February 11, 2000
Journal of the Senate
TWENTY-FOURTH DAY
______
| Senate Chamber, Topeka, Kansas |
| Friday, February 11, 2000--9:00 a.m. |
The Senate was called to order by President Dick Bond.
The roll was called with thirty-six senators present.
Senators Bleeker, Brownlee, Corbin and Langworthy were excused.
Invocation by Chaplain Fred S. Hollomon:
Heavenly Father,
Throughout the session we experience a wide range of emotions.
Help us to be:
More elated than frustrated
More excited than bored.
More glad than sad.
More happy than angry.
More joyful than sorrowful.
More pleased than disappointed.
More relaxed than tense.
More rested than tired.
More calm than nervous.
And perhaps most of all . . .
More at peace than in turmoil.
I pray in the Name of Jesus,
AMEN
PRESENTATION OF PETITIONS
The following petition was presented, read and filed:
SP 4, by Senator Alicia L. Salisbury: A petition requesting a law designating the Square
Dance as the State Folk Dance of Kansas, signed by Norbert L. Kampsen and 15 other
citizens of Topeka, Kansas, and the surrounding area.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were introduced and read by title:
SB 625, An act concerning the equus beds aquifer; providing for collection and
compilation of certain information regarding sources of existing and potential pollution, by
Committee on Energy and Natural Resources.
SB 626, An act establishing the board of social work; providing for the powers, duties
and functions thereof; amending K.S.A. 65-6302, as amended by section 11 of chapter 117
of the 1999 Session Laws of Kansas, and K.S.A. 1999 Supp. 74-7501 and 74-7507 and
repealing the existing sections, by Committee on Public Health and Welfare.
SB 627, An act concerning alcohol; relating to possession by minors; evidence; amending
K.S.A. 1999 Supp. 41-727 and repealing the existing section, by Committee on Judiciary.
SB 628, An act concerning crimes, criminal procedure and punishment; relating to
possession of a firearm by a felon; amending K.S.A. 1999 Supp. 21-4204 and repealing the
existing section, by Committee on Judiciary.
SB 629, An act concerning business entities; relating to annual reports; annual franchise
tax; amending K.S.A. 1999 Supp. 17-7503, 17-7505, 17-76,139, 45-221, 56a-1201 and 56a-
1202 and repealing the existing sections, by Committee on Judiciary.
SB 630, An act concerning infectious diseases communicable from one person to another
through body fluids; amending K.S.A. 1999 Supp. 65-6015, 65-6016 and 65-6017 and
repealing the existing sections, by Committee on Federal and State Affairs.
SB 631, An act concerning sexual abuse of certain persons; relating to reporting
requirements; amending K.S.A. 1999 Supp. 39-1402 and repealing the existing section, by
Committee on Judiciary.
SB 632, An act concerning courts; relating to authority of supreme court; municipal
courts; amending K.S.A. 12-4104 and 20-101 and repealing the existing sections, by
Committee on Judiciary.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills and resolution were referred to Committees as indicated:
Assessment and Taxation: SB 624.
Financial Institutions & Insurance: SB 619; HB 2648.
Judiciary: SB 620, 621, 622; SCR 1642.
Public Health and Welfare: HB 2701.
Transportation and Tourism: HB 2582.
Ways and Means: SB 623.
INTRODUCTION OF ORIGINAL MOTIONS AND SENATE RESOLUTIONS
Senator Harrington introduced the following Senate resolution, which was read:
SENATE RESOLUTION No. 1810--
A RESOLUTION congratulating and commending Carl Koster.
