The House met pursuant to adjournment with Speaker pro tem Mays in the chair.
The roll was called with123 members present.
Reps. Haley and Johnston were excused on excused absence by the Speaker.
Present later: Rep. Haley.
Prayer by guest chaplain, Deacon John Bower, First Baptist Church, McClouth, former
representative from the 47th District (1953-1976), and guest of Rep. Flower:
Our Father in Heaven:
We thank you for the God-fearing people who came, and overcame, and
who gave us this great state which we love.
And now, Oh Father, the privilege and the responsibility are ours. Lord,
help us to build, on the foundation they laid, something even better.
Help us to overlook all the critics and knockers, few of whom have any
comprehension of what they are talking about.
Heavenly Father, we recognize that the tasks before us are difficult, yet
we know they must be done.
Grant us wisdom.
Grant us courage.
Grant us patience and understanding.
Forgive our human weakness.
Help us to forgive each other in these trying days.
Grant that from all our striving some good may come for our people and
our state, and for our children.
And may your personal blessing be upon each member of this House today,
and every day.
In the name of Christ: Amen.
The Pledge of Allegiance was led by Rep. Shultz.
INTRODUCTION OF GUESTS
Rep. Judy Morrison introduced Deidra and Brian Knaff, daughter and son-in-law of the
late Rev. Thurman Mitchell. Rep. Morrison presented a certificate in his memory to Deidra.
Rep. Hermes introduced Jeneka Joyce, a senior at Washburn Rural High School, who
has been named the Kansas Basketball Coaches Association's Miss Kansas Basketball. She
was also selected the Kansas State High School Hall of Fame's Class 6A player of the year,
and named to the third team of Parade's All-America Team. Jeneka was accompanied by
her parents, her coach, and the principal of Washburn Rural High School.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills and resolutions were referred to committees as indicated:
Committee of the Whole: HB 3053, 3054.
MESSAGE FROM THE SENATE
Announcing passage of Sub. SB 341.
Announcing passage of HB 2814, as amended; HB 3019, as amended.
The Senate adopts conference committee report on SB 555.
The Senate adopts conference committee report on Sub. HB 2144.
The Senate adopts conference committee report on Sub. HB 2683.
The Senate adopts conference committee report on HB 2855.
The Senate accedes to the request of the House for a conference on S. Sub. for HB 2082 and has appointed Senators Emert, Vratil and Goodwin as conferees on the part of
the Senate.
The Senate accedes to the request of the House for a conference on S. Sub. for Sub. HB 2864 and has appointed Senators Hardenburger, Vidricksen and Gooch as conferees
on the part of the Senate.
The Senate accedes to the request of the House for a conference on HB 2884 and has
appointed Senators Vidricksen, Jordan and Gilstrap as second conferees on the part of the
Senate.
INTRODUCTION OF SENATE BILLS AND CONCURRENT RESOLUTIONS
The following Senate bill was thereupon introduced and read by title:
Sub. SB 341.
COMMUNICATIONS FROM STATE OFFICERS
From Charles R. Ranson, President, Kansas, Inc., County Economic Vitality and Distress
Report, 1998 Report Update, January 2000.
The complete report is kept on file and open for inspection in the office of the Chief
Clerk.
INTRODUCTION OF ORIGINAL MOTIONS
On motion of Rep. Glasscock, pursuant to subsection (k) of Joint Rule 4 of the Joint Rules
of the Senate and House of Representatives, the rules were suspended for the purpose of
considering Sub. HB 2144; HB 2570, 2660; Sub. HB 2683; HB 2814, 2855, 3019, 3054; HR 6006; SB 190; H. Sub. for SB 219; SB 366.
MOTIONS AND RESOLUTIONS OFFERED ON A PREVIOUS DAY
The motion of Rep. O'Connor, in accordance with House Rule 1503 (b), that HR 6006
be changed to the first measure under the order of business General Orders, was considered.
The motion of Rep. O'Connor did not prevail, and remains on the calendar.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House amend-
ments to SB 366, submits the following report:
The Senate accedes to all House amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with House Committee of the Whole
amendments, as follows:
On page 14, in line 24, before ``A'', by inserting ``(a)'';
On page 17, in line 11, by striking ``other than an agricultural lien,'';
On page 60, in line 40, by striking ``local'';
On page 132, in line 10, by striking ``a finding'' and inserting ``findings''; in line 16, by
striking all after ``status''; in line 17, by striking all before the comma; in line 18, after ``priate''
by inserting ``, including an order setting aside the lien and directing the filing officer to
nullify the lien instrument or, if the lien or claim was filed pursuant to the uniform com-
mercial code, an order acting as a termination statement filed pursuant to such code''; in
line 22, by striking ``(b)'' and inserting ``(2)''; in line 40, by striking ``(2)'' and inserting ``(3)'';
in line 42, by striking ``(c)'' and inserting ``(b)''; also in line 42, by striking ``finding'' and
inserting ``findings'';
On page 133, in line 3, by striking ``finding'' and inserting ``findings''; in line 5, by striking
``(d)'' and inserting ``(c)''; also in line 5, by striking ``an''; in line 6, by striking ``finding'' and
inserting ``findings''; also in line 6, by striking ``conclusion'' and inserting ``conclusions''; in
line 10, after the period by inserting ``The court's findings of fact and conclusions of law
may include an order setting aside the lien and directing the filing officer to nullify the lien
instrument purporting to create the lien or claim. If the lien or claim was filed pursuant to
the uniform commercial code, such order shall act as a termination statement filed pursuant
to such code.''; in lines 12, 13 and 16, by striking ``finding'' and inserting ``findings''; also in
lines 12, 13 and 16, by striking ``conclusion'' and inserting ``conclusions''; in line 18, by
striking ``(e)'' and inserting ``(d)''; also in line 18, by striking ``conclusion'' and inserting
``conclusions''; in line 25, by striking ``Finding'' and inserting ``Findings''; also in line 25, by
striking ``Conclusion'' and inserting ``Conclusions'';
On page 134, in line 13, before ``the'', by inserting ``of''; also in line 13, by striking ``or''
the second time it appears; in line 16, by striking the period and inserting ``; or''; after line
16, by inserting:
``(5) SHALL BE set aside and the filing officer shall nullify the lien instrument and in
the case of a lien or claim filed pursuant to the uniform commercial code, the court order
shall act as a termination statement pursuant to such code.'';
Also on page 134, in line 17, by striking ``This'' and inserting ``Except as otherwise pro-
vided, this''; also in line 17, by striking ``finding'' and inserting ``findings''; in line 18, by
striking ``finding'' and inserting ``findings''; also in line 18, by striking ``conclusion'' and
inserting ``conclusions''; by striking all in line 22; in line 23, by striking all before the period
and inserting ``file the findings of fact and conclusions of law in the same class of records
as the subject documentation or instrumentation originally filed, and the court directs the
filing officer to index the findings and conclusions using the same names that were used in
indexing the subject documentation or instrument''; in line 28, by striking ``(f)'' and inserting
``(e)''; in line 43, by striking ``(g)'' and inserting ``(f)'';
\ And your committee on conference recommends the adoption of this report.
Michael R. O'Neal
Tim Carmody
Janice L. Pauls Conferees on the part of House
Tim Emert
John Vratil
Greta Goodwin Conferees on part of Senate
On motion of Rep. O'Neal, the conference committee report on SB 366 was adopted.
On roll call, the vote was: Yeas 97; Nays 25; Present but not voting: 0; Absent or not
voting: 3.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House amend-
ments to SB 190, submits the following report:
The Senate accedes to all House amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with House Committee amendments,
as follows:
On page 1, in line 19, by striking ``1998'' and inserting ``1999'';
On page 4, in line 18, by striking ``1998'' and inserting ``1999''; in line 39, by striking all
after ``(b)''; in line 40, by striking ``sued,'';
On page 5, in line 8, by striking ``1998'' and inserting ``1999'';
On page 6, in line 1, by striking ``1998'' and inserting ``1999'';
On page 7, after line 6, by inserting the following:
``(c) Notwithstanding the provisions of subsection (b), an institutional license may be
renewed once for two years if the holder was issued an institutional license prior to May 8,
1997, has successfully completed two years of postgraduate training in the United States
and has submitted evidence of satisfactory completion of a program of continuing education
required by the board.'';
Also on page 7, in line 7, by striking ``(c)'' and inserting ``(d)''; in line 9, by striking ``1998''
and inserting ``1999''; in line 21, after the period, by inserting: ``The board shall revoke a
licensee's license following conviction of a felony occurring after July 1, 2000, unless a 2/3
majority of the board members present and voting determine by clear and convincing evi-
dence that such licensee will not pose a threat to the public in such person's capacity as a
licensee and that such person has been sufficiently rehabilitated to warrant the public trust.
In the case of a person who has been convicted of a felony and who applies for an original
license or to reinstate a canceled license, the application for a license shall be denied unless
a 2/3 majority of the board members present and voting on such application determine by
clear and convincing evidence that such person will not pose a threat to the public in such
person's capacity as a licensee and that such person has been sufficiently rehabilitated to
warrant the public trust.''; in line 39, by striking ``the branch of''; in line 40, by striking ``for
which the licensee is licensed''; in line 41, after ``of'' by inserting ``physical or mental''; also
in line 41, after ``illness'' by inserting ``or condition''; also in line 41, by striking ``alcoholism,
excessive'' and inserting ``or''; in line 42, after ``of'' where it appears for the first time, by
inserting ``alcohol,''; also in line 42, by striking the comma after ``drugs'' and inserting ``or'';
also in line 42, by striking all after ``substances''; in line 43, by striking all before the period;
On page 8, in line 5, before the period, by inserting: ``either in the course of an investi-
gation or a disciplinary proceeding''; in line 12, by striking ``, and the'' and inserting: ``or to
a presiding officer authorized pursuant to K.S.A. 77-514 and amendments thereto. The'';
On page 9, in line 11, after ``inform'' by inserting ``in writing''; in line 13, by striking
``specified''; by striking all in lines 14 through 34; in line 35, by striking all before the period
and inserting: ``recognized by licensees of the same profession in the same or similar com-
munities as being acceptable under like conditions and circumstances'';
On page 11, in line 20, by striking ``1998'' and inserting ``1999''; in line 23, by striking
``1998'' and inserting ``1999''; after line 23, by inserting the following:
``Sec. 6. K.S.A. 1999 Supp. 65-2837 is hereby amended to read as follows: 65-2837. As
used in K.S.A. 65-2836, and amendments thereto, and in this section:
(a) ``Professional incompetency'' means:
(1) One or more instances involving failure to adhere to the applicable standard of care
to a degree which constitutes gross negligence, as determined by the board.
(2) Repeated instances involving failure to adhere to the applicable standard of care to
a degree which constitutes ordinary negligence, as determined by the board.
(3) A pattern of practice or other behavior which demonstrates a manifest incapacity or
incompetence to practice medicine.
(b) ``Unprofessional conduct'' means:
(1) Solicitation of professional patronage through the use of fraudulent or false adver-
tisements, or profiting by the acts of those representing themselves to be agents of the
licensee.
(2) Representing to a patient that a manifestly incurable disease, condition or injury can
be permanently cured.
(3) Assisting in the care or treatment of a patient without the consent of the patient,
the attending physician or the patient's legal representatives.
(4) The use of any letters, words, or terms, as an affix, on stationery, in advertisements,
or otherwise indicating that such person is entitled to practice a branch of the healing arts
for which such person is not licensed.
(5) Performing, procuring or aiding and abetting in the performance or procurement
of a criminal abortion.
(6) Willful betrayal of confidential information.
(7) Advertising professional superiority or the performance of professional services in a
superior manner.
(8) Advertising to guarantee any professional service or to perform any operation
painlessly.
