual amount charged for the modification is sep-
arately stated on invoices, statements and other billing documents provided to the end user.
The services of modification, alteration, updating and maintenance of computer software
shall only include the modification, alteration, updating and maintenance of computer soft-
ware taxable under this subsection whether or not the services are actually provided; and
(t) the gross receipts received for telephone answering services, including mobile phone
services, beeper services and other similar services; and
(u) the gross receipts received from the sale of prepaid telephone calling cards or pre-
paid authorization numbers and the recharge of such cards or numbers. A pre-paid tele-
phone calling card or pre-paid authorization number means the right to exclusively make
telephone calls, paid for in advance, with the prepaid value measured in minutes or other
time units, that enables the origination of calls using an access number or authorization
code or both, whether manually or electronically dialed. If the dale or recharge of such card
or number does not take place at the vendor's place of business, it shall be conclusively
determined to take place at the customer's shipping address; if there is no item shipped
then it shall be the customer's billing address.; and
(v) (1) the gross receipts received from sales of food for human consumption at the rate of: (A) 3.3% on June 1, 1999, and before June 1, 2001; and (B) 2.2% on June 1, 2001, and before June 1, 2002; (2) on and after June 1, 2002, all sales of food for human consumption are hereby exempt; and (3) as used in this subsection, ''food for human consumption`` means only that food which is eligible for purchase with food stamps issued by the United States department of agriculture pursuant to regulations in effect on January 1, 1998, regardless of whether the retailer from which the food is purchased is participating in the food stamp program. Such phrase shall not include meals prepared for immediate consumption on or off premises of the retailer.
Sec. 4. K.S.A. 1998 Supp. 79-3606 is hereby amended to read as follows: 79-3606. The
following shall be exempt from the tax imposed by this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, and amend-
ments thereto, tires taxed pursuant to K.S.A. 1998 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-
34,150, and amendments thereto;
(b) all sales of tangible personal property or service, including the renting and leasing
of tangible personal property, purchased directly by the state of Kansas, a political subdi-
vision thereof, other than a school or educational institution, or purchased by a public or
private nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ
bank and used exclusively for state, political subdivision, hospital or public hospital authority
or nonprofit blood, tissue or organ bank purposes, except when: (1) Such state, hospital or
public hospital authority is engaged or proposes to engage in any business specifically taxable
under the provisions of this act and such items of tangible personal property or service are
used or proposed to be used in such business, or (2) such political subdivision is engaged
or proposes to engage in the business of furnishing gas, water, electricity or heat to others
and such items of personal property or service are used or proposed to be used in such
business;
(c) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly by a public or private elementary or sec-
ondary school or public or private nonprofit educational institution and used primarily by
such school or institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of buildings to be
used for such purposes. The exemption herein provided shall not apply to erection, con-
struction, repair, enlargement or equipment of buildings used primarily for human
habitation;
(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any public or private nonprofit hospital or public hospital
authority, public or private elementary or secondary school or a public or private nonprofit
educational institution, which would be exempt from taxation under the provisions of this
act if purchased directly by such hospital or public hospital authority, school or educational
institution; and all sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any political subdivision of the state or district de- scribed in subsection (s), the total cost of which is paid from funds of such political subdi-
vision or district and which would be exempt from taxation under the provisions of this act
if purchased directly by such political subdivision or district. Nothing in this subsection or
in the provisions of K.S.A. 12-3418 and amendments thereto, shall be deemed to exempt
the purchase of any construction machinery, equipment or tools used in the constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling fa-
cilities for any political subdivision of the state or any such district. As used in this subsection,
K.S.A. 12-3418 and 79-3640, and amendments thereto, ''funds of a political subdivision``
shall mean general tax revenues, the proceeds of any bonds and gifts or grants-in-aid. Gifts
shall not mean funds used for the purpose of constructing, equipping, reconstructing, re-
pairing, enlarging, furnishing or remodeling facilities which are to be leased to the donor.
When any political subdivision of the state district described in subsection (s), public or
private nonprofit hospital or public hospital authority, public or private elementary or sec-
ondary school or public or private nonprofit educational institution shall contract for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities, it shall obtain from the state and furnish to the contractor
an exemption certificate for the project involved, and the contractor may purchase materials
for incorporation in such project. The contractor shall furnish the number of such certificate
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the political subdivision, district, hospital or public
hospital authority, school or educational institution concerned a sworn statement, on a form
to be provided by the director of taxation, that all purchases so made were entitled to
exemption under this subsection. As an alternative to the foregoing procedure, any such
contracting entity may apply to the secretary of revenue for agent status for the sole purpose
of issuing and furnishing project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary establishing conditions and standards for the granting
and maintaining of such status. All invoices shall be held by the contractor for a period of
five years and shall be subject to audit by the director of taxation. If any materials purchased
under such a certificate are found not to have been incorporated in the building or other
project or not to have been returned for credit or the sales or compensating tax otherwise
imposed upon such materials which will not be so incorporated in the building or other
project reported and paid by such contractor to the director of taxation not later than the
20th day of the month following the close of the month in which it shall be determined that
such materials will not be used for the purpose for which such certificate was issued, the
political subdivision, district, hospital or public hospital authority, school or educational
institution concerned shall be liable for tax on all materials purchased for the project, and
upon payment thereof it may recover the same from the contractor together with reasonable
attorney fees. Any contractor or any agent, employee or subcontractor thereof, who shall
use or otherwise dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615, and amendments thereto;
(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the govern-
ment of the United States, its agencies or instrumentalities concerned a sworn statement,
on a form to be provided by the director of taxation, that all purchases so made were entitled
to exemption under this subsection. As an alternative to the foregoing procedure, any such
contracting entity may apply to the secretary of revenue for agent status for the sole purpose
of issuing and furnishing project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary establishing conditions and standards for the granting
and maintaining of such status. All invoices shall be held by the contractor for a period of
five years and shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise dispose of any ma-
terials purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615 and amendments
thereto;
(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;
(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft
repair, modification and replacement parts and sales of services employed in the remanu-
facture, modification and repair of aircraft sold to persons using directly or through an
authorized agent such aircraft and aircraft repair, modification and replacement parts as
certified or licensed carriers of persons or property in interstate or foreign commerce under
authority of the laws of the United States or any foreign government or sold to any foreign
government or agency or instrumentality of such foreign government and all sales of aircraft,
aircraft parts, replacement parts and services employed in the remanufacture, modification
and repair of aircraft for use outside of the United States;
(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;
(i) the lease or rental of all films, records, tapes, or any type of sound or picture tran-
scriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of such meals to em-
ployees of any restaurant, eating house, dining car, hotel, drugstore or other place where
meals or drinks are regularly sold to the public if such employees' duties are related to the
furnishing or sale of such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A.
8-126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the pro-
visions of subsection (o) of K.S.A. 79-3603 and amendments thereto;
(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer, manu-
facturer or compounder may obtain from the director of taxation and furnish to the supplier
an exemption certificate number for tangible personal property for use as an ingredient or
component part of the property or services produced, manufactured or compounded;
(n) all sales of tangible personal property which is consumed in the production, man-
ufacture, processing, mining, drilling, refining or compounding of tangible personal prop-
erty, the treating of by-products or wastes derived from any such production process, the
providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;
(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of
which is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments
thereto, the production of food for human consumption, the production of animal, dairy,
poultry or aquatic plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;
(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner;
(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;
(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry, all sales of repair and replace- ment parts therefor and all sales of services performed in the installation, maintenance or repair thereof. For the purposes of this subsection, the term prosthetic and orthopedic
appliances means any apparatus, instrument, device, or equipment used to replace or sub-
stitute for any missing part of the body; used to alleviate the malfunction of any part of the
body; or used to assist any disabled person in leading a normal life by facilitating such
person's mobility; such term shall include accessories attached or to be attached to motor
vehicles, but such term shall not include motor vehicles or personal property which when
installed becomes a fixture to real property;
(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, by a rural water district organized or operated under the authority of K.S.A. 82a-612, and amendments thereto, or by a water supply district organized or operating under the authority of K.S.A. 19-3501 et seq., and amendments thereto, K.S.A.
19-3522 et seq., and amendments thereto or K.S.A. 19-3545 et seq., and amendments
thereto, which property or services are used in the construction activities, operation or
maintenance of the district;
(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ''farm
machinery and equipment or aquaculture machinery and equipment`` shall include machin-
ery and equipment used in the operation of Christmas tree farming but shall not include
any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a
farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto. Each
purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;
(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;
(v) all sales of food products to any contractor for use in preparing meals for delivery
to homebound elderly persons over 60 years of age and to homebound disabled persons or
to be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;
(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ''severing`` shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;
(y) all sales of materials and services used in the repairing, servicing, altering, maintain-
ing, manufacturing, remanufacturing, or modification of railroad rolling stock for use in
interstate or foreign commerce under authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;
(aa) all sales of materials and services applied to equipment which is transported into
the state from without the state for repair, service, alteration, maintenance, remanufacture
or modification and which is subsequently transported outside the state for use in the trans-
mission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or man-
ufactured homes'' means sales other than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;
(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;
(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;
(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;
(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization, and all sales of tangible personal property by
or on behalf of any such organization, and all sales of tangible personal property by or on behalf of any other nonprofit organization the proceeds of which are solely expended for the provision or sponsorship of youth development programs and activities. This exemption shall
not apply to tangible personal property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;
(kk) on and after January 1, 1989, all sales of machinery and equipment used directly and primarily for the purposes of manufacturing, assembling, processing, finishing, storing, warehousing or distributing articles of tangible personal property in this state intended for resale by a manufacturing or processing plant or facility or a storage, warehousing or dis- tribution facility, and all sales of repair and replacement parts and accessories purchased for such machinery and equipment:
(1) For purposes of this subsection, machinery and equipment shall be deemed to be used directly and primarily in the manufacture, assemblage, processing, finishing, storing, warehousing or distributing of tangible personal property where such machinery and equip- ment is used during a manufacturing, assembling, processing or finishing, storing, ware- housing or distributing operation:
(A) To effect a direct and immediate physical change upon the tangible personal property;
(B) to guide or measure a direct and immediate physical change upon such property where such function is an integral and essential part of tuning, verifying or aligning the component parts of such property;
(C) to test or measure such property where such function is an integral part of the production flow or function;
(D) to transport, convey or handle such property during the manufacturing, processing, storing, warehousing or distribution operation at the plant or facility; or
(E) to place such property in the container, package or wrapping in which such property is normally sold or transported.