WHEREAS, Carl Koster, of Cheney, is known for his role as mayor of his hometown,
but his claim to fame is as a ``top'' cameraman for NFL films; and
WHEREAS, For the past 27 years, Carl Koster has looked forward to ``the best part-time
job in the world.'' For up to 20 fall weekends he works as the ``top'' cameraman, filming
the action of NFL football games from the press box and being the documentarian of the
game. To do so he may use seven 400 foot rolls of film. He has been to all of the stadiums
and filmed in all kinds of weather. Koster, known as a demon for details, says the camera
becomes an extension of the operator as it tells the story of the game; and
WHEREAS, Carl Koster's work has caused NFL Films to be honored as the premier
filmmaker in sports. NFL Films has won 65 Emmys for cinematography, direction, editing,
music, sound and computer graphics. The company's television productions include Inside
the NFL for HBO Sports, Monday Night Football half-time highlights for ABC Sports,
Monday Night Matchup for ESPN, national syndication of Road to the Super Bowl plus
Team Highlights for each of the NFL teams; and
WHEREAS, Carl Koster has served as Mayor of the City of Cheney since 1991. Other
civic participation includes Chairman of the Cheney Planning Commission, Chair of the All-
American City Task Force, reserve and part-time police officer, President of the Kansas
Mayors Association, Secretary and Vice-Chair of REAP (Regional Economic Area
Partnership), Secretary of the South Central Kansas Regional Council of Governments,
Chair of the Community Advisory Board KPTS, Chair of ALARM (Association Legislative
Action Rural Mayors), Instructor at the Kansas City Clerks School, Associate Instructor at
the Kansas Law Enforcement Training Center, President of the Sedgwick County Township
Officials and Vice-President of the Kansas Association of Townships. Additionally, Carl
Koster has been a Kansas certified property evaluation hearing officer since 1989: Now,
therefore,
Be it resolved by the Senate of the State of Kansas: That we congratulate and commend
Carl Koster upon his recognized expertise as a ``top'' cameraman for NFL films and for his
participation in community affairs; and
Be it further resolved: That the Secretary of the Senate be directed to provide an enrolled
copy of this resolution to Mr. Carl Koster at 714 Wolf, Cheney, Kansas 67025.
On emergency motion of Senator Harrington SR 1810 was adopted unanimously.
Senators welcomed Mr. Koster, who was accompanied by his mother, Clara, and
recognized him for his expertise as a ``top'' cameraman for NFL films and as mayor of
Cheney.
Senators Hensley and Bond introduced the following Senate resolution, which was read:
SENATE RESOLUTION No. 1811--
A RESOLUTION recognizing the Kansas community service network for Kansans
with developmental disabilities.
WHEREAS, Kansans with developmental disabilities, their families, their community
leaders, their county commissioners and their community service providers have been
pioneers in building stronger Kansas communities, and comprise the Kansas community
service network; and
WHEREAS, The Kansas community service network has fostered a better statewide
understanding of the challenges of developmental disabilities, and have promoted a clearer
understanding of the abilities of men and women with disabilities to share in the building
of our state's future; and
WHEREAS, The Kansas community service network has consistently shown their
willingness to meet and confer with governors, legislators and state agency leaders on the
ways in which they can and do share in the effective stewardship of state resources; and
WHEREAS, The Kansas community service network has shaped a strong network of
community-building strategies to make our state more truly an equal opportunity state; and
WHEREAS, By the expression of their hopes and dreams the Kansas community service
network has helped all Kansans to reach for more distant horizons and to imagine greater
potential opportunities for all our citizens: Now, therefore,
Be it resolved by the Senate of the State of Kansas: That we recognize the Kansas
community service network for the service and support it provides each day to Kansans with
developmental disabilities.
On emergency motion of Senator Hensley SR 1811 was adopted unanimously.
REPORTS OF STANDING COMMITTEES
Committee on Assessment and Taxation recommends SB 116 be amended on page
1, by striking all in lines 14 through 43;
By striking all on pages 2 through 12;
On page 13, by striking all in lines 1 through 30 and inserting the following:
Section 1. K.S.A. 1999 Supp. 79-3606 is hereby amended to read as follows: 79-3606.