(9) Participating in any action as a staff member of a medical care facility which is
designed to exclude or which results in the exclusion of any person licensed to practice
medicine and surgery from the medical staff of a nonprofit medical care facility licensed in
this state because of the branch of the healing arts practiced by such person or without just
cause.
(10) Failure to effectuate the declaration of a qualified patient as provided in subsection
(a) of K.S.A. 65-28,107, and amendments thereto.
(11) Prescribing, ordering, dispensing, administering, selling, supplying or giving any
amphetamines or sympathomimetic amines, except as authorized by K.S.A. 65-2837a, and
amendments thereto.
(12) Conduct likely to deceive, defraud or harm the public.
(13) Making a false or misleading statement regarding the licensee's skill or the efficacy
or value of the drug, treatment or remedy prescribed by the licensee or at the licensee's
direction in the treatment of any disease or other condition of the body or mind.
(14) Aiding or abetting the practice of the healing arts by an unlicensed, incompetent
or impaired person.
(15) Allowing another person or organization to use the licensee's license to practice
the healing arts.
(16) Commission of any act of sexual abuse, misconduct or exploitation related to the
licensee's professional practice.
(17) The use of any false, fraudulent or deceptive statement in any document connected
with the practice of the healing arts including the intentional falsifying or fraudulent altering
of a patient or medical care facility record.
(18) Obtaining any fee by fraud, deceit or misrepresentation.
(19) Directly or indirectly giving or receiving any fee, commission, rebate or other com-
pensation for professional services not actually and personally rendered, other than through
the legal functioning of lawful professional partnerships, corporations or associations.
(20) Failure to transfer patient records to another licensee when requested to do so by
the subject patient or by such patient's legally designated representative.
(21) Performing unnecessary tests, examinations or services which have no legitimate
medical purpose.
(22) Charging an excessive fee for services rendered.
(23) Prescribing, dispensing, administering, distributing a prescription drug or sub-
stance, including a controlled substance, in an excessive, improper or inappropriate manner
or quantity or not in the course of the licensee's professional practice.
(24) Repeated failure to practice healing arts with that level of care, skill and treatment
which is recognized by a reasonably prudent similar practitioner as being acceptable under
similar conditions and circumstances.
(25) Failure to keep written medical records which accurately describe the services
rendered to the patient, including patient histories, pertinent findings, examination results
and test results.
(26) Delegating professional responsibilities to a person when the licensee knows or has
reason to know that such person is not qualified by training, experience or licensure to
perform them.
(27) Using experimental forms of therapy without proper informed patient consent,
without conforming to generally accepted criteria or standard protocols, without keeping
detailed legible records or without having periodic analysis of the study and results reviewed
by a committee or peers.
(28) Prescribing, dispensing, administering or distributing an anabolic steroid or human
growth hormone for other than a valid medical purpose. Bodybuilding, muscle enhancement
or increasing muscle bulk or strength through the use of an anabolic steroid or human growth
hormone by a person who is in good health is not a valid medical purpose.
(29) Referring a patient to a health care entity for services if the licensee has a significant
investment interest in the health care entity, unless the licensee informs the patient in
writing of such significant investment interest and that the patient may obtain such services
elsewhere.
(30) Failing to properly supervise, direct or delegate acts which constitute the healing
arts to persons who perform professional services pursuant to such licensee's direction,
supervision, order, referral, delegation or practice protocols.
(31) Violating K.S.A. 65-6703 and amendments thereto.
(c) ``False advertisement'' means any advertisement which is false, misleading or de-
ceptive in a material respect. In determining whether any advertisement is misleading, there
shall be taken into account not only representations made or suggested by statement, word,
design, device, sound or any combination thereof, but also the extent to which the adver-
tisement fails to reveal facts material in the light of such representations made.
(d) ``Advertisement'' means all representations disseminated in any manner or by any
means, for the purpose of inducing, or which are likely to induce, directly or indirectly, the
purchase of professional services.
(e) ``Licensee'' for purposes of this section and K.S.A. 65-2836, and amendments
thereto, shall mean all persons issued a license, permit or special permit pursuant to article
28 of chapter 65 of the Kansas Statutes Annotated.
(f) ``License'' for purposes of this section and K.S.A. 65-2836, and amendments thereto,
shall mean any license, permit or special permit granted under article 28 of chapter 65 of
the Kansas Statutes Annotated.
(g) ``Health care entity'' means any corporation, firm, partnership or other business
entity which provides services for diagnosis or treatment of human health conditions and
which is owned separately from a referring licensee's principle practice.
(h) ``Significant investment interest'' means ownership of at least 10% of the value of
the firm, partnership or other business entity which owns or leases the health care entity,
or ownership of at least 10% of the shares of stock of the corporation which owns or leases
the health care entity.'';
And by renumbering sections accordingly;
Also on page 11, in line 24, by striking ``1998'' and inserting ``1999''; also in line 24, after
``65-2836,'' by inserting ``65-2837, 65-2837b,'';
In the title, in line 13, after the semicolon, by inserting: ``concerning licensure of certain
persons;''; in line 14, by striking ``1998'' and inserting ``1999''; in line 15, after ``65-2836,''
by inserting ``65-2837,''; in line 16, before the period, by inserting: ``; also repealing K.S.A.
1999 Supp. 65-2837b'';
\ And your committee on conference recommends the adoption of this report.
Garry Boston
Gerald G. Geringer
Jerry Henry Conferees on the part of House
Sandy Praeger
Larry D. Salmans
Chris Steineger Conferees on part of Senate
On motion of Rep. Geringer, the conference committee report on SB 190 was adopted.
On roll call, the vote was: Yeas 122; Nays 1; Present but not voting: 0; Absent or not
voting: 2.
MOTIONS TO CONCUR AND NONCONCUR
On motion of Rep. Wilk, the House concurred in Senate amendments to HB 2570, An
act concerning organization of public safety agencies; establishing the task force on consol-
idation of public safety agencies. (The House requested the Senate to return the bill, which
was in conference).
On roll call, the vote was: Yeas 121; Nays 2; Present but not voting: 0; Absent or not
voting: 2.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate amend-
ments to Substitute for HB 2144, submits the following report:
The House accedes to all Senate amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:
On page 1, by striking all in lines 20 through 43;
By striking all on pages 2, 3 and 4; on page 5, by striking all in lines 1 through 41; in line
42, by striking ``New Sec. 6.'' and inserting ``Section 1.''; also in line 42, after ``(a)'' by inserting
``As used in this section, terms have the meanings provided by K.S.A. 79-3401, and amend-
ments thereto.
(b)'';
On page 6, in line 3, by striking all before ``motor-vehicle'' and inserting ``(c) No''; in
line 4, by striking ``service station'' and inserting ``distributor or retailer''; in line 5, by striking
``0.5%'' and inserting ``2%''; also in line 5, by striking all after the period and inserting ``No'';
in line 7, by striking ``0.5%'' and inserting ``2%''; in line 9, by striking all before ``motor-
vehicle'' and inserting ``(d) The''; in line 14, by striking all before ``notice'' and inserting
``(e) A''; in line 22, by striking ``(e) and inserting ``(f)''; in line 25, by striking ``(f)'' and
inserting ``(g)''; in line 28, by striking ``(g)'' and inserting ``(h)''; after line 43, by inserting:
``(i) It shall be an affirmative defense in any proceeding against a distributor or retailer
under subsection (h), and in any other action or proceeding against a distributor or retailer
arising out of the sale or furnishing of motor-vehicle fuel with an MTBE content in excess
of 2%, that the invoices, bills of lading, shipping papers or other documentation of the sale
or furnishing of motor-vehicle fuel provided to the distributor or retailer for the three
months preceding the alleged violation show the MTBE content of such motor-vehicle fuel
to be 2% or less.'';
On page 7, in line 1, by striking ``(h)'' and inserting ``(j)''; in line 5, by striking ``(i)'' and
inserting ``(k)''; also in line 5, after ``until'' by inserting ``24 months after''; by striking all in
lines 9 and 10 and inserting:
``Sec. 2. (a) Subject to the limitations of this section, whenever it appears that the re-
sources in any fiscal year commencing after June 30, 2000, are insufficient to meet in full
the estimated expenditures as they become due to meet duties imposed by law on the water
marketing fund of the Kansas water office as a result of increases in water rates, fees or
charges imposed by the federal government, the pooled money investment board is au-
thorized and directed to loan to the director of the Kansas water office sufficient funds to
reimburse the water marketing fund for increases in water rates, fees or charges imposed
by the federal government, and to allow the Kansas water office to spread such increases
to consumers over a longer period, except that no such loan shall be made unless the terms
thereof have been approved by the director of the budget. The pooled money investment
board is authorized and directed to use any moneys in the operating accounts, investment
accounts or other investments of the state of Kansas to provide the funds for such loan.
Each such loan shall bear interest at a rate equal to the interest rate being paid on state
inactive account moneys at the time of the making of such loan. Such loan shall not be
deemed to be an indebtedness or debt of the state of Kansas within the meaning of section
6 of article 11 of the constitution of the state of Kansas.
(b) Upon certification by the pooled money investment board by the director of the
Kansas water office of the amount of each loan authorized pursuant to subsection (a), the
pooled money investment board shall transfer each such amount certified by the director
of the Kansas water office from the state bank account or accounts prescribed in subsection
(a) to the water marketing fund of the Kansas water office.
(c) The principal and interest of each loan authorized pursuant to subsection (a) shall
be repaid in payments payable at least annually for a period of not more than five years.
(d) The aggregate outstanding balance of all loans pursuant to this section shall not
exceed $1,000,000 at any one time.'';
By renumbering section 8 as section 3;
In the title, in line 12, by striking ``sales of'' and inserting ``certain acts with respect to'';
in line 14, by striking all after the semicolon; by striking all in lines 15 and 16; in line 17,
by striking ``sections'' and inserting ``authorizing certain loans to the Kansas water office for
use related to water marketing'';
And your committee on conference recommends the adoption of this report.
David R. Corbin
Stephen R. Morris
Donald E. Biggs Conferees on the part of Senate
Joann Freeborn
Gerry Ray
Melvin Minor Conferees on part of House
On motion of Rep. Freeborn to adopt the conference committee report on Sub. HB 2144, Rep. Sloan offered a substitute motion to not adopt the conference committee report
and asked that a new conference committee be appointed. The substitute motion prevailed.
Speaker pro tem Mays thereupon appointed Reps. Freeborn, Ray and Minor as second
conferees on the part of the House.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate amend-
ments to Substitute for HB 2683, submits the following report:
The House accedes to all Senate amendments to the substitute bill and the committee
further agrees to amend the substitute bill as printed with Senate Committee amendments
as follows;
On page 1, in line 22, by striking ``New'';
On page 2, by striking all in lines 21 through 43;
By striking all on pages 3 through 38;
On page 39, by striking all in lines 1 through 21; in line 22, by striking ``16'' and inserting
``2''; in line 23, by striking ``Kansas register'' and inserting ``statute book'';
And your committee on conference recommends the adoption of this report.
Tim Emert
John Vratil
Greta Goodwin Conferees on the part of Senate
Michael R. O'Neal
Tim Carmody
Janice L. Pauls Conferees on part of House
On motion of Rep. O'Neal, the conference committee report on Sub. HB 2683 was
adopted.
On roll call, the vote was: Yeas 123; Nays 0; Present but not voting: 0; Absent or not
voting: 2.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate amend-
ments to HB 2855, submits the following report:
The House accedes to all Senate amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:
On page 10, in line 35, by striking all after ``that''; by striking all in lines 36 through 40,
inclusive; in line 41, by striking all before the first comma and inserting ``any announced
conduct of two or more business entities, announced by an authorized agent of one such
business entity in which the combined annual gross sales of such business entities involved
exceed $500,000,000, will substantially lessen competition or tend to create a monopoly in
violation of this act'';
On page 11, in line 7, by striking all after ``(b)''; by striking all in lines 8 through 11,
inclusive; in line 12, by striking all before ``The'';
And your committee on conference recommends the adoption of this report.