(2) For purposes of this subsection ``machinery and equipment used directly and pri- marily'' shall include, but not be limited to:
(A) Mechanical machines or components thereof contributing to a manufacturing, as- sembling or finishing process;
(B) molds and dies that determine the physical characteristics of the finished product or its packaging material;
(C) testing equipment to determine the quality of the finished product;
(D) computers and related peripheral equipment that directly control or measure the manufacturing process or which are utilized for engineering of the finished product; and
(E) computers and related peripheral equipment utilized for research and development and product design.
(3) ``Machinery and equipment used directly and primarily'' shall not include:
(A) Hand tools;
(B) machinery, equipment and tools used in maintaining and repairing any type of ma- chinery and equipment;
(C) transportation equipment not used in the manufacturing, assembling, processing, furnishing, storing, warehousing or distributing process at the plant or facility;
(D) office machines and equipment including computers and related peripheral equip- ment not directly and primarily used in controlling or measuring the manufacturing process;
(E) furniture and buildings; and
(F) machinery and equipment used in administrative, accounting, sales or other such activities of the business;
(4) for purposes of this subsection, ``repair and replacement parts and accessories'' means all parts and accessories for exempt machinery and equipment, including but not limited to dies, jigs, molds, and patterns which are attached to exempt machinery or which are otherwise used in production, short-lived replaceable parts that can be readily detached from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars and saws, and other replacement parts for production equipment, including refractory brick and other refractory items for kiln equipment used in production operations;
(1) (A) all sales of machinery and equipment which are used in this state as an integral or essential part of an integrated production operation by a manufacturing or processing plant or facility;
(B) all sales of installation, repair and maintenance services performed on such machin- ery and equipment; and
(C) all sales of repair and replacement parts and accessories purchased for such ma- chinery and equipment.
(2) For purposes of this subsection:
(A) ``Integrated production operation'' means an integrated series of operations engaged in at a manufacturing or processing plant or facility to process, transform or convert tangible personal property by physical, chemical or other means into a different form, composition or character from that in which it originally existed. Integrated production operations shall include: (i) Production line operations, including packaging operations; (ii) preproduction operations to handle, store and treat raw materials; (iii) post production handling, storage, warehousing and distribution operations; and (iv) waste, pollution and environmental con- trol operations, if any;
(B) ``production line'' means the assemblage of machinery and equipment at a manu- facturing or processing plant or facility where the actual transformation or processing of tangible personal property occurs;
(C) ``manufacturing or processing plant or facility'' means a single, fixed location owned or controlled by a manufacturing or processing business that consists of one or more struc- tures or buildings in a contiguous area where integrated production operations are conducted to manufacture or process tangible personal property to be ultimately sold at retail. A busi- ness may operate one or more manufacturing or processing plants or facilities at different locations to manufacture or process a single product of tangible personal property to be ultimately sold at retail;
(D) ``manufacturing or processing business'' means a business that utilizes an integrated production operation to manufacture, process, fabricate, finish, or assemble items for whole- sale and retail distribution as part of what is commonly regarded by the general public as an industrial manufacturing or processing operation or an agricultural commodity process- ing operation. (i) Industrial manufacturing or processing operations include, by way of illustration but not of limitation, the fabrication of automobiles, airplanes, machinery or transportation equipment, the fabrication of metal, plastic, wood, or paper products, elec- tricity power generation, water treatment, petroleum refining, chemical production, whole- sale bottling, newspaper printing, ready mixed concrete production, and the remanufactur- ing of used parts for wholesale or retail sale. Such processing operations shall include operations at an oil well, gas well, mine or other excavation site where the oil, gas, minerals, coal, clay, stone, sand or gravel that has been extracted from the earth is cleaned, separated, crushed, ground, milled, screened, washed, or otherwise treated or prepared before its trans- mission to a refinery or before any other wholesale or retail distribution. (ii) Agricultural commodity processing operations include, by way of illustration but not of limitation, meat packing, poultry slaughtering and dressing, processing and packaging farm and dairy prod- ucts in sealed containers for wholesale and retail distribution, feed grinding, grain milling, frozen food processing, and grain handling, cleaning, blending, fumigation, drying and aer- ation operations engaged in by grain elevators or other grain storage facilities. (iii) Manu- facturing or processing businesses do not include, by way of illustration but not of limitation, nonindustrial businesses whose operations are primarily retail and that produce or process tangible personal property as an incidental part of conducting the retail business, such as retailers who bake, cook or prepare food products in the regular course of their retail trade, grocery stores, meat lockers and meat markets that butcher or dress livestock or poultry in the regular course of their retail trade, contractors who alter, service, repair or improve real property, and retail businesses that clean, service or refurbish and repair tangible personal property for its owner;
(E) ``repair and replacement parts and accessories'' means all parts and accessories for exempt machinery and equipment, including, but not limited to, dies, jigs, molds, patterns and safety devices that are attached to exempt machinery or that are otherwise used in production, and parts and accessories that require periodic replacement such as belts, drill bits, grinding wheels, grinding balls, cutting bars, saws, refractory brick and other refractory items for exempt kiln equipment used in production operations;
(F) ``primary'' or ``primarily'' mean more than 50% of the time.
(3) For purposes of this subsection, machinery and equipment shall be deemed to be used as an integral or essential part of an integrated production operation when used:
(A) To receive, transport, convey, handle, treat or store raw materials in preparation of its placement on the production line;
(B) to transport, convey, handle or store the property undergoing manufacturing or processing at any point from the beginning of the production line through any warehousing or distribution operation of the final product that occurs at the plant or facility;
(C) to act upon, effect, promote or otherwise facilitate a physical change to the property undergoing manufacturing or processing;
(D) to guide, control or direct the movement of property undergoing manufacturing or processing;
(E) to test or measure raw materials, the property undergoing manufacturing or proc- essing or the finished product, as a necessary part of the manufacturer's integrated produc- tion operations;
(F) to plan, manage, control or record the receipt and flow of inventories of raw mate- rials, consumables and component parts, the flow of the property undergoing manufacturing or processing and the management of inventories of the finished product;
(G) to produce energy for, lubricate, control the operating of or otherwise enable the functioning of other production machinery and equipment and the continuation of produc- tion operations;
(H) to package the property being manufactured or processed in a container or wrapping in which such property is normally sold or transported;
(I) to transmit or transport electricity, coke, gas, water, steam or similar substances used in production operations from the point of generation, if produced by the manufacturer or processor at the plant site, to that manufacturer's production operation; or, if purchased or delivered from offsite, from the point where the substance enters the site of the plant or facility to that manufacturer's production operations;
(J) to cool, heat, filter, refine or otherwise treat water, steam, acid, oil, solvents or other substances that are used in production operations;
(K) to provide and control an environment required to maintain certain levels of air quality, humidity or temperature in special and limited areas of the plant or facility, where such regulation of temperature or humidity is part of and essential to the production process;
(L) to treat, transport or store waste or other byproducts of production operations at the plant or facility; or
(M) to control pollution at the plant or facility where the pollution is produced by the manufacturing or processing operation.
(4) The following machinery, equipment and materials shall be deemed to be exempt even though it may not otherwise qualify as machinery and equipment used as an integral or essential part of an integrated production operation: (A) Computers and related peripheral equipment that are utilized by a manufacturing or processing business for engineering of the finished product or for research and development or product design; (B) machinery and equipment that is utilized by a manufacturing or processing business to manufacture or rebuild tangible personal property that is used in manufacturing or processing operations, including tools, dies, molds, forms and other parts of qualifying machinery and equipment; (C) oil and gas drilling services and supplies, and drilling, pumping and monitoring equip- ment, used at a well site or in oil and gas exploration; (D) portable plants for aggregate, concrete, bulk cement and asphalt; (E) industrial fixtures, devices, support facilities and special foundations necessary for manufacturing and production operations, and materials and other tangible personal property sold for the purpose of fabricating such fixtures, de- vices, facilities and foundations. An exemption certificate for such purchases shall be signed by the manufacturer or processor. If the fabricator purchases such material, the fabricator shall also sign the exemption certificate; and (F) a manufacturing or processing business' laboratory equipment that is not located at the plant or facility, but that would otherwise qualify for exemption under subsection (3)(E).
(5) ``Machinery and equipment used as an integral or essential part of an integrated production operation'' shall not include:
(A) Machinery and equipment used for nonproduction purposes, including, but not lim- ited to, machinery and equipment used for plant security, fire prevention, first aid, account- ing, administration, record keeping, advertising, marketing, sales or other related activities, plant cleaning, plant communications, and employee work scheduling;
(B) machinery, equipment and tools used primarily in maintaining and repairing any type of machinery and equipment or the building and plant;
(C) transportation equipment not primarily used in a production, warehousing or ma- terial handling operation at the plant or facility;
(D) office machines and equipment including computers and related periheral equip- ment not used directly and primarily to control or measure the manufacturing process;
(E) furniture and other furnishings;
(F) buildings, other than exempt machinery and equipment that is permanently affixed to or becomes a physical part of the building, and any other part of real estate that is not otherwise exempt;
(G) building fixtures that are not integral to the manufacturing operation, such as utility systems for heating, ventilation, air conditioning, communications, plumbing or electrical;
(H) machinery and equipment used for general plant heating, cooling and lighting;
(I) motor vehicles that are registered for operation on public highways; or
(J) employee apparel, except safety and protective apparel that is purchased by an em- ployer and furnished gratuitously to employees who are involved in production or research activities.
(6) Subsections (3) and (5) shall not be construed as exclusive listings of the machinery and equipment that qualify or do not qualify as an integral or essential part of an integrated production operation. When machinery or equipment is used as an integral or essential part of production operations part of the time and for nonproduction purpose at other times, the primary use of the machinery or equipment shall determine whether or not such machinery or equipment qualifies for exemption.