The following shall be exempt from the tax imposed by this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, and
amendments thereto, tires taxed pursuant to K.S.A. 1999 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1999 Supp. 65-
34,150, and amendments thereto;
(b) all sales of tangible personal property or service, including the renting and leasing of
tangible personal property, purchased directly by the state of Kansas, a political subdivision
thereof, other than a school or educational institution, or purchased by a public or private
nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ bank and
used exclusively for state, political subdivision, hospital or public hospital authority or
nonprofit blood, tissue or organ bank purposes, except when: (1) Such state, hospital or
public hospital authority is engaged or proposes to engage in any business specifically taxable
under the provisions of this act and such items of tangible personal property or service are
used or proposed to be used in such business, or (2) such political subdivision is engaged
or proposes to engage in the business of furnishing gas, water, electricity or heat to others
and such items of personal property or service are used or proposed to be used in such
business;
(c) all sales of tangible personal property or services, including the renting and leasing of
tangible personal property, purchased directly by a public or private elementary or secondary
school or public or private nonprofit educational institution and used primarily by such
school or institution for nonsectarian programs and activities provided or sponsored by such
school or institution or in the erection, repair or enlargement of buildings to be used for
such purposes. The exemption herein provided shall not apply to erection, construction,
repair, enlargement or equipment of buildings used primarily for human habitation;
(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any public or private nonprofit hospital or public
hospital authority, public or private elementary or secondary school or a public or private
nonprofit educational institution, which would be exempt from taxation under the provisions
of this act if purchased directly by such hospital or public hospital authority, school or
educational institution; and all sales of tangible personal property or services purchased by
a contractor for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any political subdivision of the
state, the total cost of which is paid from funds of such political subdivision and which would
be exempt from taxation under the provisions of this act if purchased directly by such
political subdivision. Nothing in this subsection or in the provisions of K.S.A. 12-3418 and
amendments thereto, shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for any political
subdivision of the state. As used in this subsection, K.S.A. 12-3418 and 79-3640, and
amendments thereto, ``funds of a political subdivision'' shall mean general tax revenues, the
proceeds of any bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
purpose of constructing, equipping, reconstructing, repairing, enlarging, furnishing or
remodeling facilities which are to be leased to the donor. When any political subdivision of
the state, public or private nonprofit hospital or public hospital authority, public or private
elementary or secondary school or public or private nonprofit educational institution shall
contract for the purpose of constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities, it shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are made, and such
suppliers shall execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to the political subdivision,
hospital or public hospital authority, school or educational institution concerned a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the foregoing
procedure, any such contracting entity may apply to the secretary of revenue for agent status
for the sole purpose of issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
If any materials purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials which will not be so incorporated
in the building or other project reported and paid by such contractor to the director of
taxation not later than the 20th day of the month following the close of the month in which
it shall be determined that such materials will not be used for the purpose for which such
certificate was issued, the political subdivision, hospital or public hospital authority, school
or educational institution concerned shall be liable for tax on all materials purchased for the
project, and upon payment thereof it may recover the same from the contractor together
with reasonable attorney fees. Any contractor or any agent, employee or subcontractor
thereof, who shall use or otherwise dispose of any materials purchased under such a
certificate for any purpose other than that for which such a certificate is issued without the
payment of the sales or compensating tax otherwise imposed upon such materials, shall be
guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties
provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the
government of the United States, its agencies or instrumentalities concerned a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alternative to the foregoing
procedure, any such contracting entity may apply to the secretary of revenue for agent status
for the sole purpose of issuing and furnishing project exemption certificates to contractors
pursuant to rules and regulations adopted by the secretary establishing conditions and
standards for the granting and maintaining of such status. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
Any contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose other than that
for which such a certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in subsection (g) of K.S.A.
79-3615 and amendments thereto;
(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;
(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft repair,
modification and replacement parts and sales of services employed in the remanufacture,
modification and repair of aircraft sold to persons using directly or through an authorized
agent such aircraft and aircraft repair, modification and replacement parts as certified or
licensed carriers of persons or property in interstate or foreign commerce under authority
of the laws of the United States or any foreign government or sold to any foreign government
or agency or instrumentality of such foreign government and all sales of aircraft, aircraft
parts, replacement parts and services employed in the remanufacture, modification and
repair of aircraft for use outside of the United States;
(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;
(i) the lease or rental of all films, records, tapes, or any type of sound or picture
transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of such meals to employees
of any restaurant, eating house, dining car, hotel, drugstore or other place where meals or
drinks are regularly sold to the public if such employees' duties are related to the furnishing
or sale of such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A. 8-
126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the
provisions of subsection (o) of K.S.A. 79-3603 and amendments thereto;
(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer,
manufacturer or compounder may obtain from the director of taxation and furnish to the
supplier an exemption certificate number for tangible personal property for use as an
ingredient or component part of the property or services produced, manufactured or
compounded;
(n) all sales of tangible personal property which is consumed in the production,
manufacture, processing, mining, drilling, refining or compounding of tangible personal
property, the treating of by-products or wastes derived from any such production process,
the providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;
(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of which
is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments thereto,
the production of food for human consumption, the production of animal, dairy, poultry or
aquatic plant and animal products, fiber or fur, or the production of offspring for use for
any such purpose or purposes;
(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-1626, and
amendments thereto;
(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;
(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry. For the purposes of this
subsection, the term prosthetic and orthopedic appliances means any apparatus, instrument,
device, or equipment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any disabled person in
leading a normal life by facilitating such person's mobility; such term shall include
accessories attached or to be attached to motor vehicles, but such term shall not include
motor vehicles or personal property which when installed becomes a fixture to real property;
(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, which property or services are used in the operation or
maintenance of the district;
(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ``farm
machinery and equipment or aquaculture machinery and equipment'' shall include
machinery and equipment used in the operation of Christmas tree farming but shall not
include any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other
than a farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto.