Tim Emert
John Vratil
Greta Goodwin Conferees on the part of Senate
Michael R. O'Neal
Tim Carmody
Janice L. Pauls Conferees on part of House
On motion of Rep. O'Neal, the conference committee report on HB 2855 was adopted.
On roll call, the vote was: Yeas 124; Nays 0; Present but not voting: 0; Absent or not
voting: 1.
MOTIONS TO CONCUR AND NONCONCUR
On motion of Rep. Boston, the House nonconcurred in Senate amendments to HB 2814
and asked for a conference.
Speaker pro tem Mays thereupon appointed Reps. Boston, Geringer and Henry as con-
ferees on the part of the House.
On motion of Rep. Mason, the House nonconcurred in Senate amendments to HB 3019
and asked for a conference.
Speaker pro tem Mays thereupon appointed Reps. Mason, Vickrey and Kuether as con-
ferees on the part of the House.
On motion of Rep. Weber, the House went into Committee of the Whole, with Rep.
Mays in the chair.
COMMITTEE OF THE WHOLE
On motion of Rep. Weber, Committee of the Whole report, as follows, was adopted:
Recommended that committee report recommending a substitute bill to H. Sub. for SB 219 be adopted; and the substitute bill be passed.
INTRODUCTION OF ORIGINAL MOTIONS
On emergency motion of Rep. Weber pursuant to House Rule 2311, H. Sub. for SB 219 was advanced to Final Action on Bills and Concurrent Resolutions.
FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS H. Sub. for SB 219, An act concerning the workers compensation act; amending K.S.A.
44-510c, 44-516, 44-519, 44-527, 44-557, 44-576, 44-5,104 and 44-5,122 and K.S.A. 1999
Supp. 44-501, 44-508, 44-510b, 44-510d, 44-531, 44-550b, 44-556, 44-557a, 44-567, 44-570,
44-5,120 and 44-5,125 and repealing the existing sections; also repealing K.S.A. 44-513 and
K.S.A. 1999 Supp. 44-501a and 44-510, was considered on final action.
On roll call, the vote was: Yeas 123; Nays 1; Present but not voting: 0; Absent or not
voting: 1.
On motion of Rep. Weber, the House recessed until 4:00 p.m.
______
Afternoon Session
The House met pursuant to recess with Speaker pro tem Mays in the chair.
INTRODUCTION OF ORIGINAL MOTIONS
On motion of Rep. Glasscock, pursuant to subsection (k) of Joint Rule 4 of the Joint Rules
of the Senate and House of Representatives, the rules were suspended for the purpose of
considering SB 574, 12; HR 6019.
INTRODUCTION OF ORIGINAL MOTIONS AND HOUSE RESOLUTIONS
On emergency motion of Rep. Garner, HR 6019, by Reps. Jennison and Garner, as follows,
was introduced and adopted:
HOUSE RESOLUTION No. 6019--
A RESOLUTION congratulating and commending the legislative interns for the Kansas
House of Representatives during the 2000 legislative session.
WHEREAS, Sixty persons have served as legislative interns for the Kansas House of Rep-
resentatives during the 2000 legislative session; and
WHEREAS, Most of the interns are college students who work at least two days a week
in nonpaid positions; and
WHEREAS, The interns have given their time and energy in providing needed research,
coordination, constituent services and office help in support of the legislative process and have
provided an invaluable service to their Representatives, the House of Representatives and the
State of Kansas; and
WHEREAS, The service which the interns have provided in support of the 2000 legislative
session deserves to be recognized: Now, therefore,
Be it resolved by the House of Representatives of the State of Kansas: That the members
of the Kansas House of Representatives recognize the contributions of and express their grat-
itude to the legislative interns who have worked during the 2000 legislative session and con-
gratulate and commend them for such service; and
Be it further resolved: That the Chief Clerk of the House of Representatives be directed
to provide an enrolled copy of this resolution to all legislative interns for the House of Rep-
resentatives during the 2000 legislative session.
MOTIONS TO CONCUR AND NONCONCUR
On motion of Rep. O'Neal, the House concurred in Senate amendments to S. Sub. for HB 2082, An act concerning administrative hearings; relating to the office of administrative
hearings; amending K.S.A. 75-37,121 and repealing the existing section. (The House requested
the Senate to return the bill, which was in conference).
On roll call, the vote was: Yeas 119; Nays 2; Present but not voting: 0; Absent or not voting:
4.
Absent or not voting: Ballou, Hayzlett, Johnston, Larkin.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House amendments
to SB 574, submits the following report:
The Senate accedes to all House amendments to the bill, and your committee on conference
further agrees to amend the bill, as printed with House Committee amendments, as follows:
On page 3, in line 9, by striking ``this act'' and inserting ``sections 1 through 4''; also in
line 9, following ``application'' by inserting ``thereof''; by striking lines 12 and 13 and inserting
new material to read as follows:
``New Sec. 6. Sections 1 through 5 shall be known as the Kansas discount card deceptive
practice act.
Sec. 7. K.S.A. 1999 Supp. 40-240 is hereby amended to read as follows: 40-240. (a) Any
person desiring as agent to engage in the insurance business, as herein set out, shall apply
to the commissioner of insurance of this state, in the manner hereinafter prescribed, for an
insurance agent's license, authorizing such agent to engage in and transact such business.
The applicant for such license shall file with the commissioner of insurance such applicant's
written application for a license authorizing the applicant to engage in the insurance business
and the applicant shall make sworn answers to such interrogatories as the commissioner of
insurance may require on uniform forms and supplements prepared by the commissioner.
A nonrefundable fee in the amount of $30 shall accompany such application. Such applicant,
if an individual, shall establish:
(1) That the applicant certifies, by evidence satisfactory to the commissioner, that the
applicant is a graduate of an accredited four-year high school or its equivalent. This require-
ment shall not apply to any person holding a valid agent's license as of July 1, 1971, or a
full-time student enrolled in an accredited high school in this state while and to the extent
such student is participating in an insurance project sponsored by a bona fide junior achieve-
ment program; and
(2) that the applicant is of good business reputation and is worthy of a license.
(b) Corporations, associations, partnerships, sole proprietorships and other legal entities
acting as insurance agents and holding a direct agency appointment from an insurance
company or companies or health maintenance organization are required to obtain an insur-
ance agent's license. Application for such license shall be made to the commissioner on a
form prescribed by such commissioner. Before granting the license, the commissioner shall
determine that:
(1) Each officer, director, partner and employee of the applicant who is acting as an
insurance agent is licensed as an insurance agent;
(2) the applicant has disclosed to the insurance department all officers, directors and
partners whether or not they are licensed as insurance agents;
(3) the applicant has disclosed to the insurance department all officers, directors, part-
ners and employees who are licensed as insurance agents; and
(4) the applicant has designated a licensed officer, employee, partner or other person
to be responsible for the organization's compliance with the insurance laws and rules and
regulations of this state.
(c) The insurance department may require any documents reasonably necessary to ver-
ify the information contained in the application.
(d) (1) Agents licensed pursuant to subsection (b) shall advise the commissioner of any
officers, directors, partners or employees who are licensed as individual insurance agents
and are not disclosed at the time application is made for a license within 30 working days
of their affiliation with the licensee. Failure to provide the commissioner with such infor-
mation shall subject the licensee to a monetary penalty of $10 per day for each working day
the required information is late subject to a maximum of $50 per person per licensing year.
(2) Officers, directors, partners or employees disclosed at the time of the original ap-
plication or reported thereafter whose affiliation with the licensee is terminated shall be
reported to the commissioner within 30 days of the effective date of termination. Failure
to report such termination shall subject the licensee to the penalty prescribed in paragraph
(1) of this subsection.
(e) An applicant whose application for a license is denied shall be given an opportunity for a hearing in accordance with the provisions of the Kansas administrative procedure act.
Sec. 8. K.S.A. 1999 Supp. 40-2c01 is hereby amended to read as follows: 40-2c01. As
used in this act:
(a) ``Adjusted RBC report'' means an RBC report which has been adjusted by the com-
missioner in accordance with K.S.A. 1999 Supp. 40-2c04, and amendments thereto.
(b) ``Corrective order'' means an order issued by the commissioner specifying corrective
actions which the commissioner has determined are required to address a RBC level event.
(c) ``Domestic insurer'' means any insurance company or risk retention group which is
licensed and organized in this state.
(d) ``Foreign insurer'' means any insurance company or risk retention group not dom-
iciled in this state which is licensed or registered to do business in this state pursuant to
article 41 of chapter 40 of the Kansas Statutes Annotated or K.S.A. 40-209, and amendments
thereto.
(e) ``NAIC'' means the national association of insurance commissioners.
(f) ``Life and health insurer'' means any insurance company licensed under article 4 or
5 of chapter 40 of the Kansas Statutes Annotated or a licensed property and casualty insurer
writing only accident and health insurance.
(g) ``Property and casualty insurer'' means any insurance company licensed under arti-
cles 9, 10, 11, 12, 12a, 15 or 16 of chapter 40 of the Kansas Statutes Annotated, but shall
not include monoline mortgage guaranty insurers, financial guaranty insurers and title
insurers.
(h) ``Negative trend'' means, with respect to a life and health insurer, a negative trend
over a period of time, as determined in accordance with the ''trend test calculation`` included
in the RBC instructions defined in subsection (j).
(i) ``RBC'' means risk-based capital.
(j) ``RBC instructions'' mean the risk-based capital instructions promulgated by the
NAIC, which are in effect on December 31, 19981999, and adopted as rules and regulations by the commissioner.
(k) ``RBC level'' means an insurer's company action level RBC, regulatory action level
RBC, authorized control level RBC, or mandatory control level RBC where:
(1) ``Company action level RBC'' means, with respect to any insurer, the product of 2.0
and its authorized control level RBC;
(2) ``regulatory action level RBC'' means the product of 1.5 and its authorized control
level RBC;
(3) ``authorized control level RBC'' means the number determined under the risk-based
capital formula in accordance with the RBC instructions; and
(4) ``mandatory control level RBC'' means the product of .70 and the authorized control
level RBC.
(l) ``RBC plan'' means a comprehensive financial plan containing the elements specified
in K.S.A. 1999 Supp. 40-2c06, and amendments thereto. If the commissioner rejects the
RBC plan, and it is revised by the insurer, with or without the commissioner's recommen-
dation, the plan shall be called the ``revised RBC plan.''
(m) ``RBC report'' means the report required by K.S.A. 1999 Supp. 40-2c02, and
amendments thereto.
(n) ``Total adjusted capital'' means the sum of:
(1) An insurer's capital and surplus or surplus only if a mutual insurer; and
(2) such other items, if any, as the RBC instructions may provide.
(o) ``Commissioner'' means the commissioner of insurance.
New Sec. 9. As used in this act:
(a) ``Attorney-in-fact'' means the person designated and authorized by subscribers as hav-
ing authority to obligate them on reciprocal insurance contracts.
(b) ``Commissioner'' means the commissioner of insurance.
(c) ``Person'' means any association, aggregate of individuals, business, company, cor-
poration, individual, joint-stock company, Lloyds-type of organization, organization, coop-
erative, partnership, receiver, trustee or society, with power to enter into contractual un-
dertakings within or without the state.
(d) ``Reciprocal'' means an aggregation of subscribers under a common name.
(e) ``Reciprocal insurance'' means insurance resulting from the mutual exchange of in-
surance contracts among persons in an unincorporated association under a common name
through an attorney-in-fact having authority to obligate each person both as insured and
insurer.