(7) The secretary of revenue shall adopt rules and regulations necessary to administer the provisions of this subsection;
(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and con-
ducting programs for the improvement of public health;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides, germi-
cides, pesticides and fungicides; and services, purchased and used for the purpose of pro-
ducing plants in order to prevent soil erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services rendered by an ad-
vertising agency or licensed broadcast station or any member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;
(pp) all sales of drill bits and explosives actually utilized in the exploration and produc- tion of oil or gasmaterial handling equipment, racking systems and other related machinery and equipment that is used for the handling, movement or storage of tangible personal property in a warehouse or distribution facility in this state; all sales of installation, repair and maintenance services performed on such machinery and equipment; and all sales of repair and replacement parts for such machinery and equipment. For purposes of this sub- section, a warehouse or distribution facility means a single, fixed location that consists of buildings or structures in a contiguous area where storage or distribution operations are conducted that are separate and apart from the business' retail operations, if any, and which do not otherwise qualify for exemption as occurring at a manufacturing or processing plant or facility. Material handling and storage equipment shall include aeration, dust control, cleaning, handling and other such equipment that is used in a public grain warehouse or other commercial grain storage facility, whether used for grain handling, grain storage, grain refining or processing, or other grain treatment operation;
(qq) all sales of tangible personal property and services purchased by a nonprofit mu-
seum or historical society or any combination thereof, including a nonprofit organization
which is organized for the purpose of stimulating public interest in the exploration of space
by providing educational information, exhibits and experiences, which is exempt from fed-
eral income taxation pursuant to section 501(c)(3) of the federal internal revenue code of
1986;
(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;
(ss) all sales of tangible personal property and services purchased by a public broad-
casting station licensed by the federal communications commission as a noncommercial
educational television or radio station;
(tt) all sales of tangible personal property and services purchased by or on behalf of a
not-for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;
(uu) all sales of tangible personal property and services purchased by or on behalf of
any rural volunteer fire-fighting organization for use exclusively in the performance of its
duties and functions;
(vv) all sales of tangible personal property purchased by any of the following organiza-
tions which are exempt from federal income taxation pursuant to section 501(c)(3) of the
federal internal revenue code of 1986, for the following purposes, and all sales of any such
property by or on behalf of any such organization for any such purpose:
(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related serv-
ices to reduce disability and death from cardiovascular diseases and stroke;
(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;
(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for per-
sons who are mentally ill and to education, research and support for them and their families;
(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of elimi-
nating diabetes through medical research, public education focusing on disease prevention
and education, patient education including information on coping with diabetes, and pro-
fessional education and training;
(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all
lung diseases through medical research, public education including information on coping
with lung diseases, professional education and training related to lung disease and other
related services to reduce the incidence of disability and death due to lung disease;
(6) the Kansas Chapters of the Alzheimer's Disease and related disorders association,
inc. for the purpose of providing assistance and support to persons in Kansas with Alzhei-
mer's disease, and their families and caregivers; and
(7) the National Kidney Foundation of Kansas and Western Missouri for the purposes of providing emotional educational and financial support for the prevention, treatment and public awareness of kidney disease;
(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such
organization.;
(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 50501(c)(3) of the federal internal revenue code
of 1986 contracted with to operate such zoo and all sales of tangible personal property or
services purchased by a contractor for the purpose of constructing, equipping, reconstruct-
ing, maintaining, repairing, enlarging, furnishing or remodeling facilities for any nonprofit
zoo which would be exempt from taxation under the provisions of this section if purchased
directly by such nonprofit zoo or the entity operating such zoo. Nothing in this subsection
shall be deemed to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any nonprofit zoo. When any nonprofit zoo shall contract
for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities, it shall obtain from the state and furnish to the contractor
an exemption certificate for the project involved, and the contractor may purchase materials
for incorporation in such project. The contractor shall furnish the number of such certificate
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the nonprofit zoo concerned a sworn statement, on a
form to be provided by the director of taxation, that all purchases so made were entitled to
exemption under this subsection. All invoices shall be held by the contractor for a period
of five years and shall be subject to audit by the director of taxation. If any materials pur-
chased under such a certificate are found not to have been incorporated in the building or
other project or not to have been returned for credit or the sales or compensating tax
otherwise imposed upon such materials which will not be so incorporated in the building
or other project reported and paid by such contractor to the director of taxation not later
than the 20th day of the month following the close of the month in which it shall be deter-
mined that such materials will not be used for the purpose for which such certificate was
issued, the nonprofit zoo concerned shall be liable for tax on all materials purchased for the
project, and upon payment thereof it may recover the same from the contractor together
with reasonable attorney fees. Any contractor or any agent, employee or subcontractor
thereof, who shall use or otherwise dispose of any materials purchased under such a certif-
icate for any purpose other than that for which such a certificate is issued without the
payment of the sales or compensating tax otherwise imposed upon such materials, shall be
guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties
provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property and services by or on
behalf of such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air, free access radio
or television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by a religious or-
ganization which is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code, and used exclusively for religious purposes; and
(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof.;
(ccc) all sales of tangible personal property and services purchased to repair or replace tangible personal property or real property which was damaged or destroyed in this state as a result of a weather related event or occurrence which the president of the United States has declared, pursuant to federal law, to be a major disaster, and grants from the federal government to meet disaster related expenses resulting from such event or occurrence have been authorized. No such sale shall be exempt hereunder unless occurring within three years after the date of such declaration. Sales tax paid on and after October 1, 1998, but prior to the effective date of this act upon the gross receipts received from any such sale shall be refunded if such claim is filed on or before July 1, 2000. Also, in the event that any such sale occurs after any such event or occurrence but before any such declaration, a sales tax refund shall be allowed if claimed within nine months after the date of such declaration. Each claim for a sales tax refund shall be verified and submitted to the director of taxation upon forms furnished by the director and shall be accompanied by any additional docu- mentation required by the director. The director shall review each claim and shall refund that amount of sales tax paid as determined under the provisions of this section. All refunds shall be paid from the sales tax refund fund upon warrants of the director of accounts and reports pursuant to vouchers approved by the director or the director's designee;
(ddd) all sales of tangible personal property and services purchased by a primary care clinic or health center the primary purpose of which is to provide services to medically underserved individuals and families, and which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code, and all sales of tangible personal property or services purchased by a contractor for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling fa- cilities for any such clinic or center which would be exempt from taxation under the provi- sions of this section if purchased directly by such clinic or center. Nothing in this subsection shall be deemed to exempt the purchase of any construction machinery, equipment or tools used in the constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur- nishing or remodeling facilities for any such clinic or center. When any such clinic or center shall contract for the purpose of constructing, equipping, reconstructing, maintaining, re- pairing, enlarging, furnishing or remodeling facilities, it shall obtain from the state and furnish to the contractor an exemption certificate for the project involved, and the contractor may purchase materials for incorporation in such project. The contractor shall furnish the number of such certificate to all suppliers from whom such purchases are made, and such suppliers shall execute invoices covering the same bearing the number of such certificate. Upon completion of the project the contractor shall furnish to such clinic or center concerned a sworn statement, on a form to be provided by the director of taxation, that all purchases so made were entitled to exemption under this subsection. All invoices shall be held by the contractor for a period of five years and shall be subject to audit by the director of taxation. If any materials purchased under such a certificate are found not to have been incorporated in the building or other project or not to have been returned for credit or the sales or compensating tax otherwise imposed upon such materials which will not be so incorporated in the building or other project reported and paid by such contractor to the director of taxation not later than the 20th day of the month following the close of the month in which it shall be determined that such materials will not be used for the purpose for which such certificate was issued, such clinic or center concerned shall be liable for tax on all materials purchased for the project, and upon payment thereof it may recover the same from the contractor together with reasonable attorney fees. Any contractor or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any materials purchased under such a certificate for any purpose other than that for which such a certificate is issued without the payment of the sales or compensating tax otherwise imposed upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall be subject to the pen- alties provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
(eee) (1) all sales of manual and powered wheelchairs, stairway lifts, braille writers, electronic braille equipment, hearing aids, telephone communication devices, assistive lis- tening devices and other aids that enhance an individual's ability to hear, home respiratory equipment and accessories, hospital beds and accessories and ambulatory aids and, if pur- chased by or on behalf of a person with one or more physical or mental disabilities to enable them to function more independently, all sales of scooters, reading machines, electronic print enlargers and magnifiers, electronic alternative and augmentative communication devices, environmental control units and items used solely to modify motor vehicles to permit the use of such motor vehicles by individuals with disabilities; and (2) all sales of repair and re- placement parts for property described in paragraph (1) and all sales of services performed in the installation, maintenance or repair of such property;
(fff) all sales of materials and services purchased by any class II or III railroad as classified by the federal interstate commerce commission for the construction, renovation, repair or replacement of class II or III railroad track and facilities used directly in interstate commerce. In the event any such track or facility for which materials and services were purchased sales tax exempt is not operational for five years succeeding the allowance of such exemption, the total amount of sales tax which would have been payable except for the operation of this subsection shall be recouped in accordance with rules and regulations adopted for such purpose by the secretary of revenue;
(ggg) all sales of materials and services purchased for the original construction, recon- struction, repair or replacement of grain storage facilities; and
(hhh) all sales of tangible personal property and services purchased by or on behalf of the Kansas Academy of Science which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986, and used solely by such academy for the preparation, publication and dissemination of educational materials.'';
In the repealer and title by inserting in the appropriate place ``K.S.A. 1998 Supp. 79-
3602'';
On roll call, the vote was: Yeas 120; Nays 4; Present but not voting: 0; Absent or not
voting: 1.
Also, roll call was demanded on motion of Rep. Myers to amend HB 2216 on page 2, in
line 20, after the period by inserting the following:
``Sec. . (a) Upon application to the director of taxation upon forms devised and pro-
vided therefor accompanied by any additional documentation required by the director, a
portion of the sales tax paid pursuant to the purchase of a motor vehicle which replaces a
motor vehicle sold at an isolated or occasional sale occurring within 30 days prior or sub-
sequent to the date of such purchase shall be refunded. The amount of such refund shall
be equal to the gross receipts received from the sale of the replaced motor vehicle multiplied
by the applicable sales tax rate. All refunds shall be paid from the sales tax refund fund
upon warrants of the director of accounts and reports issued pursuant to vouchers approved
by the director.