Each purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;
(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;
(v) all sales of food products to any contractor for use in preparing meals for delivery to
homebound elderly persons over 60 years of age and to homebound disabled persons or to
be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;
(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ``severing'' shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;
(y) all sales of materials and services used in the repairing, servicing, altering, maintaining,
manufacturing, remanufacturing, or modification of railroad rolling stock for use in interstate
or foreign commerce under authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;
(aa) all sales of materials and services applied to equipment which is transported into the
state from without the state for repair, service, alteration, maintenance, remanufacture or
modification and which is subsequently transported outside the state for use in the
transmission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or
manufactured homes'' means sales other than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;
(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;
(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;
(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;
(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization, and all sales of tangible personal property by
or on behalf of any such organization. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the renting and leasing of
tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;
(kk) on and after January 1, 1989, all sales of machinery and equipment used directly and
primarily for the purposes of manufacturing, assembling, processing, finishing, storing,
warehousing or distributing articles of tangible personal property in this state intended for
resale by a manufacturing or processing plant or facility or a storage, warehousing or
distribution facility, and all sales of repair and replacement parts and accessories purchased
for such machinery and equipment:
(1) For purposes of this subsection, machinery and equipment shall be deemed to be
used directly and primarily in the manufacture, assemblage, processing, finishing, storing,
warehousing or distributing of tangible personal property where such machinery and
equipment is used during a manufacturing, assembling, processing or finishing, storing,
warehousing or distributing operation:
(A) To effect a direct and immediate physical change upon the tangible personal property;
(B) to guide or measure a direct and immediate physical change upon such property
where such function is an integral and essential part of tuning, verifying or aligning the
component parts of such property;
(C) to test or measure such property where such function is an integral part of the
production flow or function;
(D) to transport, convey or handle such property during the manufacturing, processing,
storing, warehousing or distribution operation at the plant or facility; or
(E) to place such property in the container, package or wrapping in which such property
is normally sold or transported.
(2) For purposes of this subsection ``machinery and equipment used directly and
primarily'' shall include, but not be limited to:
(A) Mechanical machines or components thereof contributing to a manufacturing,
assembling or finishing process;
(B) molds and dies that determine the physical characteristics of the finished product or
its packaging material;
(C) testing equipment to determine the quality of the finished product;
(D) computers and related peripheral equipment that directly control or measure the
manufacturing process or which are utilized for engineering of the finished product; and
(E) computers and related peripheral equipment utilized for research and development
and product design.