(f) ``Subscriber'' means a person obligated under a reciprocal insurance agreement.
New Sec. 10. Every reciprocal shall have and use a business name that includes the
word ``reciprocal,'' ``interinsurer,'' ``interinsurance,'' ``exchange,'' ``underwriters'' or ``under-
writing.'' The name of the reciprocal shall not be so similar to any other name or title
previously adopted by a similar organization, or by any other insurance company or asso-
ciation, as in the opinion of the commissioner of insurance is calculated to result in confusion
or deception.
New Sec. 11. The board of directors exercising the subscribers' rights in a domestic
reciprocal shall be selected under rules adopted by the subscribers. At least 3/4 of the board
of directors of a domestic reciprocal shall be composed of subscribers or representatives of
subscribers, other than the attorney-in-fact or any person employed by, representing or
having a financial interest in the attorney-in-fact. An individual shall not be considered to
be employed by, representing or having a financial interest in the attorney-in-fact if such
individual is a subscriber or a representative of a subscriber of the reciprocal. The board of
directors shall supervise the finances of the reciprocal and the reciprocal's operations to the
extent required to assure their conformity with the subscriber's agreement and power of
attorney and shall exercise any other powers conferred on it by the subscriber's agreement.
The board of directors may also be referred to as a subscribers advisory committee, board
of trustees or by such other name as the board chooses.
New Sec. 12. (a) Every subscriber of a domestic reciprocal may execute a subscriber's
agreement and power of attorney setting forth the rights, privileges and obligations of the
subscriber as an underwriter and as a policyholder, and the powers and duties of the attor-
ney-in-fact. If a domestic reciprocal does not require execution of a subscriber's agreement
and power of attorney, the reciprocal shall include on its policies a statement that the
subscriber shall be bound by the terms and conditions of the then current subscriber's
agreement and power of attorney on file with the attorney-in-fact and the commissioner of
insurance, and each subscriber shall by operation of law be bound by such subscriber's
agreement and power of attorney as if individually executed. Without additional execution,
notice or acceptance, every subscriber of a reciprocal agrees to be bound by any modification
of the terms of the power of attorney and subscriber's agreement which is jointly made by
the attorney-in-fact and the board of directors pursuant to K.S.A. 40-1616, and amendments
thereto, and which shall be on file with the attorney-in-fact and the commissioner of insur-
ance. The subscriber's agreement and power of attorney shall contain in substance the
following provisions:
(1) A designation and appointment of the attorney-in-fact to act for and bind the sub-
scriber in all transactions relating to or arising out of the operations of the reciprocal;
(2) a provision empowering the attorney-in-fact:
(A) To accept service of process on behalf of the reciprocal; and
(B) to appoint the commissioner as an agent of the reciprocal upon whom may be served
all lawful process against or notice to the reciprocal; and
(3) the maximum amount to be deducted from advance premiums or deposits to be
paid the attorney-in-fact, and the items of expense, in addition to losses, to be paid by the
reciprocal.
(b) The subscriber's agreement may:
(1) Provide for the right of substitution of the attorney-in-fact and revocation of the
power of attorney;
(2) impose any restrictions upon the exercise of the power agreed upon by the
subscribers;
(3) provide for the exercise of any right reserved to the subscribers directly or through
the board of directors; or
(4) contain other lawful provisions deemed to be advisable.
New Sec. 13. Any modification of the terms of the power of attorney and subscriber's
agreement of a domestic reciprocal shall be made jointly by the attorney-in-fact and the
board of directors. Any such modification shall be filed with the attorney-in-fact and the
commissioner of insurance. By operation of law any such filing shall bind all subscribers the
same as if each subscriber individually had adopted and executed the modified, altered or
amended subscriber's agreement and power of attorney. No modification shall be effective
retroactively, nor shall such modification affect any insurance contract issued prior to the
date of such modification.
New Sec. 14. A reciprocal may return to its subscribers any savings or credit which
accrues to such subscriber's accounts.
New Sec. 15. Upon the liquidation of a domestic reciprocal, the assets remaining after
discharge of its indebtedness and policy obligations, the return of any contributions of the
attorney-in-fact or any other person made as provided in K.S.A. 40-1606, and amendments
thereto, and the return of any unused deposits, savings or credits, shall be distributed. The
distribution shall be made to the persons who were its subscribers within the 12 months
prior to the final termination of such reciprocal's license in accordance with a formula
approved by the commissioner of insurance or the court.
New Sec. 16. No reciprocal shall issue any assessable insurance policies. The subscribers
of a reciprocal shall not be personally liable for the payment of the reciprocal's debts or
obligations. Any judgment against a reciprocal shall be binding only upon the reciprocal and
not upon each of the reciprocal's subscribers.
Sec. 17. K.S.A. 40-1601 is hereby amended to read as follows: 40-1601. Individuals, partnerships and corporationsPersons of this state, hereby designated subscribers, are
hereby authorized to exchange reciprocal or interinsurance contracts with each other, or
with individuals, partnerships and corporationspersons of other states and countries, pro-
viding indemnity among themselves from any loss which may be the subject of legal insur-
ance, excepting life insurance.
Sec. 18. K.S.A. 40-1602 is hereby amended to read as follows: 40-1602. SuchReciprocal insurance contracts may be executed by an attorney in fact, herein designated attorney attorney-in-fact, duly authorized and acting for suchthe subscribers of a reciprocal, and
such attorneyattorney-in-fact may be a corporation. The office or offices of such attorney attorney-in-fact may be maintained at such place or places as may be designated by the
subscribers in the power of attorney. Such contracts and the exchange thereof and such subscribers, their attorneys and representatives shall be regulated by this article and by no other law relating to insurance unless such law is referred to in this article, and no law hereafter enacted shall apply to them unless they be expressly designated therein.
Sec. 19. K.S.A. 40-1603 is hereby amended to read as follows: 40-1603. Such attorney (a) The attorney-in-fact of a domestic reciprocal shall file with the commissioner of insur-
ance of this state a declaration verified by the oath of such attorneyattorney-in-fact, or
when such attorneyattorney-in-fact is a corporation by the oath of a chief officer thereof,
setting forth:
(a)(1) The name of the attorneyattorney-in-fact, and the name or title of the office under which such contracts are to be issued. Said name or title shall not be so similar to any other name or title previously adopted by a similar organization, or by any insurance company or association, as in the opinion of the commissioner of insurance is calculated to result in confusion or deception. The office or offices through which such indemnity con- tracts shall be exchanged shall be classified as reciprocal or interinsurance exchangesof the domestic reciprocal.
(b)(2) The kind or kinds of insurance to be effected or exchanged.
(c) A copy of the form of policy contract or agreement under or by which such insurance is to be effected or exchanged and which comprises the standard provisions, as provided in the law of this state. Such contract or agreement shall, in lieu of complying with the language and form prescribed, be held to conform thereto in substance if such contract or agreement includes a provision or endorsement reciting that the policy shall be construed as if in the language and form prescribed by law. The attorney may insert in the policy prescribed by the laws of this state any provision or condition which is required by the plan of reciprocal or interinsurance.
(d)(3) A copy of the form of power of attorney and subscriber's agreement or other
authority of such attorneyattorney-in-fact under which such insurance is to be effected or
exchanged.
(e)(4) The location of the office or offices from which such contracts or agreements
are to be issued.
(f)(5) That except as to the kinds of insurance hereinafter specifically mentioned in this
subdivision, applications shall have been made for indemnity upon at least one hundred100
separate risks aggregating not less than one and one-half million dollars$1,500,000, rep-
resented by executed contracts or bona fide applications to become concurrently effective.
In the case of employers' liability or workmen'sworkers compensation insurance, applica-
tions shall have been made for indemnity upon at least one hundred100 separate risks,
covering a total annual payroll of not less than two and one-half million dollars$2,500,000,
as represented by executed contracts or bona fide applications to become concurrently
effective. In the case of automobile insurance, applications shall have been made for indem- nity upon at least one thousand motor vehicles, represented by executed contracts or bona fide applications to become concurrently effective on any or all classes of automobile in- surance effected by such subscribers through said attorney.
(g)(6) That there is in the possession of such attorneyattorney-in-fact, and available
for the payment of losses, assets conforming to the requirements of section 40-1605 hereof K.S.A. 40-1605 and amendments thereto.
(h)(7) A financial statement in form prescribed for the annual statement.
(i)(8) An instrument authorizing service of process as provided in this article.
(b) No declaration shall be required under this section for any reciprocal organized in this state as a result of a conversion under the provisions of K.S.A. 40-1620 and amendments thereto.
Sec. 20. K.S.A. 40-1604 is hereby amended to read as follows: 40-1604. There shall be
filed with the commissioner of insurance of this state a statement under oath by the attorney attorney-in-fact giving the maximum amount of indemnity upon any single risk, and such attorney shallattorney-in-fact, whenever and as often as hesuch attorney-in-fact shall be
required, shall file with the commissioner of insurance a statement verified by hissuch attorney-in-fact's oath, to the effect that the exchangereciprocal has not assumed on any
one risk an amount greater than ten (10) percentum10% of its surplus, unless the excess
shall be reinsured (1) in some other insurance company duly authorized to transact similar
business in this state or as otherwise provided in the insurance code; or (2) as provided by
the laws of the state in which the principal office of the attorneyreciprocal is located.
Sec. 21. K.S.A. 40-1605 is hereby amended to read as follows: 40-1605. There shall be maintained at all times, unearned premiums or(a) At all times, each reciprocal shall maintain the same unearned premium and loss or claim reserves, in cash or securities authorized by
the laws of the state in which the principal office of the attorney is located, for the investment of similar funds of insurance companies doing the same kind of business, in an amount equal to a pro rata amount of the premium or deposits collected from subscribers on all unexpired risks. In addition to the assets previously provided in this section there shall also be main- tained as a claim or loss reserve, cash or such securities sufficient to discharge all liability on all outstanding losses arising under policies issued, the same to be calculated in accord- ance with the laws of the state relating to similar reserves for companies insuring similar risks. Any reciprocal exchangethe reciprocal is domiciled, as required for domestic stock and mutual companies writing the same classes of insurance.
(b) No reciprocal shall be licensed to transact the business of insurance in this state unless such reciprocal shall have and maintain a surplus equal to the capital and surplus
required of a domestic stock insurance company transacting the same kinds of insurance and may provide for the issuance of a nonassessable policy. Any reciprocal exchange issuing nonassessable policies
(c) Each reciprocal shall have lawful securities on deposit, for the protection of all
subscribers or creditors, or both, of the exchangereciprocal, with the department of insur-
ance of this or any other state in the United States in an amount equal to the minimum
capital stock required of a domestic stock insurance company transacting the same kinds of
insurance. Until May 1, 1989, companies which were authorized to do business in Kansas after January 1, 1969, but before January 1, 1984, shall be required to have surplus and deposit equal to that which was required by this section prior to the passage of this act. After May 1, 1989, such companies shall comply with the paid-up capital stock, surplus and deposit requirements provided by this act.
Until May 1, 1989, companies doing business in this state on January 1, 1969, shall be required to have a surplus and deposit equal to that required of such companies prior to the passage of this act. On and after May 1, 1989, companies doing business in this state on January 1, 1969, shall be required to have a surplus and deposit equal to that required of all other companies to whom this section applies immediately prior to the passage of this act.
On and after May 1, 1994, companies doing business in this state on January 1, 1969, shall comply with the surplus and deposit requirements provided by this act.
No reciprocal exchange shall issue any assessable insurance policies.