(b) The provisions of this section shall be deemed to be supplemental to the Kansas
retailers' sales tax act.''; Renumber sections accordingly;
On roll call, the vote was: Yeas 118; Nays 7; Present but not voting: 0; Absent or not
voting: 0.
Also, roll call was demanded on motion of Rep. Wilk to amend HB 2216 by inserting a
new section:
``Sec. . K.S.A. 1998 Supp. 79-3635 is hereby amended to read as follows: 79-3635.
(a) (1) A claimant and certain other individuals shall be entitled to a refund of retailers'
sales taxes paid upon food during the calendar year 1998 and each year thereafter in the
amount hereinafter provided. For calendar years 1998 and 1999, there shall be allowed for
each member of a household of a claimant having income of $12,500 or less, an amount
equal to $60. For calendar years 1998 and 1999, there shall be allowed for each member
of a household of a claimant having income of more than $12,500 but not more than $25,000,
an amount equal to $30. For calendar year 2000, and all such years thereafter, there shall be allowed for an individual, whether or not such individual qualifies as a claimant, and each member of a household of such individual having an income of $6,000 or less, an amount equal to $60. For calendar year 2000, and all such years thereafter, there shall be allowed for each member of a household of a claimant having an income of more than $6,000 but not more than $12,500, an amount equal to $60. For calendar year 2000, and all such years thereafter, there shall be allowed for each member of a household of a claimant having an income of more than $12,500 but not more than $25,000, an amount equal to $60. All such
claims shall be paid from the sales tax refund fund upon warrants of the director of accounts
and reports pursuant to vouchers approved by the director of taxation or by a person or
persons designated by the director.
(2) As an alternative to the procedure described by paragraph 1, for all taxable years
commencing after December 31, 1997, there shall be allowed as a credit against the tax
liability of a resident individual imposed under the Kansas income tax act an amount equal
to $60 or $30, as the case requires, for each member of a household. If the amount of such
tax credit exceeds the claimant's or individual's income tax liability for such taxable year,
such excess amount shall be refunded to the claimant.
(b) A head of household shall make application for refunds for all members of the same
household upon a common form provided for the making of joint claims. All claims paid to
members of the same household shall be paid as a joint claim by means of a single warrant.
(c) No claim for a refund of taxes under the provisions of K.S.A. 79-3632 et seq. shall
be paid or allowed unless such claim is actually filed with and in the possession of the
department of revenue on or before April 15 of the year next succeeding the year in which
such taxes were paid. The director of taxation may: (1) Extend the time for filing any claim
under the provisions of this act when good cause exists therefor; or (2) accept a claim filed
after the deadline for filing in the case of sickness, absence or disability of the claimant if
such claim has been filed within four years of such deadline.'';
In the repealer and title, by inserting ``K.S.A. 1998 Supp. 79-3635'' in the appropriate
place;
On roll call, the vote was: Yeas 114; Nays 5; Present but not voting: 0; Absent or not
voting: 6.
Absent or not voting: Burroughs, Kirk, Krehbiel, Mayans, Nichols, Reinhardt.
The motion of Rep. Wilk prevailed.
Also, on motion of Rep. Faber to amend HB 2216, the motion did not prevail.
Also, roll call was demanded on motion of Rep. Landwehr to amend HB 2216 on page
2, after line 20, by inserting the following:
``New Sec. 2. For all taxable years commencing after December 31, 1998, there shall
be allowed as a credit against the tax liability imposed under the Kansas income tax act upon
an individual who is certificated to instruct and educate students of grades kindergarten
through 12 in an accredited school, whether public or otherwise, an amount, not to exceed
$500, equal to the purchase costs of equipment, materials or other teaching aids for use in
the classroom to assist in the education of the students of such individual. If the amount of
such tax credit exceeds the individual's income tax liability for the appropriate taxable year,
such excess amount shall be refunded.
New Sec. 3. For all taxable years commencing after December 31, 1998, there shall be
allowed as a credit against the tax liability imposed under the Kansas income tax act upon
an individual amounts incurred during the taxable year for education expenses for all de-
pendents of such individual attending an elementary or secondary school which is located
in Kansas which adheres to the provisions of the federal civil rights act of 1964 and the
Kansas act against discrimination, and attendance at which satisfies the requirements of
K.S.A. 72-1111, and amendments thereto. As used in this section: ``Education expenses''
include, but are not limited to, textbooks and other instructional materials and equipment
and computer hardware and software. The amount of such credit shall be 25% of the
amounts paid for education expenses in excess of $250, but shall not exceed $500 expended
for all dependents in any taxable year. If the amount of such tax credit exceeds the indi-
vidual's income tax liability for the appropriate taxable year, such excess amount shall be
refunded.
Sec. 4. K.S.A. 1998 Supp. 79-32,117 is hereby amended to read as follows: 79-32,117.
(a) The Kansas adjusted gross income of an individual means such individual's federal ad-
justed gross income for the taxable year, with the modifications specified in this section.
(b) There shall be added to federal adjusted gross income:
(i) Interest income less any related expenses directly incurred in the purchase of state
or political subdivision obligations, to the extent that the same is not included in federal
adjusted gross income, on obligations of any state or political subdivision thereof, but to the
extent that interest income on obligations of this state or a political subdivision thereof issued
prior to January 1, 1988, is specifically exempt from income tax under the laws of this state
authorizing the issuance of such obligations, it shall be excluded from computation of Kansas
adjusted gross income whether or not included in federal adjusted gross income. Interest
income on obligations of this state or a political subdivision thereof issued after December
31, 1987, shall be excluded from computation of Kansas adjusted gross income whether or
not included in federal adjusted gross income.
(ii) Taxes on or measured by income or fees or payments in lieu of income taxes imposed
by this state or any other taxing jurisdiction to the extent deductible in determining federal
adjusted gross income and not credited against federal income tax. This paragraph shall not
apply to taxes imposed under the provisions of K.S.A. 79-1107 or 79-1108, and amendments
thereto, for privilege tax year 1995, and all such years thereafter.
(iii) The federal net operating loss deduction.
(iv) Federal income tax refunds received by the taxpayer if the deduction of the taxes
being refunded resulted in a tax benefit for Kansas income tax purposes during a prior
taxable year. Such refunds shall be included in income in the year actually received regard-
less of the method of accounting used by the taxpayer. For purposes hereof, a tax benefit
shall be deemed to have resulted if the amount of the tax had been deducted in determining
income subject to a Kansas income tax for a prior year regardless of the rate of taxation
applied in such prior year to the Kansas taxable income, but only that portion of the refund
shall be included as bears the same proportion to the total refund received as the federal
taxes deducted in the year to which such refund is attributable bears to the total federal
income taxes paid for such year. For purposes of the foregoing sentence, federal taxes shall
be considered to have been deducted only to the extent such deduction does not reduce
Kansas taxable income below zero.
(v) The amount of any depreciation deduction or business expense deduction claimed
on the taxpayer's federal income tax return for any capital expenditure in making any build-
ing or facility accessible to the handicapped, for which expenditure the taxpayer claimed
the credit allowed by K.S.A. 79-32,177, and amendments thereto.
(vi) Any amount of designated employee contributions picked up by an employer pur-
suant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965, and amendments to such sections.
(vii) The amount of any charitable contribution made to the extent the same is claimed
as the basis for the credit allowed pursuant to K.S.A. 79-32,196, and amendments thereto.
(viii) The amount of any costs incurred for improvements to a swine facility, claimed
for deduction in determining federal adjusted gross income, to the extent the same is claimed
as the basis for any credit allowed pursuant to K.S.A. 1998 Supp. 79-32,204 and amendments
thereto.
(ix) The amount of any ad valorem taxes and assessments paid and the amount of any
costs incurred for habitat management or construction and maintenance of improvements
on real property, claimed for deduction in determining federal adjusted gross income, to
the extent the same is claimed as the basis for any credit allowed pursuant to K.S.A. 79-
32,203 and amendments thereto.
(x) The amount of any contributions made to an elementary or secondary school to the extent the same is claimed as the basis for the credit allowed pursuant to section 1.
(c) There shall be subtracted from federal adjusted gross income:
(i) Interest or dividend income on obligations or securities of any authority, commission
or instrumentality of the United States and its possessions less any related expenses directly
incurred in the purchase of such obligations or securities, to the extent included in federal
adjusted gross income but exempt from state income taxes under the laws of the United
States.
(ii) Any amounts received which are included in federal adjusted gross income but which
are specifically exempt from Kansas income taxation under the laws of the state of Kansas.
(iii) The portion of any gain or loss from the sale or other disposition of property having
a higher adjusted basis for Kansas income tax purposes than for federal income tax purposes
on the date such property was sold or disposed of in a transaction in which gain or loss was
recognized for purposes of federal income tax that does not exceed such difference in basis,
but if a gain is considered a long-term capital gain for federal income tax purposes, the
modification shall be limited to that portion of such gain which is included in federal adjusted
gross income.
(iv) The amount necessary to prevent the taxation under this act of any annuity or other
amount of income or gain which was properly included in income or gain and was taxed
under the laws of this state for a taxable year prior to the effective date of this act, as
amended, to the taxpayer, or to a decedent by reason of whose death the taxpayer acquired
the right to receive the income or gain, or to a trust or estate from which the taxpayer
received the income or gain.
(v) The amount of any refund or credit for overpayment of taxes on or measured by
income or fees or payments in lieu of income taxes imposed by this state, or any taxing
jurisdiction, to the extent included in gross income for federal income tax purposes.
(vi) Accumulation distributions received by a taxpayer as a beneficiary of a trust to the
extent that the same are included in federal adjusted gross income.
(vii) Amounts received as annuities under the federal civil service retirement system
from the civil service retirement and disability fund and other amounts received as retire-
ment benefits in whatever form which were earned for being employed by the federal
government or for service in the armed forces of the United States.