(3) ``Machinery and equipment used directly and primarily'' shall not include:
(A) Hand tools;
(B) machinery, equipment and tools used in maintaining and repairing any type of
machinery and equipment;
(C) transportation equipment not used in the manufacturing, assembling, processing,
furnishing, storing, warehousing or distributing process at the plant or facility;
(D) office machines and equipment including computers and related peripheral
equipment not directly and primarily used in controlling or measuring the manufacturing
process;
(E) furniture and buildings; and
(F) machinery and equipment used in administrative, accounting, sales or other such
activities of the business;
(4) for purposes of this subsection, ``repair and replacement parts and accessories'' means
all parts and accessories for exempt machinery and equipment, including but not limited to
dies, jigs, molds, and patterns which are attached to exempt machinery or which are
otherwise used in production, short-lived replaceable parts that can be readily detached
from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars
and saws, and other replacement parts for production equipment, including refractory brick
and other refractory items for kiln equipment used in production operations;
(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and
conducting programs for the improvement of public health;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides, germicides,
pesticides and fungicides; and services, purchased and used for the purpose of producing
plants in order to prevent soil erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services rendered by an
advertising agency or licensed broadcast station or any member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;
(pp) all sales of drill bits and explosives actually utilized in the exploration and production
of oil or gas;
(qq) all sales of tangible personal property and services purchased by a nonprofit museum
or historical society or any combination thereof, including a nonprofit organization which is
organized for the purpose of stimulating public interest in the exploration of space by
providing educational information, exhibits and experiences, which is exempt from federal
income taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;
(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;
(ss) all sales of tangible personal property and services purchased by a public broadcasting
station licensed by the federal communications commission as a noncommercial educational
television or radio station;
(tt) all sales of tangible personal property and services purchased by or on behalf of a not-
for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;
(uu) all sales of tangible personal property and services purchased by or on behalf of any
rural volunteer fire-fighting organization for use exclusively in the performance of its duties
and functions;
(vv) all sales of tangible personal property purchased by any of the following organizations
which are exempt from federal income taxation pursuant to section 501 (c)(3) of the federal
internal revenue code of 1986, for the following purposes, and all sales of any such property
by or on behalf of any such organization for any such purpose:
(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related
services to reduce disability and death from cardiovascular diseases and stroke;
(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;
(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for persons
who are mentally ill and to education, research and support for them and their families;
(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of eliminating
diabetes through medical research, public education focusing on disease prevention and
education, patient education including information on coping with diabetes, and professional
education and training;
(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all lung
diseases through medical research, public education including information on coping with
lung diseases, professional education and training related to lung disease and other related
services to reduce the incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's Disease and Related Disorders Association,
Inc. for the purpose of providing assistance and support to persons in Kansas with
Alzheimer's disease, and their families and caregivers; and
(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such
organization.
(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986 contracted with to operate such zoo and all sales of tangible personal property or
services purchased by a contractor for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling facilities for any
nonprofit zoo which would be exempt from taxation under the provisions of this section if
purchased directly by such nonprofit zoo or the entity operating such zoo. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery,
equipment or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any nonprofit zoo. When any
nonprofit zoo shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the
state and furnish to the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such purchases are made,
and such suppliers shall execute invoices covering the same bearing the number of such
certificate. Upon completion of the project the contractor shall furnish to the nonprofit zoo
concerned a sworn statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All invoices shall be
held by the contractor for a period of five years and shall be subject to audit by the director
of taxation. If any materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials which will not be so
incorporated in the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the close of the month
in which it shall be determined that such materials will not be used for the purpose for
which such certificate was issued, the nonprofit zoo concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may recover the same
from the contractor together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments
thereto;
(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property by or on behalf of
such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-air, free access radio or
television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by a religious
organization which is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code, and used exclusively for religious purposes, and all sales
of tangible personal property or services purchased by a contractor for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for any such organization which would be exempt from taxation under
the provisions of this section if purchased directly by such organization. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery,
equipment or tools used in the constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any such organization. When any
such organization shall contract for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the
state and furnish to the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such purchases are made,
and such suppliers shall execute invoices covering the same bearing the number of such
certificate. Upon completion of the project the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All invoices shall be
held by the contractor for a period of five years and shall be subject to audit by the director
of taxation. If any materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials which will not be so
incorporated in the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the close of the month
in which it shall be determined that such materials will not be used for the purpose for
which such certificate was issued, such organization concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may recover the same
from the contractor together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments
thereto. Sales tax paid on and after July 1, 1998, but prior to the effective date of this act
upon the gross receipts received from any sale exempted by the amendatory provisions of
this subsection shall be refunded. Each claim for a sales tax refund shall be verified and
submitted to the director of taxation upon forms furnished by the director and shall be
accompanied by any additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as determined under the
provisions of this subsection. All refunds shall be paid from the sales tax refund fund upon
warrants of the director of accounts and reports pursuant to vouchers approved by the
director or the director's designee;
(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof;
(ccc) on and after July 1, 1999, all sales of tangible personal property and services
purchased by a primary care clinic or health center the primary purpose of which is to
provide services to medically underserved individuals and families, and which is exempt
from federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue
code, and all sales of tangible personal property or services purchased by a contractor for
the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such clinic or center which would be exempt from
taxation under the provisions of this section if purchased directly by such clinic or center.