Sec. 22. K.S.A. 40-1606 is hereby amended to read as follows: 40-1606. If at any time
it appears that the amount of funds required in section 40-1605K.S.A. 40-1605, and amend- ments thereto, has not been accumulated or maintained, then the subscribers or their at- torney for them shall immediately advance such sums as are needed to comply with the provisions of this section, and theattorney-in-fact or any other interested party may advance to a reciprocal any funds required in such reciprocal's operations. The funds so advanced
shall not be treated as a liability at the exchange, and shall not be withdrawnof the reciprocal and interest shall not be paid or funds repaid except with the approval of the supervising
insurance official of the state wherein the exchange is domiciled, and such advancesin which the reciprocal is domiciled. Any such advance and interest shall be repaid only out of the
surplus funds of the exchangereciprocal.
Sec. 23. K.S.A. 40-1607 is hereby amended to read as follows: 40-1607. Concurrently
with the filing of the declaration provided for by the terms of K.S.A. 40-1603 and any
amendments thereto, the attorneyattorney-in-fact shall file with the commissioner of in-
surance an instrument in writing, executed by himsuch attorney-in-fact for the subscribers reciprocal conditioned that upon the issuance of the certificate of authority provided for in
K.S.A. 40-1610, and amendments thereto, service of process may be had upon the commis-
sioner of insurance in all suits in this state arising out of such policies, contracts or agree-
ments, which service shall be valid and binding upon all subscribers exchanging at any time reciprocal or interinsurance contracts through such attorney. Three copies of such process shall be served, accompanied by a fee of three dollars, and shall require the defendant to answer by a certain day, not less than forty days from its date, and the commissioner of insurance shall file one copy, forward one copy to the said attorney, and return one copy with his admission of service. Subscribers of any reciprocal or interinsurance exchangethe reciprocal. Such service of process shall be executed in accordance with the provisions of K.S.A. 40-218 and amendments thereto. Any reciprocal operating under the laws of this
state may sue or be sued in the declared name of such exchangethe reciprocal.
Sec. 24. K.S.A. 40-1608 is hereby amended to read as follows: 40-1608. The attorney in factattorney-in-fact of a reciprocal, or any employee having the care and handling of the
funds and securities of any reciprocal exchangea reciprocal, shall givemaintain a good and
sufficient bond running to the governing committeeboard of directors of the reciprocal
conditioned for the faithful accounting and disbursement of all money that may come into hissuch attorney-in-fact's or employee's hands; such bond may be executed by a surety
company or may be a personal bond approved by the commissioner of insurance of the state where such exchange is domiciled; and such bond to. Such bond shall be in an amount fixed in an amount and to be approved by the advisory committeeboard of directors or other
governing body of such exchangereciprocal. In lieu of filing the bond, the attorney-in-fact may maintain on deposit with the commissioner an equivalent amount in approved securities which are subject to the same conditions as the bond.
Sec. 25. K.S.A. 40-1610 is hereby amended to read as follows: 40-1610. Each attorney by whom or through whom are issued any policies of or contracts for indemnity of the character specified in this articlereciprocal shall procure from the commissioner of insur- ance annually a certificate of authority, stating that all of the requirements of this article
have been complied with, and upon. Upon such compliance and the payment of the fees
required by this article, the commissioner of insurance shall issue such certificate of au-
thority. The commissioner of insurance may revoke or suspend any certificate of authority
issued hereunder in case of breach of any of the conditions imposed by this article after
reasonable notice has been given said attorney,to the reciprocal in writing, so that hesuch reciprocal may appear and show cause why such action should not be taken. Any attorney who may have procured a certificate of authority hereunder may renew such certificate annually thereafter: Provided, however, That anyThe certificate of authority shall continue
in full force and effect until such certificate is suspended or revoked orthea new certificate
of authority beis issued or specifically refused.
Sec. 26. K.S.A. 40-1611 is hereby amended to read as follows: 40-1611. Such attorney Each reciprocal shall pay to the commissioner of insurance levies and taxes in the amount
and as specified in K.S.A. 40-252, 40-1703, 40-1704 and 75-1508, and amendments thereto. The premium taxes which are set out in subsection 3, of subsection B, of K.S.A. 40-252 , for mutual insurance companies organized under the laws of any other state, territory or country writing similar lines of insurance, shall be applicable to such attorney-in-fact of a reciprocal or interinsurance exchange doing business or seeking authority to do business in this state. All such levies and taxes on premiums shall be applicable to premiums received
on or after January 1, 1957. The above fees, levies and taxes shall be in lieu of all license
fees and taxes of whatever character in this state and such attorney-in-fact in calculating all
such levies and taxes such reciprocal shall be permitted to deduct therefrom premiums
returned on account of cancellations, all premiums received for reinsurance from any other
company authorized to do business in this state, and savings paid or credited to subscriber
policyholders.
Sec. 27. K.S.A. 40-1612 is hereby amended to read as follows: 40-1612. In addition to
the laws hereinbefore referred to inprovisions of this article, the requirements and provi-
sions set outforth in the following sections of articles 2 and 20 of the Kansas Statutes
Annotated, or anyand amendments thereto, which govern other types of insurance com-
panies shall apply to reciprocal or interinsurance exchangesreciprocals to the extent that such provisions do not conflict with the provisions of this article: Sections 40-208, 40-209,
40-214, 40-215, 40-216, 40-218, 40-220, 40-22140-221a, 40-222, 40-223, 40-224, 40-225, 40-226, 40-227, 40-228, 40-229, 40-229a, 40-231, 40-233, 40-234, 40-234a, 40-235, 40-236,
40-237, 40-238, 40-239, 40-240, 40-241, 40-242, 40-243, 40-244, 40-245, 40-246 except as
to contracts written through traveling salaried representatives to whom no commissions are
paid, 40-246a, 40-247, 40-248, 40-249, 40-250, 40-251, 40-253, 40-254, 40-256, 40-281, 40- 2,125, 40-2,126, 40-2,127, 40-2,128, 40-2,156, 40-2,156a, 40-2,157, 40-2,159, 40-952, 40-
2001, 40-2002, 40-2003, 40-2004, 40-2005 and 40-2006. All of the requirements, provisions and regulations set out in the foregoing sections of articles 2 and 20 and which apply to insurance companies are hereby made to apply to reciprocal or interinsurance exchanges and such reciprocal or interinsurance exchanges shall comply with and be governed and regulated by the provisions of such foregoing sections, 40-2006 and 40-2404 and article 2a of the Kansas statutes annotated, and amendments thereto, and any other provision of law pertaining to insurance which specifically refers to reciprocals.
Sec. 28. K.S.A. 40-1613 is hereby amended to read as follows: 40-1613. Reciprocal or interinsurance exchanges may, pursuant toUnder authority given by the commissioner of insurance, a reciprocal may engage in the business of writing fidelity and surety bonds but
only upon the condition that such reciprocal or interinsurance exchangeshall have and
maintain aan amount of surplus equal to the total of capital and surplus required of domestic
stock insurance companies transacting the same kind of business and any such reciprocal or interinsurance exchange shall be deemed a stock insurance company for the purposes of sectionsK.S.A. 40-214, 40-239 to 40-247, both sections inclusive, 40-252, 40-1107 and 40-
1108 of the Kansas Statutes Annotated or anyand amendments thereto. No fidelity or surety
bond shall be issued by any such reciprocal or interinsurance exchange until the form thereof of such bond shall have been submitted to and accepted by the commissioner of insurance.
Any fidelity or surety bonds executed pursuant to this act shall be received and accepted as
company, corporation or corporate bonds.
Sec. 29. K.S.A. 1999 Supp. 40-1620 is hereby amended to read as follows: 40-1620. (a)
Any insurance company may convert to a Kansas insurance reciprocal in accordance with a
plan for the conversion of the insurance company into an insurance reciprocal filed with
and approved by the commissioner.
(b) The commissioner may establish reasonable requirements and procedures for the
submission and approval of a conversion plan authorized by subsection (a).
(c) No conversion plan shall be approved under this section unless such conversion plan
includes:
(1) A provision for the conversion of existing stockholder or policyholder interests in
the insurance company into reciprocal or exchange subscriber interests in the insurance
reciprocal so that each subscriber's interest in the resulting Kansas insurance reciprocal shall
be fairly proportionate to such subscriber's interest in the insurance company;
(2) a provision for the amendment of the insurance company's existing articles of in-
corporation or other chartering document to a subscriber's agreement which complies with
the provisions of K.S.A. 40-1602 and 40-1603, 40-1603 and section 12 and amendments
thereto;
(3) a copy of the proposed subscriber's agreement;
(4) proof of the approval or adoption of the conversion plan by not less than 75%2/3 of
the shares or policyholders entitled to vote, represented either in person or by proxy, at a
duly called regular or special meeting of the stockholders or policyholders of the insurance
company at which a quorum, as determined by the bylaws or other chartering documents
of the insurance company, is present:;
(5) a transition plan for the change of governance of the insurance company from the
board of directors and officer structure of the insurance company to the insurance reciprocal
which shall be governed by article 16 of chapter 40 of the Kansas Statutes Annotated and
amendments thereto; and
(6) any other information required by the commissioner.
(d) The commissioner shall approve the conversion plan if the commissioner finds that
the proposed conversion will:
(1) Not be detrimental to the interests of the stockholders or policyholders of the in-
surance company;
(2) not be detrimental to the interests of the state of Kansas; and
(3) not render the insurer incapable of fulfilling the insurer's contractual obligations.
(e) Upon approval of a conversion plan under this section, the commissioner shall issue
a new or amended certificate of authority, which shall be deemed to be the final act of
conversion at which time the insurance company shall concurrently become an insurance
reciprocal. The insurance reciprocal shall be deemed to be a continuation of the insurance
company and deemed to have been organized at the time the converted insurance company
was organized.
(f) Each insurance reciprocal created pursuant to this section shall comply with all pro-
visions of K.S.A. 40-1612, and amendments thereto.
(g) Any conversion of an insurance company to a reciprocal shall not be subject to the
provisions of K.S.A. 40-3304, and amendments thereto.
(h) For the purposes of this section:
(1) ``Commissioner'' means the commissioner of insurance.
(2), ``insurance company'' means a stock or mutual insurance company.
(3) ``Insurance reciprocal'' means a reciprocal or interinsurance exchange established to exchange reciprocal or interinsurance contracts with subscribers to provide indemnity among themselves.
Sec. 30. K.S.A. 1999 Supp. 40-1622 is hereby amended to read as follows: 40-1622.
The provisions of K.S.A. 1999 Supp. 40-1620 and 40-1621, and sections 9, 10, 11, 12, 13, 14, 15 and 16 and amendments thereto, shall be supplemental to article 16 of chapter 40
of the Kansas Statutes Annotated and amendments thereto.
Sec. 31. K.S.A. 1999 Supp. 40-3502 is hereby amended to read as follows: 40-3502. As
used in this act the following terms shall have the meanings respectively ascribed to them
herein:
(a) ``Mortgage guaranty insurance company'' means any corporation, company, associ-
ation, reciprocal exchange, persons or partnerships writing contracts of mortgage guaranty
insurance and shall be governed by the provisions of this act and the other provisions of
chapter 40 of the Kansas Statutes Annotated applicable to companies organized or operating
under the provisions of K.S.A. 40-1101 et seq., and amendments thereto, to the extent such
other provisions are not inconsistent with the requirements of this act.
(b) ``Mortgage guaranty insurance'' means and includes: (1) Insurance against financial
loss by reason of nonpayment of principal, interest or other sums agreed to be paid under
the terms of any note or bond or other evidence of indebtedness secured by a mortgage,
deed of trust, or other instrument constituting a lien or charge on real estate, when the
improvement on such real estate is a residential building or a condominium or townhouse
unit or buildings designed for occupancy by not more than four families;
(2) insurance against financial loss by reason of nonpayment of principal, interest or
other sums agreed to be paid under the terms of any note or bond or other evidence of
indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien
or charge on real estate, when the improvement on such real estate is a building or buildings
designed for occupancy by five or more families or designed to be occupied for industrial
or commercial purposes; or
(3) insurance against financial loss by reason of nonpayment of rent or other sums
agreed to be paid under the terms of a written lease for the possession, use or occupancy
of real estate, when the improvement on such real estate is a building or buildings designed
to be occupied for industrial or commercial purposes.