(viii) Amounts received by retired railroad employees as a supplemental annuity under
the provisions of 45 U.S.C. 228b (a) and 228c (a)(1) et seq.
(ix) Amounts received by retired employees of a city and by retired employees of any
board of such city as retirement allowances pursuant to K.S.A. 13-14,106, and amendments
thereto, or pursuant to any charter ordinance exempting a city from the provisions of K.S.A.
13-14,106, and amendments thereto.
(x) For taxable years beginning after December 31, 1976, the amount of the federal
tentative jobs tax credit disallowance under the provisions of 26 U.S.C. 280 C. For taxable
years ending after December 31, 1978, the amount of the targeted jobs tax credit and work
incentive credit disallowances under 26 U.S.C. 280 C.
(xi) For taxable years beginning after December 31, 1986, dividend income on stock
issued by Kansas Venture Capital, Inc.
(xii) For taxable years beginning after December 31, 1989, amounts received by retired
employees of a board of public utilities as pension and retirement benefits pursuant to K.S.A.
13-1246, 13-1246a and 13-1249 and amendments thereto.
(xiii) For taxable years beginning after December 31, 1993, the amount of income
earned on contributions deposited to an individual development account under K.S.A. 79-
32,117h, and amendments thereto.
(xiv) For all taxable years commencing after December 31, 1996, that portion of any
income of a bank organized under the laws of this state or any other state, a national banking
association organized under the laws of the United States, an association organized under
the savings and loan code of this state or any other state, or a federal savings association
organized under the laws of the United States, for which an election as an S corporation
under subchapter S of the federal internal revenue code is in effect, which accrues to the
taxpayer who is a stockholder of such corporation and which is not distributed to the stock-
holders as dividends of the corporation.
(d) There shall be added to or subtracted from federal adjusted gross income the tax-
payer's share, as beneficiary of an estate or trust, of the Kansas fiduciary adjustment deter-
mined under K.S.A. 79-32,135, and amendments thereto.
(e) The amount of modifications required to be made under this section by a partner
which relates to items of income, gain, loss, deduction or credit of a partnership shall be
determined under K.S.A. 79-32,131, and amendments thereto, to the extent that such items
affect federal adjusted gross income of the partner.'';
In the title and repealer by inserting ``K.S.A. 1998 Supp. 79-32,117'' in the appropriate
place;
On roll call, the vote was: Yeas 67; Nays 54; Present but not voting: 0; Absent or not
voting: 4.
Absent or not voting: Larkin, McClure, Nichols, Pauls.
The motion of Rep. Landwehr prevailed.
Also, on motion of Rep. Powers to amend HB 2216, the motion did not prevail.
Also, on motion of Rep. Aurand HB 2216 be amended on page 2, after line 20, by
inserting a new section to read as follows:
``Sec. 3. K.S.A. 1998 Supp. 72-6431 is hereby amended to read as follows: 72-6431. (a)
The board of each district shall levy an ad valorem tax upon the taxable tangible property
of the district in the school years specified in subsection (b) for the purpose of:
(1) Financing that portion of the district's general fund budget which is not financed
from any other source provided by law;
(2) paying a portion of the costs of operating and maintaining public schools in partial
fulfillment of the constitutional obligation of the legislature to finance the educational in-
terests of the state; and
(3) with respect to any redevelopment district established prior to July 1, 1997, pursuant
to K.S.A. 12-1771, and amendments thereto, paying a portion of the principal and interest
on bonds issued by cities under authority of K.S.A. 12-1774, and amendments thereto, for
the financing of redevelopment projects upon property located within the district.
(b) The tax required under subsection (a) shall be levied at a rate of 20 mills in the 1998-99 school year and18 mills in the 1999-2000 school year and 15 mills in the 2000- 2001 school year.
(c) The proceeds from the tax levied by a district under authority of this section, except
the proceeds of such tax levied for the purpose of paying a portion of the principal and
interest on bonds issued by cities under authority of K.S.A. 12-1774, and amendments
thereto, for the financing of redevelopment projects upon property located within the dis-
trict, shall be deposited in the general fund of the district.
(d) On June 1 of each year, the amount, if any, by which a district's local effort exceeds
the amount of the district's state financial aid, as determined by the state board, shall be
remitted to the state treasurer. Upon receipt of any such remittance, the state treasurer
shall deposit the same in the state treasury to the credit of the state school district finance
fund.
(e) No district shall proceed under K.S.A. 79-1964, 79-1964a or 79-1964b, and amend-
ments to such sections.'';
In the title and repealer by inserting the amendatory cite in the appropriate place;
Also, on motion of Rep. Adkins HB 2216 be amended on page 2, after line 20, by inserting
the following sections:
``Sec. 3. K.S.A. 75-37,116 is hereby amended to read as follows: 75-37,116. As used in
K.S.A. 75-37,116 through 75-37,119, and amendments thereto:
(a) ``Alternative fuel'' has the meaning provided by 42 U.S.C. 13211.
(b) ``Alternative-fueled motor vehicle'' means a motor vehicle that operates on an alter-
native fuel and that, meets or exceeds the clean fuel vehicle standards in the federal clean
air act amendments of 1990, Title II and meets one of the following categories:
(1) Bi-fuel motor vehicle: A motor vehicle with two separate fuel systems designed to run on either an alternative fuel or conventional fuel, using only one fuel at a time;
(2) dedicated motor vehicle: A motor vehicle with an engine designed to operate on a single alternative fuel only; or
(3) flexible fuel motor vehicle: A motor vehicle that may operate on a blend of an alter- native fuel with a conventional fuel, such as E-85 (85% ethanol and 15% gasoline) or M-85 (85% methanol and 15% gasoline), as long as such motor vehicle is capable of operating on at least an 85% alternative fuel blend.
(c) ``Alternative fuel fueling station'' means the property which is directly related to the
delivery of alternative fuel into the fuel tank of a motor vehicle propelled by such fuel,
including the compression equipment and, storage vessels and dispensers for such fuel at
the point where such fuel is delivered, but only if such property is primarily used to deliver such fuel for use in a qualified alternative-fueled motor vehicle.
(d) ``Government agency'' means a county, a city, a school district or another govern-
mental unit, including a public transit agency.
(e) ``Government fleet'' means a fleet of 10 or more motor vehicles owned and operated
by a government agency.
(f) ``Incremental cost'' means the cost that results from subtracting the manufacturer's
list price of the motor vehicle operating on conventional gasoline or diesel fuel from the
manufacturer's list price of the same model motor vehicle designed to operate on an alter- natealternative fuel.
(g) ``Conversion cost'' means the cost that results from modifying a motor vehicle which is propelled by gasoline or diesel to be propelled by an alternative fuel.
(g)(h) ``Secretary'' means the secretary of administration.
Sec. 4. K.S.A. 75-37,117 is hereby amended to read as follows: 75-37,117. (a) There is
hereby established the alternative fuels loan program for the purpose of making loans to
government agencies which own and operate motor vehicles to encourage and assist them
to:
(1) Purchase new alternative-motor fueledalternative-fueled motor vehicles;
(2) convert existing motor vehicles which operate on gasoline and diesel fuel to operate
on alternative fuels; and
(3) construct motor vehicle fueling facilities to serve alternative-fueled motor vehicles.
(b) The alternative-fuels loan program shall be administered by the secretary. The sec-
retary shall adopt rules and regulations establishing procedures, criteria and conditions for
making loans from the alternative-fuels government fleet loan fund and such other rules
and regulations as necessary to operate the alternative-fuels loan program.
Sec. 5. K.S.A. 75-37,119 is hereby amended to read as follows: 75-37,119. (a) In ac-
cordance with the provisions of this section, the secretary is hereby authorized to enter into
loan agreements with government agencies for the purposes stated in K.S.A. 75-37,117, and amendments thereto, and to loan moneys in the alternative-fuels government fleet loan fund
in accordance with such agreements.
(b) Loans made from the alternative-fuels government fleet loan fund may only be for
the following amounts:
(1) For the incremental cost of purchasing a new alternative-fueled motor vehicle:
(A) A maximum of $2,000$3,000 per motor vehicle for motor vehicles having a gross
vehicle weight of 10,000 lbs. or less; (B) a maximum of $5,000 per motor vehicle for motor
vehicles having a gross vehicle weight of more than 10,000 lbs. but less than 26,000 lbs.;
and (C) a maximum of $50,000 for motor vehicles having a gross vehicle weight of 26,000
lbs. or more;
(2) for the conversion of a new or used motor vehicle designed to operate on conven-
tional gasoline or diesel fuel to operate on an alternative fuel:
(A) A maximum of $2,000$3,000 per motor vehicle for motor vehicles having a gross
vehicle weight of 10,000 lbs. or less; (B) a maximum of $5,000 per motor vehicle for motor
vehicles having a gross weight of more than 10,000 lbs. but less than 26,000 lbs.; and (C) a
maximum of $50,000 for motor vehicles having a gross vehicle weight of 26,000 lbs. or more;
and
(3) a maximum of $100,000$200,000 for the construction of each alternative-fuel fu-
eling stationsstation;
(c) No government agency shall be entitled to receive an aggregate amount of more
than $100,000 in loans for new alternative-fueled motor vehicle purchases or motor vehicle
conversions in any fiscal year, nor shall any government agency be entitled to receive an
aggregate amount of more than $100,000$200,000 in loans for construction of alternative-
fuel fueling stations in any fiscal year.
(d) Government agencies receiving loans from the alternative-fuels government fleet
loan fund shall, as a condition of receiving and using the loans:
(1) Agree to use the alternative fuel for which any alternative-fueled motor vehicle which
is purchased or converted using loan proceeds;
(2) agree to notify the secretary in writing if a motor vehicle converted using loan pro-
ceeds becomes inoperable through mechanical failure or accident and to pursue a remedy
outlined in rules and regulations;
(3) provide reasonable data requested by the secretary on the performance of alterna-
tive-fueled motor vehicles purchased or converted with loan proceeds;
(4) submit alternative-fueled motor vehicles purchased or converted with loan proceeds
to reasonable inspections by the secretary as required by rules and regulations; and
(5) make alternative-fuel fueling stations constructed with loan proceeds available to
other government alternative-fueled fleets and, within the capacity of the fueling facility, to
public alternative-fueled motor vehicle operators.