Nothing in this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping, reconstructing,
maintaining, repairing, enlarging, furnishing or remodeling facilities for any such clinic or
center. When any such clinic or center shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
facilities, it shall obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials for incorporation in
such project. The contractor shall furnish the number of such certificate to all suppliers
from whom such purchases are made, and such suppliers shall execute invoices covering
the same bearing the number of such certificate. Upon completion of the project the
contractor shall furnish to such clinic or center concerned a sworn statement, on a form to
be provided by the director of taxation, that all purchases so made were entitled to exemption
under this subsection. All invoices shall be held by the contractor for a period of five years
and shall be subject to audit by the director of taxation. If any materials purchased under
such a certificate are found not to have been incorporated in the building or other project
or not to have been returned for credit or the sales or compensating tax otherwise imposed
upon such materials which will not be so incorporated in the building or other project
reported and paid by such contractor to the director of taxation not later than the 20th day
of the month following the close of the month in which it shall be determined that such
materials will not be used for the purpose for which such certificate was issued, such clinic
or center concerned shall be liable for tax on all materials purchased for the project, and
upon payment thereof it may recover the same from the contractor together with reasonable
attorney fees. Any contractor or any agent, employee or subcontractor thereof, who shall
use or otherwise dispose of any materials purchased under such a certificate for any purpose
other than that for which such a certificate is issued without the payment of the sales or
compensating tax otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615, and amendments thereto;
(ddd) on and after January 1, 1999, and before January 1, 2000, all sales of materials and
services purchased by any class II or III railroad as classified by the federal surface
transportation board for the construction, renovation, repair or replacement of class II or
III railroad track and facilities used directly in interstate commerce. In the event any such
track or facility for which materials and services were purchased sales tax exempt is not
operational for five years succeeding the allowance of such exemption, the total amount of
sales tax which would have been payable except for the operation of this subsection shall
be recouped in accordance with rules and regulations adopted for such purpose by the
secretary of revenue; and
(eee) on and after January 1, 1999, and before January 1, 2000, all sales of materials and
services purchased for the original construction, reconstruction, repair or replacement of
grain storage facilities, including railroad sidings providing access thereto; and
(fff) all sales of tangible personal property and services purchased by or on behalf of the
Kansas Academy of Science which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, and used solely by such academy for
the preparation, publication and dissemination of educational materials.'';
Also, on page 13, in line 31, by striking ``1998'' and inserting ``1999'';
In the title, in line 9, by striking ``exemption'' and inserting ``exempting certain''; in line
10, by striking ``1998'' and inserting ``1999''; and the bill be passed as amended.
Commerce recommends SB 431 be amended on page 2, in line 21, by striking ``adding''
and inserting ``while soliciting or verifying the addition of''; and the bill be passed as
amended.
Energy and Natural Resources recommends SB 405 be amended on page 1, in line
17, by striking ``county commissioners'' and inserting ``board of directors of the district''; in
line 22, by striking all before ``that'' and inserting ``. If the board of directors of the district
does not grant the petition within 30 days after receipt of the petition, the petitioners shall
submit the petition to the board of county commissioners. Upon receipt of such petition,
the board of county commissioners shall schedule a hearing on the petition. The county
commission shall give written notice of the time and place of the hearing to the petitioners
at least 10 days before the hearing and shall mail, by certified mail, return receipt requested,
written notice of the time and place of the hearing, together with a copy of the petition, to
the board of directors of the district not less than 10 days before the hearing. If, upon the
hearing, the board of county commissioners finds''; in line 23, by striking ``to'' and inserting
``in''; and the bill be passed as amended.
On motion of Senator Emert the Senate adjourned until 2:30 p.m., Monday, February
14, 2000.
HELEN A. MORELAND, Journal Clerk.
PAT SAVILLE, Secretary of Senate.