(c) ``Authorized real estate security'' means an amortized note, bond or other evidence
of indebtedness, not exceeding (97%)(100%) of the fair market value of the real estate,
secured by a mortgage, deed of trust, or other instrument which constitutes, or is equivalent
to, a first lien or charge on real estate, when: (1) The real estate loan secured in such manner
is one of a type which a bank, savings and loan association, or an insurance company, which
is supervised and regulated by a department of this state or an agency of the federal gov-
ernment, is authorized to make, or would be authorized to make, disregarding any require-
ment applicable to such an institution that the amount of the loan not exceed a certain
percentage of the value of the real estate;
(2) the improvement on such real estate is a building or buildings designed for occu-
pancy as specified by paragraphs (1) or (2) of subsection (b); and
(3) the lien on such real estate may be subject to and subordinate to the following:
(i) The lien of any public bond, assessment or tax, when no installment, call or payment
of or under such bond, assessment or tax is delinquent; and
(ii) outstanding mineral, oil, water or timber rights, rights-of-way, easements or rights-
of-way of support, sewer rights, building restrictions or other restrictions or covenants,
conditions or regulations of use, or outstanding leases upon such real property under which
rents or profits are reserved to the owner thereof.
(d) ``Contingency reserve'' means an additional premium reserve established to protect
policyholders against the effect of adverse economic cycles.
(e) ``Single risk'' means the insurance provided with respect to each separate loan or
lease covered by an individual policy of mortgage guaranty insurance or an individual cer-
tificate issued pursuant to K.S.A. 40-3511, and amendments thereto.
Sec. 32. K.S.A. 40-1601, 40-1602, 40-1603, 40-1604, 40-1605, 40-1606, 40-1607, 40-
1608, 40-1610, 40-1611, 40-1612, 40-1613 and 40-1614 and K.S.A. 1999 Supp. 40-240, 40-
2c01, 40-1620, 40-1622 and 40-3502 are hereby repealed.
Sec. 33. This act shall take effect and be in force from and after its publication in the
statute book.'';
In the title, in line 11, after ``cards'', by inserting ``; relating to licensure of agents; relating
to risk-based capital requirements; relating to reciprocal insurance companies; relating to
mortgage insurance guaranty companies; amending K.S.A. 40-1601, 40-1602, 40-1603, 40-
1604, 40-1605, 40-1606, 40-1607, 40-1608, 40-1610, 40-1611, 40-1612 and 40-1613 and
K.S.A. 1999 Supp. 40-240, 40-2c01, 40-1620, 40-1622 and 40-3502 and repealing the existing
sections; also repealing K.S.A. 40-1614'';
\ And your committee on conference recommends the adoption of this report.
Robert Tomlinson
Don Myers
Eber Phelps Conferees on the part of House
Don Steffes
Sandy Praeger
Paul Feleciano, Jr. Conferees on part of Senate
On motion of Rep. Tomlinson, the conference committee report on SB 574 was adopted.
On roll call, the vote was: Yeas 123; Nays 1; Present but not voting: 0; Absent or not
voting: 1.
CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House amend-
ments to SB 12, submits the following report:
The Senate accedes to all House amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with House Committee of the Whole
amendments, as follows:
On page 1, by striking all in lines 17 through 43;
By striking all on pages 2 through 4 and inserting the following:
``Section 1. K.S.A. 1999 Supp. 74-2433 is hereby amended to read as follows: 74-2433.
(a) There is hereby created a state board of tax appeals, referred to in this act as the board.
The board shall be composed of five members who shall be appointed by the governor,
subject to confirmation by the senate as provided in K.S.A. 75-4315b, and amendments
thereto. After January 15, 1999, three of such members shall: (1) Have been regularly
admitted to practice law in the state of Kansas; and (2) for a period of at least five years,
have engaged in the active practice of law as a lawyer, judge of a court of record or any
other court in this state, or as a certified public accountant who has maintained registration
as an active attorney with the Kansas supreme court, or any combination thereof. Except
as provided by K.S.A. 1999 Supp. 46-2601, no person appointed to the board shall exercise
any power, duty or function as a member of the board until confirmed by the senate. Not
more than three members of the board shall be of the same political party. Members of the
board shall be residents of the state. Subject to the provisions of K.S.A. 75-4315c, and
amendments thereto, one shall be appointed from each of the congressional districts of
Kansas and the remainder from the state at large. The members of the board shall be
selected with special reference to training and experience for duties imposed by this act and
shall be individuals with legal, accounting or appraisal training and experience. Members
shall be subject to the supreme court rules of judicial conduct applicable to all judges of
the district court. The board shall be bound by the doctrine of stare decisis limited to
published decisions of an appellate court other than a district court. Members shall hold
office for terms of four years and until their successors are appointed and confirmed. Such
terms of office shall expire on January 15 of the last year of such term. If a vacancy occurs
on the board, the governor shall appoint a successor to fill the vacancy for the unexpired
term. The governor shall select one of its members to serve as chairperson. The votes of
three members shall be required for any action to be taken by the board. Meetings may be
called by the chairperson and shall be called on request of a majority of the members of
the board and when otherwise prescribed by statute.
(b) Any member of the state board of tax appeals may be removed by the governor for
cause, after public hearing conducted in accordance with the provisions of the Kansas ad-
ministrative procedure act.
(c) The state board of tax appeals shall appoint, subject to approval by the governor, an
executive director of the board, to serve at the pleasure of the board. The executive director
shall: (1) Be in the unclassified service under the Kansas civil service act; (2) devote full
time to the executive director's assigned duties; (3) receive such compensation as determined
by the board, subject to the limitations of appropriations thereof; and (4) have familiarity
with the tax appeals process sufficient to fulfill the duties of the office of executive director.
The executive director shall perform such duties as directed by the board.
(d) Appeals decided by the state board of tax appeals which are deemed of sufficient
importance to be published shall be prepared and delivered to the director of printing, who shall as speedily as possible print and publish such number of copies as shall be specified published by the board.
(e) After appointment, members of the state board of tax appeals shall complete the
following course requirements: (1) A tested appraisal course of not less than 30 clock hours
of instruction consisting of the fundamentals of real property appraisal with an emphasis on
the cost and sales approaches to value; (2) a tested appraisal course of not less than 30 clock
hours of instruction consisting of the fundamentals of real property appraisal with an em-
phasis on the income approach to value; (3) a tested appraisal course of not less than 30
clock hours of instruction with an emphasis on mass appraisal; (4) an appraisal course with
an emphasis on Kansas property tax laws and; (5) an appraisal course on the techniques and
procedures for the valuation of state assessed properties with an emphasis on unit valuation;
and (6) a tested appraisal course on the techniques and procedures for the valuation of land
devoted to agricultural use pursuant to K.S.A. 79-1476, and amendments thereto. The ex-
ecutive director shall adopt rules and regulations prescribing a timetable for the completion
of the course requirements and prescribing continued education requirements for members
of the board.
(f) The state board of tax appeals shall have no capacity or power to sue or be sued.
Sec. 2. K.S.A. 1999 Supp. 74-2433f is hereby amended to read as follows: 74-2433f.
On and after January 1, 1999, (a) There shall be a division of the state board of tax appeals
known as the small claims division. Hearing officers appointed by the executive director
shall have authority to hear and decide cases heard in the small claims division.
(b) The small claims division shall have jurisdiction over hearing and deciding appli- cations for the refund of protested taxes under the provisions of K.S.A. 79-2005, and amend- ments thereto, and hearing and deciding appeals from decisions rendered pursuant to the provisions of K.S.A. 79-1448, and amendments thereto, and of article 16 of chapter 79 of the Kansas Statutes Annotated, and acts amendatory thereof or supplemental thereto, with regard to single-family residential property. The filing of an appeal with the small claims division shall be a prerequisite for filing an appeal with the state board of tax appeals for appeals involving single-family residential property.
(c) At the election of the taxpayer, the small claims division shall have jurisdiction over:
(1) Any appeal of a decision, finding, order or ruling of the director of taxation, except an
appeal, finding, order or ruling relating to an assessment issued pursuant to K.S.A. 79-5201 et seq., and amendments thereto, in which the amount of tax in controversy does not exceed
$15,000; (2) hearing and deciding applications for the refund of protested taxes under the
provisions of K.S.A. 79-2005, and amendments thereto, where the value of the property,
other than property devoted to agricultural use, is less than $2,000,000 as reflected on the
valuation notice or the property constitutes single family residential property; or (3) hearing
and deciding appeals from decisions rendered pursuant to the provisions of K.S.A. 79-1448,
and amendments thereto, and of article 16 or 17 of chapter 79 of the Kansas Statutes
Annotated, and acts amendatory thereof or supplemental thereto, other than those relating
to land devoted to agricultural use, wherein the value of the property is less than $2,000,000
as reflected on the valuation notice or the property constitutes single family residental property.
(c)(d) In accordance with the provisions of K.S.A. 74-2438, and amendments thereto,
any party may elect to appeal any application or decision referenced in subsection (b) to
the state board of tax appeals. Except as provided in subsection (b) regarding single-family residential property, the filing of an appeal with the small claims division shall not be a
prerequisite for filing an appeal with the state board of tax appeals under this section. Final
decisions of the small claims division may be appealed to the state board of tax appeals. An
appeal of a decision of the small claims division to the state board of tax appeals shall be de novo.
(d)(e) A taxpayer shall commence a proceeding in the small claims division by filing a
notice of appeal in the form prescribed by the rules of the state board of tax appeals which
shall state the nature of the taxpayer's claim. Notice of appeal shall be provided to the
appropriate unit of government named in the notice of appeal by the taxpayer. In any
valuation appeal or tax protest commenced pursuant to articles 14 and 20 of chapter 79 of
the Kansas Statutes Annotated, and amendments thereto, the hearing shall be conducted in
the county where the property is located or a county adjacent thereto. In any appeal from
a final determination by the secretary of revenue, the hearing shall be conducted in the
county in which the taxpayer resides or a county adjacent thereto.
(e)(f) The hearing in the small claims division shall be informal. The hearing officer
may hear any testimony and receive any evidence the hearing officer deems necessary or
desirable for a just determination of the case. A hearing officer shall have the authority to
administer oaths in all matters before the hearing officer. All testimony shall be given under
oath. A party may appear personally or may be represented by an attorney, a certified public
accountant, a certified general appraiser, a tax representative or agent, a member of the
taxpayer's immediate family or an authorized employee of the taxpayer. A county or unified government may be represented by the county appraiser, designee of the county appraiser, county attorney or counselor or other representatives so designated. No transcript of the
proceedings shall be kept.
(f)(g) The hearing in the small claims division shall be conducted within 60 days after
the appeal is filed in the small claims division unless such time period is waived by the taxpayer. A decision shall be rendered by the hearing officer within 30 days after the hearing
is concluded and, in cases arising from appeals described by subsections (b) and (c)(2) and (3), shall be accompanied by a written explanation of the reasoning upon which such decision is based. Documents provided by a taxpayer or county or district appraiser shall be returned
to the taxpayer or the county or district appraiser by the hearing officer and shall not become
a part of the board's permanent records. Documents provided to the hearing officer shall
be confidential and may not be disclosed, except as otherwise specifically provided.
(g)(h) With regard to any matter properly submitted to the division relating to the
determination of valuation of property for taxation purposes, it shall be the duty of the
county appraiser to initiate the production of evidence to demonstrate, by a preponderance
of the evidence, the validity and correctness of such determination. No presumption shall
exist in favor of the county appraiser with respect to the validity and correctness of such
determination.