(e) Each loan agreement entered into under this section shall fix the terms of repayment
and shall provide for interest payable on the loan. Such interest may be at fixed or variable
rates. Such terms of repayment shall be fixed to require a loan repayment schedule not to
exceed four years. When developing repayment schedules for loans, the secretary shall
consider the projected savings to the government agency resulting from the use of an al-
ternative fuel.
(f) The secretary shall develop uniform application forms to be used for all loans.
(g) The secretary shall evaluate the plans developed by the applicant government agency
for converting its fleet to operate on alternative fuels and shall give preference in making
loans to those government agencies which are prepared to make substantial investments of
their own funds in converting their fleets to operate on alternative fuels and which are
prepared to work cooperatively with the state, other government agencies and private sector
persons in developing an alternative-fuels fueling infrastructure in the state.
(h) The secretary may utilize the collection procedures provided in K.S.A. 75-6201 et
seq., and amendments thereto, to collect delinquent loan payments by deducting the delin-
quent amount from payments from state agencies to the government agency that is delin-
quent in its loan repayment.
Sec. 6. K.S.A. 79-32,201 is hereby amended to read as follows: 79-32,201. (a) Any tax-
payer who makes expenditures for a qualified alternative-fueled motor vehicle propertyor alternative-fuel fueling station shall be allowed a credit against the income tax imposed by
article 32 of chapter 79 of the Kansas Statutes Annotated, as follows:
(1) For any qualified alternative-fueled motor vehicle property placed in service on or
after January 1, 1996, and before January 1, 19992005, an amount equal to 50% of the total amount expendedincremental cost or conversion cost for each qualified alternative-fueled
motor vehicle property but not to exceed $2,500$3,000 for each such motor vehicle with a gross vehicle weight of less than 10,000 lbs.; $5,000 for a heavy duty motor vehicle with a gross vehicle weight of greater than 10,000 lbs. but less than 26,000 lbs.; and $50,000 for motor vehicles having a gross vehicle weight of greater than 26,000 lbs.;
(2) for any qualified alternative-fueled motor vehicle property placed in service on or
after January 1, 19992005, an amount equal to 40% of the total amount expendedincre- mental cost or conversion cost for each qualified alternative-fueled motor vehicle property,
but not to exceed $2,000$2,400 for each such motor vehicle with a gross vehicle weight of less than 10,000 lbs.; $4,000 for a heavy duty motor vehicle with a gross vehicle weight of greater than 10,000 lbs. but less than 26,000 lbs.; and $40,000 for motor vehicles having a gross vehicle weight of greater than 26,000 lbs.;
(3) for any qualified alternative-fuel fueling station placed in service on or after January 1, 1996, and before January 1, 2005, an amount equal to 50% of the total amount expended for each qualified alternative-fuel fueling station but not to exceed $200,000 for each fueling station;
(4) for any qualified alternative-fuel fueling station placed in service on or after January 1, 2005, an amount equal to 40% of the total amount expended for each qualified alternative- fuel fueling station, but not to exceed $160,000 for each fueling station.
(b) If no credit has been claimed pursuant to subsection (a), a credit in an amount not
exceeding the lesser of 5% of the cost of the vehicle or $750 shall be allowed to a taxpayer
who purchases a motor vehicle equipped by the vehicle manufacturer with qualified alter- native-fueled motor vehicle propertyan alternative fuel system and who is unable or elects
not to determine the exact basis attributable to such property. The credit under this sub-
section shall be allowed only to the first individual to take title to such motor vehicle, other
than for resale.
(c) The tax credit under subsection (a) or (b) shall be deducted from the taxpayer's
income tax liability for the taxable year in which the expenditures are made by the taxpayer.
If the amount of the tax credit exceeds the taxpayer's income tax liability for the taxable
year, the amount which exceeds the tax liability may be carried over for deduction from the
taxpayer's income tax liability in the next succeeding taxable year or years until the total
amount of the tax credit has been deducted from tax liability, except that no such tax credit
shall be carried over for deduction after the third taxable year succeeding the taxable year
in which the expenditures are made.
(d) As used in this section:
(1) ``Alternative fuel'' has the meaning provided by 42 U.S.C. 13211.
(2) ``Qualified alternative-fueled motor vehicle property'' means:
(A) Equipment installed to modify a motor vehicle which is propelled by gasoline so that the vehicle may be propelled by an alternative fuel;
(B) a motor vehicle originally equipped to be propelled only by an alternative fuel, but only to the extent of the portion of the basis of such motor vehicle which is attributable to the storage of such fuel, the delivery to the engine of such motor vehicle of such fuel and the exhaust of gases from combustion of such fuel; or
(C) property which is directly related to the delivery of an alternative fuel into the fuel tank of a motor vehicle propelled by such fuel, including compression equipment and storage tanks for such fuel at the point where such fuel is so delivered but only if such property is not used to deliver such fuel into any other type of storage tank or receptacle and such fuel is not used for any purpose other than to propel a motor vehicle.
(2) ``Qualified alternative-fueled motor vehicle'' means a motor vehicle that operates on an alternative fuel, meets or exceeds the clean fuel vehicle standards in the federal clean air act amendments of 1990, Title II and meets one of the following categories:
(A) Bi-fuel motor vehicle: A motor vehicle with two separate fuel systems designed to run on either an alternative fuel or conventional fuel, using only one fuel at a time;
(B) dedicated motor vehicle: A motor vehicle with an engine designed to operate on a single alternative fuel only; or
(C) flexible fuel motor vehicle: A motor vehicle that may operate on a blend of an alter- native fuel with a conventional fuel, such as E-85 (85% ethanol and 15% gasoline) or M-85 (85% methanol and 15% gasoline), as long as such motor vehicle is capable of operating on at least an 85% alternative fuel blend.
(3) ``Qualified alternative-fuel fueling station'' means the property which is directly re- lated to the delivery of alternative fuel into the fuel tank of a motor vehicle propelled by such fuel, including the compression equipment, storage vessels and dispensers for such fuel at the point where such fuel is delivered but only if such property is primarily used to deliver such fuel for use in a qualified alternative-fueled motor vehicle.
(4) ``Incremental cost'' means the cost that results from subtracting the manufacturer's list price of the motor vehicle operating on conventional gasoline or diesel fuel from the manufacturer's list price of the same model motor vehicle designed to operate on an alter- native fuel.
(5) ``Conversion cost'' means the cost that results from modifying a motor vehicle which is propelled by gasoline or diesel to be propelled by an alternative fuel.
(3)(6) ``Taxpayer'' means any person who owns and operates a fleet of 10 or more motor vehicles and the average fuel consumption for such fleet of motor vehicles is equal to or greater than 2,000 gallons per yearqualified alternative-fueled vehicle licensed in the state of Kansas or who makes an expenditure for a qualified alternative-fuel fueling station.
(4)(7) ``Person'' means every natural person, association, partnership, limited liability
company, limited partnership or corporation.
(e) The provisions of this section shall apply to all taxable years commencing after De-
cember 31, 1995.
(f) The provisions of this section shall become effective on and after January 1, 1996.
Sec. 7. K.S.A. 79-32,202 is hereby amended to read as follows: 79-32,202. (a) For all
taxable years commencing after December 31, 19961998, there shall be allowed as a credit
against the tax liability of a resident individual imposed under the Kansas income tax act an
amount equal to 25%50% of the amount of the credit allowed against such taxpayer's federal
income tax liability pursuant to section 23 determined without regard to subsection (c)
thereof of the federal internal revenue code for the taxable year in which such credit was
claimed against the taxpayer's federal income tax liability.
(b) For all taxable years commencing after December 31, 19961998, there shall be
allowed as a credit against the tax liability of a resident individual imposed under the Kansas
income tax act an amount equal to $1,500$3,000 for the taxable year in which occurs the
lawful adoption of a child in the custody of the secretary of social and rehabilitation services
or a child with special needs, whether or not such individual is reimbursed for all or part of
qualified adoption expenses or has received a public or private grant therefor. As used in
this subsection, terms and phrases shall have the meanings ascribed thereto by the provisions
of section 23 of the federal internal revenue code. No credit shall be allowed under sub-
section (a) for any qualified adoption expenses incurred in the adoption of a child described
by this subsection.
(c) The credit allowed by subsections (a) and (b) shall not exceed the amount of the tax
imposed by K.S.A. 79-32,110, and amendments thereto, reduced by the sum of any other
credits allowable pursuant to law. If the amount of such tax credit exceeds the taxpayer's
income tax liability for such taxable year, the amount thereof which exceeds such tax liability
may be carried over for deduction from the taxpayer's income tax liability in the next suc-
ceeding taxable year or years until the total amount of the tax credits has been deducted
from tax liability, except that no such tax credit shall be carried over for deduction after the
fifth taxable year succeeding the taxable year in which the credit was claimed.
Sec. 8. K.S.A. 1998 Supp. 79-32,206 is hereby amended to read as follows: 79-32,206.
For all taxable years commencing after December 31, 1997, there shall be allowed as a
credit against the tax liability of a taxpayer imposed under the Kansas income tax act, the
premiums tax upon insurance companies imposed pursuant to K.S.A. 40-252, and amend-
ments thereto, and the privilege tax as measured by net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated, an amount
equal to 15% of the property tax levied for property tax year 1998, and 20% of the property tax levied for property tax year 1999, and all such years thereafter, actually and timely paid
during an income, premiums or privilege taxable year upon commercial and industrial ma-
chinery and equipment classified for property taxation purposes pursuant to section 1 of
article 11 of the Kansas constitution in subclass (5) or (6) of class 2 and machinery and
equipment classified for such purposes in subclass (2) of class 2. For all taxable years com- mencing after December 31, 1997, and if the amount of such tax credit exceeds the taxpayer's
income tax, premiums tax or privilege tax liability for the taxable year, the amount thereof
which exceeds such tax liability shall be refunded to the taxpayer. If the taxpayer is a cor-
poration having an election in effect under subchapter S of the federal internal revenue
code, a partnership or a limited liability company, the credit provided by this section shall
be claimed by the shareholders of such corporation, the partners of such partnership or the
members of such limited liability company in the same manner as such shareholders, part-
ners or members account for their proportionate shares of the income or loss of the cor-
poration, partnership or limited liability company.