Sec. 3. K.S.A. 1999 Supp. 79-201 is hereby amended to read as follows: 79-201. The
following described property, to the extent herein specified, shall be and is hereby exempt
from all property or ad valorem taxes levied under the laws of the state of Kansas:
First. All buildings used exclusively as places of public worship and all buildings used
exclusively by school districts and school district interlocal cooperatives organized under the
laws of this state, with the furniture and books therein contained and used exclusively for
the accommodation of religious meetings or for school district or school district interlocal
cooperative purposes, whichever is applicable, together with the grounds owned thereby if
not leased or otherwise used for the realization of profit, except that: (a) (1) Any school
building, or portion thereof, together with the grounds upon which the building is located,
shall be considered to be used exclusively by the school district for the purposes of this
section when leased by the school district to any political or taxing subdivision of the state,
including a school district interlocal cooperative, or to any association, organization or non-
profit corporation entitled to tax exemption with respect to such property; and (2) any school
building, together with the grounds upon which the building is located, shall be considered
to be used exclusively by a school district interlocal cooperative for the purposes of this
section when being acquired pursuant to a lease-purchase agreement; and (b) any building,
or portion thereof, used as a place of worship, together with the grounds upon which the
building is located, shall be considered to be used exclusively for the religious purposes of
this section when used as a not-for-profit day care center for children which is licensed
pursuant to K.S.A. 65-501 et seq., and amendments thereto, or when used to house an area
where the congregation of a church society and others may purchase tracts, books and other
items relating to the promulgation of the church society's religious doctrines.
Second. All real property, and all tangible personal property, actually and regularly used
exclusively for literary, educational, scientific, religious, benevolent or charitable purposes,
including property used exclusively for such purposes by more than one agency or organi-
zation for one or more of such exempt purposes. Except with regard to real property which
is owned by a religious organization, is to be used exclusively for religious purposes and is
not used for a nonexempt purpose prior to its exclusive use for religious purposes which
property shall be deemed to be actually and regularly used exclusively for religious purposes
for the purposes of this paragraph, this exemption shall not apply to such property, not
actually used or occupied for the purposes set forth herein, nor to such property held or
used as an investment even though the income or rentals received therefrom is used wholly
for such literary, educational, scientific, religious, benevolent or charitable purposes. In the
event any such property which has been exempted pursuant to the preceding sentence is
not used for religious purposes prior to its conveyance which results in its use for nonreli-
gious purposes, there shall be a recoupment of property taxes in an amount equal to the tax
which would have been levied upon such property except for such exemption for all taxable
years for which such exemption was in effect. Such recoupment tax shall become due and
payable in such year as provided by K.S.A. 79-2004, and amendments thereto. A lien for
such taxes shall attach to the real property subject to the same on November 1 in the year
such taxes become due and all such taxes remaining due and unpaid after the date prescribed
for the payment thereof shall be collected in the manner provided by law for the collection
of delinquent taxes. Moneys collected from the recoupment tax hereunder shall be credited
by the county treasurer to the several taxing subdivisions within which such real property is
located in the proportion that the total tangible property tax levies made in the preceding
year for each such taxing subdivision bear to the total of all such levies made in that year
by all such taxing subdivisions. Such moneys shall be credited to the general fund of the
taxing subdivision or if such taxing subdivision is making no property tax levy for the support
of a general fund such moneys may be credited to any other tangible property tax fund of
general application of such subdivision. This exemption shall not be deemed inapplicable
to property which would otherwise be exempt pursuant to this paragraph because an agency
or organization: (a) Is reimbursed for the provision of services accomplishing the purposes
enumerated in this paragraph based upon the ability to pay by the recipient of such services;
or (b) is reimbursed for the actual expense of using such property for purposes enumerated
in this paragraph; or (c) uses such property for a nonexempt purpose which is minimal in
scope and insubstantial in nature if such use is incidental to the exempt purposes of this
paragraph; or (d) charges a reasonable fee for admission to cultural or educational activities
or permits the use of its property for such activities by a related agency or organization, if
any such activity is in furtherance of the purposes of this paragraph.
Third. All moneys and credits belonging exclusively to universities, colleges, academies
or other public schools of any kind, or to religious, literary, scientific or benevolent and
charitable institutions or associations, appropriated solely to sustain such institutions or
associations, not exceeding in amount or in income arising therefrom the limit prescribed
by the charter of such institution or association.
Fourth. The reserve or emergency funds of fraternal benefit societies authorized to do
business under the laws of the state of Kansas.
Fifth. All buildings of private nonprofit universities or colleges which are owned and
operated by such universities and colleges as student union buildings, presidents' homes
and student dormitories.
Sixth. All real and tangible personal property actually and regularly used exclusively by
the alumni association associated by its articles of incorporation with any public or nonprofit
Kansas college or university approved by the Kansas board of regents to confer academic
degrees or with any community college approved by its board of trustees to grant certificates
of completion of courses or curriculum, to provide accommodations and services to such
college or university or to the alumni, staff or faculty thereof.
Seventh. All parsonages owned by a church society and actually and regularly occupied
and used predominantly as a residence by a minister or other clergyman of such church
society who is actually and regularly engaged in conducting the services and religious min-
istrations of such society, and the land upon which such parsonage is located to the extent
necessary for the accommodation of such parsonage.
Eighth. All real property, all buildings located on such property and all personal property
contained therein, actually and regularly used exclusively by any individually chartered or-
ganization of honorably discharged military veterans of the United States armed forces or
auxiliary of any such organization, which is exempt from federal income taxation pursuant
to section 501(c)(19) of the federal internal revenue code of 1986, for clubhouse, place of
meeting or memorial hall purposes, and real property to the extent of not more than two
acres, and all buildings located on such property, actually and regularly used exclusively by
any such veterans' organization or its auxiliary as a memorial park.
Ninth. All real property and tangible personal property actually and regularly used by a
community service organization for the predominant purpose of providing humanitarian
services, which is owned and operated by a corporation organized not for profit under the
laws of the state of Kansas or by a corporation organized not for profit under the laws of
another state and duly admitted to engage in business in this state as a foreign not-for-profit
corporation if: (a) The directors of such corporation serve without pay for such services; (b)
the corporation is operated in a manner which does not result in the accrual of distributable
profits, realization of private gain resulting from the payment of compensation in excess of
a reasonable allowance for salary or other compensation for services rendered or the reali-
zation of any other form of private gain; (c) no officer, director or member of such corpo-
ration has any pecuniary interest in the property for which exemption is claimed; (d) the
corporation is organized for the purpose of providing humanitarian services; (e) the actual
use of property for which an exemption is claimed must be substantially and predominantly
related to the purpose of providing humanitarian services, except that, the use of such
property for a nonexempt purpose which is minimal in scope and insubstantial in nature
shall not result in the loss of exemption if such use is incidental to the purpose of providing
humanitarian services by the corporation; (f) the corporation is exempt from federal income
taxation pursuant to section 501(c)(3) of the internal revenue code of 1986 and; (g) contri-
butions to the corporation are deductible under the Kansas income tax act. As used in this
clause, ``humanitarian services'' means the conduct of activities which substantially and pre-
dominantly meet a demonstrated community need and which improve the physical, mental,
social, cultural or spiritual welfare of others or the relief, comfort or assistance of persons
in distress or any combination thereof including but not limited to health and recreation
services, child care, individual and family counseling, employment and training programs
for handicapped persons and meals or feeding programs. Notwithstanding any other pro-
vision of this clause, motor vehicles shall not be exempt hereunder unless such vehicles are
exclusively used for the purposes described therein, except that the use of any such vehicle for the purpose of participating in a coordinated transit district in accordance with the provisions of K.S.A. 75-5032 through 75-5037, and amendments thereto, or K.S.A. 75-5051 through 75-5058, and amendments thereto, shall be deemed as exclusive use.
Tenth. For all taxable years commencing after December 31, 1986, any building, and the
land upon which such building is located to the extent necessary for the accommodation of
such building, owned by a church or nonprofit religious society or order which is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue
code of 1986, and actually and regularly occupied and used exclusively for residential and
religious purposes by a community of persons who are bound by vows to a religious life and
who conduct or assist in the conduct of religious services and actually and regularly engage
in religious, benevolent, charitable or educational ministrations or the performance of health
care services.
Eleventh. For all taxable years commencing after December 31, 1998, all real property upon which is located facilities which utilize renewable energy resources or technologies for the purpose and as the primary means to produce and generate electricity and which is used predominantly for such purpose, to the extent necessary to accommodate such facilities, and all tangible personal property which comprises such facilitiesactually and regularly used predominantly to produce and generate electricity utilizing renewable energy resources or technologies. For purposes of this section, ``renewable energy resources or technologies''
shall include wind, solar, thermal, photovoltaic, biomass, hydropower, geothermal and land-
fill gas resources or technologies. For purposes of valuation of property subject to valuation under K.S.A. 79-5a01 et seq.,and amendments thereto, the value of the exempt property set forth in this clause shall be removed from the unit value prior to apportionment under K.S.A. 79-5a25, and amendments thereto.
The provisions of this section, except as otherwise more specifically provided, shall apply
to all taxable years commencing after December 31, 1995.
Sec. 4. K.S.A. 1999 Supp. 79-201j is hereby amended to read as follows: 79-201j. The
following described property, to the extent specified by this section, shall be exempt from
all property or ad valorem taxes levied under the laws of the state of Kansas:
(a) All farm machinery and equipment. The term ``farm machinery and equipment''
means that personal property actually and regularly used in any farming or ranching oper-
ation. The term ``farm machinery and equipment'' shall include: (1) Machinery and equip-
ment comprising a natural gas distribution system which is owned and operated by a non-
profit public utility described by K.S.A. 66-104c, and amendments thereto, and which is
operated predominantly for the purpose of providing fuel for the irrigation of land devoted
to agricultural use; and (2) any greenhouse which is not permanently affixed to real estate and which is used for a farming or ranching operation. The term ``farming or ranching
operation'' shall include the operation of a feedlot and, the performing of farm or ranch
work for hire and the planting, cultivating and harvesting of nursery or greenhouse products, or both, for sale or resale. The term ``farm machinery and equipment'' shall not include any
passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a farm
trailer, as the terms are defined by K.S.A. 8-126 and amendments thereto.
The provisions of this subsection shall apply to all taxable years commencing after De-
cember 31, 19981999.
(b) (1) All aquaculture machinery and equipment. The term ``aquaculture machinery
and equipment'' means that personal property actually and regularly used in any aquaculture
operation. The term ``aquaculture operation'' shall include the feeding out of aquatic plants
and animals; breeding, growing or rearing aquatic plants and animals; and selling or trans-
porting aquatic plants and animals. The term ``aquaculture machinery and equipment'' shall
not include any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer.
(2) All Christmas tree machinery and equipment. The term ``Christmas tree machinery
and equipment'' means that personal property actually and regularly used in any Christmas
tree operation. The term ``Christmas tree operation'' shall include the planting, cultivating
and harvesting of Christmas trees; and selling or transporting Christmas trees. The term
``Christmas tree machinery and equipment'' shall not include any passenger vehicle, truck,
truck tractor, trailer, semitrailer or pole trailer.
The provisions of this subsection shall apply to all taxable years commencing after De-
cember 31, 1992.