New Sec. 9. (a) For all taxable years commencing after December 31, 1999, there shall
be allowed as a credit against the tax liability of a resident individual imposed under the
Kansas income tax act, an amount equal to 25% of the amount of the credit allowed against
such individual's federal income tax liability pursuant to section 24 of the federal internal
revenue code for the taxable year for which such credit was claimed against the individual's
federal income tax liability.
(b) The credit allowed by subsection (a) shall not exceed the amount of tax imposed by
K.S.A. 79-32,110, and amendments thereto, reduced by the sum of any other credits allow-
able pursuant to law.
Sec. 10. K.S.A. 1998 Supp. 79-4217 is hereby amended to read as follows: 79-4217. (a)
There is hereby imposed an excise tax upon the severance and production of coal, oil or gas
from the earth or water in this state for sale, transport, storage, profit or commercial use,
subject to the following provisions of this section. Such tax shall be borne ratably by all
persons within the term ``producer'' as such term is defined in K.S.A. 79-4216, and amend-
ments thereto, in proportion to their respective beneficial interest in the coal, oil or gas
severed. Such tax shall be applied equally to all portions of the gross value of each barrel
of oil severed and subject to such tax and to the gross value of the gas severed and subject
to such tax. The rate of such tax shall be 8% of the gross value of all oil or gas severed from
the earth or water in this state and subject to the tax imposed under this act. The rate of
such tax with respect to coal shall be $1 per ton. For the purposes of the tax imposed
hereunder the amount of oil or gas produced shall be measured or determined: (1) In the
case of oil, by tank tables compiled to show 100% of the full capacity of tanks without
deduction for overage or losses in handling; allowance for any reasonable and bona fide
deduction for basic sediment and water, and for correction of temperature to 60 degrees
Fahrenheit will be allowed; and if the amount of oil severed has been measured or deter-
mined by tank tables compiled to show less than 100% of the full capacity of tanks, such
amount shall be raised to a basis of 100% for the purpose of the tax imposed by this act;
and (2) in the case of gas, by meter readings showing 100% of the full volume expressed in
cubic feet at a standard base and flowing temperature of 60 degrees Fahrenheit, and at the
absolute pressure at which the gas is sold and purchased; correction to be made for pressure
according to Boyle's law, and used for specific gravity according to the gravity at which the
gas is sold and purchased, or if not so specified, according to the test made by the balance
method.
(b) The following shall be exempt from the tax imposed under this section:
(1) The severance and production of gas which is: (A) Injected into the earth for the
purpose of lifting oil, recycling or repressuring; (B) used for fuel in connection with the
operation and development for, or production of, oil or gas in the lease or production unit
where severed; (C) lawfully vented or flared; (D) severed from a well having an average
daily production during a calendar month having a gross value of not more than $87 per
day, which well has not been significantly curtailed by reason of mechanical failure or other
disruption of production; in the event that the production of gas from more than one well
is gauged by a common meter, eligibility for exemption hereunder shall be determined by
computing the gross value of the average daily combined production from all such wells and
dividing the same by the number of wells gauged by such meter; (E) inadvertently lost on
the lease or production unit by reason of leaks, blowouts or other accidental losses; (F) used
or consumed for domestic or agricultural purposes on the lease or production unit from
which it is severed; or (G) placed in underground storage for recovery at a later date and
which was either originally severed outside of the state of Kansas, or as to which the tax
levied pursuant to this act has been paid;
(2) the severance and production of oil which is: (A) From a lease or production unit
whose average daily production is five barrels or less per producing well, which well or wells
have not been significantly curtailed by reason of mechanical failure or other disruption of
production; (B) from a lease or production unit, the producing well or wells upon which
have a completion depth of 2,000 feet or more, and whose average daily production is six
barrels or less per producing well or, if the price of oil as determined pursuant to subsection
(d) is $16 or less, whose average daily production is seven barrels or less per producing well,
or, if the price of oil as determined pursuant to subsection (d) is $15 or less, whose average
daily production is eight barrels or less per producing well, or, if the price of oil as deter-
mined pursuant to subsection (d) is $14 or less, whose average daily production is nine
barrels or less per producing well, or, if the price of oil as determined pursuant to subsection
(d) is $13 or less, whose average daily production is 10 barrels or less per producing well,
which well or wells have not been significantly curtailed by reason of mechanical failure or
other disruption of production; (C) from a lease or production unit, whose production results
from a tertiary recovery process. ``Tertiary recovery process'' means the process or processes
described in subparagraphs (1) through (9) of 10 C.F.R. 212.78(c) as in effect on June 1,
1979; (D) from a lease or production unit, the producing well or wells upon which have a
completion depth of less than 2,000 feet and whose average daily production resulting from
a water flood process, is six barrels or less per producing well, which well or wells have not
been significantly curtailed by reason of mechanical failure or other disruption of production;
(E) from a lease or production unit, the producing well or wells upon which have a com-
pletion depth of 2,000 feet or more, and whose average daily production resulting from a
water flood process, is seven barrels or less per producing well or, if the price of oil as
determined pursuant to subsection (d) is $16 or less, whose average daily production is eight
barrels or less per producing well, or, if the price of oil as determined pursuant to subsection
(d) is $15 or less, whose average daily production is nine barrels or less per producing well,
or, if the price of oil as determined pursuant to subsection (d) is $14 or less, whose average
daily production is 10 barrels or less per producing well, which well or wells have not been
significantly curtailed by reason of mechanical failure or other disruption of production; (F)
test, frac or swab oil which is sold or exchanged for value; or (G) inadvertently lost on the
lease or production unit by reason of leaks or other accidental means;
(3) (A) any taxpayer applying for an exemption pursuant to subsection (b)(2)(A) and
(B) shall make application annually to the director of taxation therefor. Exemptions granted
pursuant to subsection (b)(2)(A) and (B) shall be valid for a period of one year following
the date of certification thereof by the director of taxation; (B) any taxpayer applying for an
exemption pursuant to subsection (b)(2)(D) or (E) shall make application annually to the
director of taxation therefor. Such application shall be accompanied by proof of the approval
of an application for the utilization of a water flood process therefor by the corporation
commission pursuant to rules and regulations adopted under the authority of K.S.A. 55-152
and amendments thereto and proof that the oil produced therefrom is kept in a separate
tank battery and that separate books and records are maintained therefor. Such exemption
shall be valid for a period of one year following the date of certification thereof by the
director of taxation; and (C) notwithstanding the provisions of paragraph (A) or (B), any
exemption in effect on the effective date of this act affected by the amendments to subsec-
tion (b)(2) by this act shall be redetermined in accordance with such amendments. Any such
exemption, and any new exemption established by such amendments and applied for after
the effective date of this shall be valid for a period commencing with May 1, 1998, and
ending on April 30, 1999.
(4) the severance and production of gas or oil from any pool from which oil or gas was
first produced on or after April 1, 1983, as determined by the state corporation commission
and certified to the director of taxation, and continuing for a period of 24 months from the
month in which oil or gas was first produced from such pool as evidenced by an affidavit of
completion of a well, filed with the state corporation commission and certified to the director
of taxation. Exemptions granted for production from any well pursuant to this paragraph
shall be valid for a period of 24 months following the month in which oil or gas was first
produced from such pool. The term ''pool`` means an underground accumulation of oil or
gas in a single and separate natural reservoir characterized by a single pressure system so
that production from one part of the pool affects the reservoir pressure throughout its extent;
(5) the severance and production of oil or gas from a three-year inactive well, as deter-
mined by the state corporation commission and certified to the director of taxation, for a
period of 10 years after the date of receipt of such certification. As used in this paragraph,
``three-year inactive well'' means any well that has not produced oil or gas in more than one
month in the three years prior to the date of application to the state corporation commission
for certification as a three-year inactive well. An application for certification as a three-year
inactive well shall be in such form and contain such information as required by the state
corporation commission, and shall be made prior to July 1, 1996. The commission may
revoke a certification if information indicates that a certified well was not a three-year
inactive well or if other lease production is credited to the certified well. Upon notice to
the operator that the certification for a well has been revoked, the exemption shall not be
applied to the production from that well from the date of revocation;
(6) (A) The incremental severance and production of oil or gas which results from a
production enhancement project begun on or after July 1, 1998, shall be exempt for a period
of seven years from the startup date of such project. As used in this paragraph (6):
(1) ``Incremental severance and production'' means the amount of oil or natural gas
which is produced as the result of a production enhancement project which is in excess of
the base production of oil or natural gas, and is determined by subtracting the base pro-
duction from the total monthly production after the production enhancement projects is
completed.
(2) ``Base production'' means the average monthly amount of production for the twelve-
month period immediately prior to the production enhancement project beginning date,
minus the monthly rate of production decline for the well or project for each month begin-
ning 180 days prior to the project beginning date. The monthly rate of production decline
shall be equal to the average extrapolated monthly decline rate for the well or project for
the twelve-month period immediately prior to the production enhancement project begin-
ning date. Such monthly rate of production decline shall be continued as the decline that
would have occurred except for the enhancement project. The calculation of the base pro-
duction amount shall be evidenced by an affidavit and supporting documentation filed by
the applying taxpayer with the state corporation commission.
(3) ``Workover'' means any downhole operation in an existing oil or gas well that is
designed to sustain, restore or increase the production rate or ultimate recovery of oil or
gas, including but not limited to acidizing, reperforation, fracture treatment, sand/paraffin/
scale removal or other wellbore cleanouts, casing repair, squeeze cementing, initial instal-
lation, or enhancement of artificial lifts including plunger lifts, rods, pumps, submersible
pumps and coiled tubing velocity strings, downsizing existing tubing to reduce well loading,
downhole commingling, bacteria treatments, polymer treatments, upgrading the size of
pumping unit equipment, setting bridge plugs to isolate water production zones, or any
combination of the aforementioned operations; ''workover`` shall not mean the routine main-
tenance, routine repair, or like for-like replacement of downhole equipment such as rods,
pumps, tubing packers or other mechanical device.