Sec. 5. K.S.A. 1999 Supp. 79-1448 is hereby amended to read as follows: 79-1448. Any
taxpayer may complain or appeal to the county appraiser from the classification or appraisal
of the taxpayer's property by giving notice to the county appraiser within 30 days subsequent
to the date of mailing of the valuation notice required by K.S.A. 79-1460, and amendments
thereto, for real property, and on or before May 15 for personal property. The county
appraiser or the appraiser's designee shall arrange to hold an informal meeting with the
aggrieved taxpayer with reference to the property in question. At such meeting it shall be
the duty of the county appraiser or the county appraiser's designee to initiate production of
evidence to substantiate the valuation of such property, including the affording to the tax-
payer of the opportunity to review the data sheet of comparable sales utilized in the deter-
mination of such valuation. The county appraiser may extend the time in which the taxpayer
may informally appeal from the classification or appraisal of the taxpayer's property for just
and adequate reasons. Except as provided in K.S.A. 79-1404, and amendments thereto, no
informal meeting regarding real property shall be scheduled to take place after May 15, nor
shall a final determination be given by the appraiser after May 20. Any final determination shall be accompanied by a written explanation of the reasoning upon which such determi- nation is based when such determination is not in favor of the taxpayer. Any taxpayer who
is aggrieved by the final determination of the county appraiser may appeal to the hearing
officer or panel appointed pursuant to K.S.A. 79-1611, and amendments thereto, and such
hearing officer, or panel, for just cause shown and recorded, is authorized to change the
classification or valuation of specific tracts or individual items of real or personal property
in the same manner provided for in K.S.A. 79-1606, and amendments thereto. In lieu of
appealing to a hearing officer or panel appointed pursuant to K.S.A. 79-1611, and amend-
ments thereto, any taxpayer aggrieved by the final determination of the county appraiser,
except with regard to land devoted to agricultural use, wherein the value of the property, is
less than $2,000,000, as reflected on the valuation notice, or the property constitutes single
family residential property, may appeal to the small claims division of the state board of tax
appeals within the time period prescribed by K.S.A. 79-1606, and amendments thereto. Any
taxpayer who is aggrieved by the final determination of a hearing officer or panel may appeal
to the state board of tax appeals as provided in K.S.A. 79-1609, and amendments thereto.
An informal meeting with the county appraiser or the appraiser's designee shall be a con-
dition precedent to an appeal to the county or district hearing panel.
Sec. 6. K.S.A. 1999 Supp. 79-1606 is hereby amended to read as follows: 79-1606. (a)
The county or district appraiser, hearing officer or panel and arbitrator shall adopt, use and
maintain the following records, the form and method of use of which shall be prescribed
by the director of property valuation: (1) Appeal form, (2) hearing docket, and (3) record
of cases, including the disposition thereof.
(b) The county clerk shall furnish appeal forms to any taxpayer who desires to appeal
the final determination of the county or district appraiser as provided in K.S.A. 79-1448,
and amendments thereto. Any such appeal shall be in writing and filed with the county clerk
within 18 days of the date that the final determination of the appraiser was mailed to the
taxpayer.
(c) The hearing officer or panel shall hear and determine any appeal made by any
taxpayer or such taxpayer's agent or attorney. All such hearings shall be held in a suitable
place in the county or district. Sufficient evening and Saturday hearings shall be provided
as shall be necessary to hear all parties making requests for hearings at such times.
(d) Every appeal so filed shall be set for hearing by the hearing officer or panel, which
hearing shall be held on or before July 1, and the hearing officer or panel shall have no
authority to be in session thereafter, except as provided in K.S.A. 79-1404, and amendments
thereto. The county clerk shall notify each appellant and the county or district appraiser of
the date for hearing of the taxpayer's appeal at least 10 days in advance of such hearing. It
shall be the duty of the county or district appraiser to initiate the production of evidence to
demonstrate, by a preponderance of the evidence, the validity and correctness of the clas-
sification or appraisal of residential property or real property used for commercial and
industrial purposes, except that no such duty shall accrue with regard to leased commercial
and industrial property unless the property owner has furnished to the county or district
appraiser a complete income and expense statement for the property for the three years
next proceeding the year of appeal. No presumption shall exist in favor of the county or
district appraiser with respect to the validity or correctness of any such classification or
valuation. Every such appeal shall be determined by order of the hearing officer or panel, and suchwhich shall be accompanied by a written explanation of the reasoning upon which such order is based. Such order shall be recorded in the minutes of such hearing officer or
panel on or before July 5. Such recorded orders and minutes shall be open to public in-
spection. Notice as to disposition of the appeal shall be mailed by the county clerk to the
taxpayer and the county or district appraiser within five days after the determination.
Sec. 7. K.S.A. 1999 Supp. 79-1476 is hereby amended to read as follows: 79-1476. The
director of property valuation is hereby directed and empowered to administer and supervise
a statewide program of reappraisal of all real property located within the state. Except as
otherwise authorized by K.S.A. 19-428, and amendments thereto, each county shall com-
prise a separate appraisal district under such program, and the county appraiser shall have
the duty of reappraising all of the real property in the county pursuant to guidelines and
timetables prescribed by the director of property valuation and of updating the same on an
annual basis. In the case of multi-county appraisal districts, the district appraiser shall have
the duty of reappraising all of the real property in each of the counties comprising the
district pursuant to such guidelines and timetables and of updating the same on an annual
basis. Commencing in 2000, every parcel of real property shall be actually viewed and
inspected by the county or district appraiser once every six years. Any county or district
appraiser shall be deemed to be in compliance with the foregoing requirement in any year
if 17% or more of the parcels in such county or district are actually viewed and inspected.
Compilation of data for the initial preparation or updating of inventories for each parcel
of real property and entry thereof into the state computer system as provided for in K.S.A.
79-1477, and amendments thereto, shall be completed not later than January 1, 1989. When-
ever the director determines that reappraisal of all real property within a county is complete,
notification thereof shall be given to the governor and to the state board of tax appeals.
Valuations shall be established for each parcel of real property at its fair market value in
money in accordance with the provisions of K.S.A. 79-503a, and amendments thereto.
In addition thereto valuations shall be established for each parcel of land devoted to
agricultural use upon the basis of the agricultural income or productivity attributable to the
inherent capabilities of such land in its current usage under a degree of management re-
flecting median production levels in the manner hereinafter provided. A classification system
for all land devoted to agricultural use shall be adopted by the director of property valuation
using criteria established by the United States department of agriculture soil conservation
service. For all taxable years commencing after December 31, 1989, all land devoted to
agricultural use which is subject to the federal conservation reserve program shall be clas-
sified as cultivated dry land for the purpose of valuation for property tax purposes pursuant
to this section. For all taxable years commencing after December 31, 1999, all land devoted to agricultural use which is subject to the federal wetlands reserve program shall be classified as native grassland for the purpose of valuation for property tax purposes pursuant to this section. Productivity of land devoted to agricultural use shall be determined for all land
classes within each county or homogeneous region based on an average of the eight calendar
years immediately preceding the calendar year which immediately precedes the year of
valuation, at a degree of management reflecting median production levels. The director of
property valuation shall determine median production levels based on information available
from state and federal crop and livestock reporting services, the soil conservation service,
and any other sources of data that the director considers appropriate.
The share of net income from land in the various land classes within each county or
homogeneous region which is normally received by the landlord shall be used as the basis
for determining agricultural income for all land devoted to agricultural use except pasture
or rangeland. The net income normally received by the landlord from such land shall be
determined by deducting expenses normally incurred by the landlord from the share of the
gross income normally received by the landlord. The net rental income normally received
by the landlord from pasture or rangeland within each county or homogeneous region shall
be used as the basis for determining agricultural income from such land. The net rental
income from pasture and rangeland which is normally received by the landlord shall be
determined by deducting expenses normally incurred from the gross income normally re-
ceived by the landlord. Commodity prices, crop yields and pasture and rangeland rental
rates and expenses shall be based on an average of the eight calendar years immediately
preceding the calendar year which immediately precedes the year of valuation. Net income
for every land class within each county or homogeneous region shall be capitalized at a rate
determined to be the sum of the contract rate of interest on new federal land bank loans in
Kansas on July 1 of each year averaged over a five-year period which includes the five years
immediately preceding the calendar year which immediately precedes the year of valuation,
plus a percentage not less than .75% nor more than 2.75%, as determined by the director
of property valuation.
Based on the foregoing procedures the director of property valuation shall make an annual
determination of the value of land within each of the various classes of land devoted to
agricultural use within each county or homogeneous region and furnish the same to the
several county appraisers who shall classify such land according to its current usage and
apply the value applicable to such class of land according to the valuation schedules prepared
and adopted by the director of property valuation under the provisions of this section.
It is the intent of the legislature that appraisal judgment and appraisal standards be fol-
lowed and incorporated throughout the process of data collection and analysis and estab-
lishment of values pursuant to this section.
For the purpose of the foregoing provisions of this section the phrase ``land devoted to
agricultural use'' shall mean and include land, regardless of whether it is located in the
unincorporated area of the county or within the corporate limits of a city, which is devoted
to the production of plants, animals or horticultural products, including but not limited to:
Forages; grains and feed crops; dairy animals and dairy products; poultry and poultry prod-
ucts; beef cattle, sheep, swine and horses; bees and apiary products; trees and forest prod-
ucts; fruits, nuts and berries; vegetables; nursery, floral, ornamental and greenhouse prod-
ucts. Land devoted to agricultural use shall not include those lands which are used for
recreational purposes, other than that land established as a controlled shooting area pursuant
to K.S.A. 32-943, and amendments thereto, which shall be deemed to be land devoted to
agricultural use, suburban residential acreages, rural home sites or farm home sites and yard
plots whose primary function is for residential or recreational purposes even though such
properties may produce or maintain some of those plants or animals listed in the foregoing
definition.
The term ``expenses'' shall mean those expenses typically incurred in producing the plants,
animals and horticultural products described above including management fees, production
costs, maintenance and depreciation of fences, irrigation wells, irrigation laterals and real
estate taxes, but the term shall not include those expenses incurred in providing temporary
or permanent buildings used in the production of such plants, animals and horticultural
products.
The provisions of this act shall not be construed to conflict with any other provisions of
law relating to the appraisal of tangible property for taxation purposes including the equal-
ization processes of the county and state board of tax appeals.
Sec. 8. K.S.A. 1999 Supp. 74-2433, 74-2433f, 79-201, 79-201j, 79-5a01b, 79-1448, 79-
1476 and 79-1606 are hereby repealed.
Sec. 9. This act shall take effect and be in force from and after its publication in the
statute book.'';
In the title, in line 12, by striking all after the semicolon; by striking all in lines 13 and
14 and inserting ``amending K.S.A. 1999 Supp. 74-2433, 74-2433f, 79-201, 79-201j, 79-1448,
79-1476 and 79-1606 and repealing the existing sections; also repealing K.S.A. 1999 Supp.
79-5a01b.'';
\ And your committee on conference recommends the adoption of this report.
Susan Wagle
Clay Aurand
Melvin G. Minor Conferees on the part of House
Audrey Langworthy
David R. Corbin
Janis K. Lee Conferees on part of Senate
On motion of Rep. Wagle, the conference committee report on SB 12 was adopted.
On roll call, the vote was: Yeas 123; Nays 1; Present but not voting: 0; Absent or not
voting: 1.
INTRODUCTION OF ORIGINAL MOTIONS
In accordance with subsection (b) of House Rule 1309, Rep. Kirk moved that HB 3024
be withdrawn from Committee on Appropriations and be placed on the calendar under the
order of business General Orders.
(The Chief Clerk of the House of Representatives is requested to read this motion and
cause it to be printed in the Calendar of April 28, 2000, under the order of business ``Con-
sideration of Motions and House Resolutions Offered on a Previous Day'' as provided by
House Rule 1309 (b).)
REPORT ON ENGROSSED BILLS HB 2570; Sub. HB 2683 reported correctly engrossed April 27, 2000.
HB 2855 reported correctly re-engrossed April 27, 2000.
On motion of Rep. Glasscock, the House adjourned until 10:00 a.m., Friday, April 28,
2000.