(4) ``Production enhancement project'' means performing or causing to be performed
the following:
(i) Workover;
(ii) recompletion to a different producing zone in the same well bore, except recom-
pletions in formations and zones subject to a state corporation commission proration order;
(iii) secondary recovery projects;
(iv) addition of mechanical devices to dewater a gas or oil well;
(v) replacement or enhancement of surface equipment;
(vi) installation or enhancement of compression equipment, line looping or other tech-
niques or equipment which increases production from a well or a group of wells in a project;
(vii) new discoveries of oil or gas which are discovered as a result of the use of new
technology, including, but not limited to, three dimensional seismic studies.
(B) The state corporation commission shall adopt rules and regulations necessary to
efficiently and properly administer the provisions of this paragraph (6) including rules and
regulations for the qualification of production enhancement projects, the procedures for
determining the monthly rate of production decline, criteria for determining the share of
incremental production attributable to each well when a production enhancement project
includes a group of wells, criteria for determining the start up date for any project for which
an exemption is claimed, and determining new qualifying technologies for the purposes of
paragraph (6)(A)(4)(vii).
(C) Any taxpayer applying for an exemption pursuant to this paragraph (6) shall make
application to the director of taxation. Such application shall be accompanied by a state
corporation commission certification that the production for which an exemption is sought
results from a qualified production enhancement project and certification of the base pro-
duction for the enhanced wells or group of wells, and the rate of decline to be applied to
that base production. The secretary of revenue shall provide credit for any taxes paid be-
tween the project startup date and the certification of qualifications by the commission.
(D) The exemptions provided for in this paragraph (6) shall not apply for 12 months
beginning July 1 of the year subsequent to any calendar year during which: (1) In the case
of oil, the secretary of revenue determines that the weighted average price of Kansas oil at
the wellhead has exceeded $20.00 per barrel; or (2) in the case of natural gas the secretary
of revenue determines that the weighted average price of Kansas gas at the wellhead has
exceeded $2.50 per Mcf.
(E) The provisions of this paragraph (6) shall not affect any other exemption allowable
pursuant to this section; and
(7) the severance and production of coal or oil occurring on and after July 1, 1999; and
(7)(8) for the calendar year 1988, and any year thereafter, the severance or production
of the first 350,000 tons of coal from any mine as certified by the state geological survey.
(c) No exemption shall be granted pursuant to subsection (b)(3) or (4) to any person
who does not have a valid operator's license issued by the state corporation commission,
and no refund of tax shall be made to any taxpayer attributable to any production in a period
when such taxpayer did not hold a valid operator's license issued by the state corporation
commission.
(d) On April 15, 1988, and on April 15 of each year thereafter, the secretary of revenue
shall determine from statistics compiled and provided by the United States department of
energy, the average price per barrel paid by the first purchaser of crude oil in this state for
the six-month period ending on December 31 of the preceding year. Such price shall be
used for the purpose of determining exemptions allowed by subsection (b)(2)(B) or (E) for
the twelve-month period commencing on May 1 of such year and ending on April 30 of the
next succeeding year.'';
In the title and repealer by placing amendatory section cites in proper place;
Also, roll call was demanded on motion of Rep. Krehbiel to amend HB 2216 on page 2,
after line 20, by inserting a new section to read as follows:
``Sec. 2. K.S.A. 79-5105 is hereby amended to read as follows: 79-5105. (a) A tax is
hereby levied upon every motor vehicle, as the same is defined by K.S.A. 79-5101, and
amendments thereto, in an amount which shall be determined in the manner hereinafter
prescribed, except that: (1) (A) For 1995, the tax on any motorcycle shall not be less than $6 and the tax on any other motor vehicle shall not be less than $12; and (B) the tax on each motor vehicle the age of which is 15 years or older shall not be more than $12; and (2) forFor 1996, and each year thereafter: (A) The tax on any motorcycle shall not be less
than $12 and the tax on any other motor vehicle shall not be less than $24, except as
otherwise provided by clause (B) and (C); (B) the tax on any motorcycle the model year of
which is 1980 or earlier shall be $6 and the tax on any other motor vehicle the model year
of which is 1980 or earlier shall be $12; and (C) if the tax on any motorcycle in 1995 was
more than $6 but less than $12, the tax shall be determined for 1996 and each year thereafter
in the manner hereinafter prescribed but shall not be less than $6, and if the tax on any
other motor vehicle in 1995 was more than $12 but less than $24, the tax shall be determined
for 1996 and each year thereafter in the manner hereinafter prescribed but shall not be less
than $12; and (2) the minimum amounts established by paragraph (1) shall be reduced in accordance with the following: (A) By 25% in the year 2001; (B) by 50% in the year 2002; (C) by 75% in the year 2003; and (D) by 100% in the year 2004.
(b) The amount of such tax on a motor vehicle shall be computed by: (1) Determining
the amount representing the midpoint of the values included within the class in which such
motor vehicle is classified under K.S.A. 79-5102 or 79-5103, and amendments thereto,
except that the midpoint of class 20 shall be $21,000 plus $2,000 for each $2,000 or portion
thereof by which the trade-in value of the vehicle exceeds $22,000; (2) if the model year of
the motor vehicle is a year other than the year for which the tax is levied, by reducing such
midpoint amount by an amount equal to 16% in 1995, and all years prior thereto, and 15%
in 1996, and all years thereafter, of the remaining balance for each year of difference be-
tween the model year of the motor vehicle and the year for which the tax is levied if the
model year of the motor vehicle is 1981 or a later year or (B) the remaining balance for
each year of difference between the year 1980 and the year for which the tax is levied if the
model year of the motor vehicle is 1980 or any year prior thereto; (3) by multiplying the
amount determined after application of clause (2) above by 30% during calendar year 1995,
28.5% during the calendar year 1996, 26.5% during the calendar year 1997, 24.5% during
the calendar year 1998, 22.5% during the calendar year 1999, and 20% during20% during the calendar year 2000, 15% during the calendar year 2001, 10% during the calendar year 2002, 5% during the calendar year 2003, and 0% during all calendar years thereafter, which
shall constitute the taxable value of the motor vehicle; and (4) by multiplying the taxable
value of the motor vehicle produced under clause (3) above by the county average tax rate.
(c) The ``county average tax rate'' means the total amount of general property taxes
levied within the county by the state, county and all other taxing subdivisions levying such
taxes within such county in the second calendar year before the calendar year in which the
owner's full registration year begins divided by the total assessed tangible valuation of prop-
erty within such county as of November 1 of such second calendar year before the calendar
year in which the owner's full registration year begins as certified by the secretary of revenue,
except that: (1) As of November 1, 1994, such rate shall be computed without regard to
11.429% of the general property taxes levied by school districts pursuant to K.S.A. 72-6431,
and amendments thereto; (2) as of November 1, 1995, such rate shall be computed without
regard to 31.429% of the general property taxes levied by school districts pursuant to K.S.A.
72-6431, and amendments thereto; (3) as of November 1, 1996, such rate shall be computed
without regard to 54.286% of the general property taxes levied by school districts pursuant
to K.S.A. 72-6431, and amendments thereto; (4) as of November 1, 1997, such rate shall
be computed without regard to 70.36% of the general property taxes levied by school dis-
tricts pursuant to K.S.A. 72-6431, and amendments thereto; and (5) as of November 1, 1998,
and such date in all years thereafter, such rate shall be computed without regard to the
general property taxes levied by school districts pursuant to K.S.A. 72-6431, and amend-
ments thereto.
(d) (1) There is hereby established in the state treasury the motor vehicle tax replace- ment fund. All expenditures from such fund to the several county treasurers shall be made by the 10th of every month upon warrants of the director of accounts and reports pursuant to vouchers approved by the secretary of revenue in the amount calculated pursuant to paragraph (2).
(2) For the purpose of reimbursing taxing subdivisions for the amount of revenue lost because of the amendments by this act to subsection (a) and (b), the secretary of revenue shall calculate and certify to the director of accounts and reports by the 10th day of every month such amount. For all applicable tax years, such amount shall be equal to the difference between the tax computed without regard to the amendments by this act to subsections (a) and (b) and the tax computed with regard to such amendments. Upon receipt of such cer- tification, the director of accounts and reports shall transfer the certified amount from the state general fund to the motor vehicle tax replacement fund. In addition the secretary of revenue shall calculate the amount to be reimbursed to each county.
(3) All moneys received under the provisions of this subsection shall be allocated and distributed to the appropriate taxing subdivision in the same manner as provided in K.S.A. 79-5109, and amendments thereto. Moneys received by taxing subdivisions from such taxes shall be apportioned among and credited to tax levy funds in the same manner as provided in K.S.A. 79-5110, and amendments thereto. The county treasurer shall prepare estimates and notify taxing subdivisions of distribution for the purpose of budget preparation in the same manner as provided in K.S.A. 79-5111, and amendments thereto.
Sec. 3. K.S.A. 79-5105 is hereby repealed.'';
By renumbering existing sections accordingly;
In the title, by adding the cite in the appropriate place;
On roll call, the vote was: Yeas 103; Nays 20; Present but not voting: 0; Absent or not
voting: 2.
Also, on motion of Rep. Loyd HB 2216 be amended as amended on motion of Rep.
Adkins, on page 41 of the amendment in subsection (ggg) by inserting after ``facilities'' the
following ``, including rail sidings'';
Also, on motion of Rep. Carmody to amend HB 2216, Rep. O'Neal requested the ques-
tion be divided. The Chair ruled the question was divisible and would be divided into 12
parts, voting on each of the previously adopted amendments separately, plus the other two
parts of the amendment. Rep. Carmody challenged the ruling and requested that it be
divided into three parts. The Chair stated that no one can challenge the ruling of the chair
on division. Rep. Carmody requested his amendment be withdrawn. The amendment was
withdrawn.
Rep. McKinney moved that the House adjourn until 9:00 a.m., Thursday, February 25,
1999. The motion prevailed.