An Act creating the Kansas investments in major projects and comprehensive training act; amending K.S.A. 74-50,102, 74-50,103, 74-50,104, 74-50,105, 74-50,106, 74-50,107, 74- 50,108, 74-50,109 and 74-50,110 and K.S.A. 1995 Supp. 74-8920 and 79-32,105 and repealing the existing sections.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 74-50,102 is hereby amended to read as follows: 74-50,102. The provisions of K.S.A. 74-50,102 through 74-50,112 and amendments thereto shall be known and may be cited as the state of Kansas investments in lifelong learning act or SKILL Kansas investments in major projects and comprehensive training or IMPACT act.

Sec. 2. K.S.A. 74-50,103 is hereby amended to read as follows: 74- 50,103. As used in the SKILL IMPACT act:

(a) ``Act'' means the state of Kansas investments in lifelong learning act or the SKILL Kansas investments in major projects and comprehen- sive training act.

(b) ``Agreement'' means the agreement between among an employer and, an educational institution and the secretary of commerce and housing concerning a SKILL project or a combined SKILL project and major project investment and the agreement between an employer and the sec- retary of commerce and housing concerning a major project investment.

(c) ``Bond'' means a public purpose bond issued for new jobs training IMPACT projects by the Kansas development finance authority.

(d) ``Date of commencement of the project'' means the date of the agreement.

(e) ``Educational institution'' means a community college, as defined by K.S.A. 71-701 and amendments thereto, an area vocational school or area vocational-technical school, as defined by K.S.A. 72-4412 and amendments thereto, a university, as defined by K.S.A. 72-6501 and amendments thereto, or a state educational institution, as defined by K.S.A. 76-711 and amendments thereto.

(f) ``Employee'' means a person employed in a new job.

(g) ``Employer'' means a Kansas basic enterprise providing new jobs in conjunction with a project.

(h) ``IMPACT project'' or ``project'' means a SKILL project, major project investment or a combination of the two.

(h) (i) ``Kansas basic enterprise'' means any enterprise:

(1) Which is located or principally based in Kansas; and

(2) which can provide demonstrable evidence that:

(A) It is primarily engaged in any one or more of the Kansas basic industries; or

(B) it is primarily engaged in the development or production of goods or the provision of services for out-of-state sale; or

(C) it is primarily engaged in the production of goods or the provision of services which will attract out-of-state buyers or consumers into the state; or

(D) it is primarily engaged in the production of raw materials, ingre- dients, or components for other enterprises which export the majority of their products from the state; or

(E) it is a national or regional enterprise which is primarily engaged in interstate commerce or an affiliated management company of such an enterprise; or

(F) it is primarily engaged in the production of goods or the provision of services which will supplant goods or services which would be imported into the state; or

(G) it is the corporate or regional headquarters of a multistate enter- prise which is primarily engaged in out-of-state industrial activities.

(i) (j) ``Kansas basic industry'' means:

(1) Agriculture;

(2) mining;

(3) manufacturing;

(4) interstate transportation;

(5) wholesale trade which is primarily multistate in activity or which has a major import supplanting effect within the state;

(6) financial services which are provided primarily for interstate or international transactions;

(7) business services which are provided primarily in out-of-state markets;

(8) research and development of new products, processes, or tech- nologies; or

(9) tourism activities which are primarily engaged in for the purpose of attracting out-of-state tourists.

(k) ``Major project investment'' or ``investment'' means financial as- sistance to an employer to defray business costs including, but not limited to, relocation expenses, building and equipment purchases, labor recruit- ment.

(j) (l) ``Primarily engaged'' means engagement in an activity by an enterprise to the extent that not less than 51% of the gross income of the enterprise is derived from such engagement.

(k) (m) ``New job'' means a job in a new or expanding Kansas basic enterprise not including jobs of recalled workers, or existing jobs that are vacant or other jobs that formerly existed in the Kansas basic enterprise in Kansas.

(l) (n) ``SKILL IMPACT program'' or ``program'' means the project or projects established by educational institutions to provide education and training of workers for new jobs major project investments and SKILL projects undertaken by the department of commerce and housing in ac- cordance with the provisions of this act for a new or expanding Kansas basic enterprise.

(m) (o) ``Program costs'' means all necessary and incidental costs of providing program services, except that program costs shall not include: (1) Any wages paid to persons receiving education or training under a project, (2) any costs for purchase or lease of training equipment that exceed 50% of total program costs for the project, and (3) any costs for administrative expenses of educational institutions that exceed 10% of total program costs for the project.

(n) (p) ``Program services'' means:

(1) New jobs training, including training development costs, except that the actual training period for any new job shall not exceed 36 months from the date the job is first filled by an employee;

(2) adult basic education and job-related instruction;

(3) vocational and skill-assessment services and testing;

(4) training equipment for education institutions;

(5) material and supplies;

(6) administrative expenses of educational institutions for new jobs training programs;

(7) subcontracted services with other educational institutions, private colleges or universities or other federal, state or local agencies; and

(8) contracted or professional service;

(9) major project investments.

(o) (q) ``SKILL project'' or ``project'' means a training arrangement which is the subject of an agreement entered into between the educa- tional institution and an employer to provide program services.

Sec. 3. K.S.A. 74-50,104 is hereby amended to read as follows: 74- 50,104. (a) The secretary of commerce and housing shall administer the provisions of this act and the SKILL IMPACT program established there- under. The secretary of commerce and housing shall encourage Kansas basic enterprises with similar training needs to cooperate in establishing SKILL projects. The secretary of commerce and housing shall coordinate the SKILL program with other job training programs administered by the department of commerce and housing. The secretary of commerce shall provide opportunities for coordination and cooperation of SKILL projects with other job training activities in Kansas.

(b) The secretary of commerce and housing shall adopt rules and regulations (1) prescribing review standards and priorities for approval of proposed agreements under this act, including appropriate incentives for cooperation among projects, in order to maximize the number of new jobs created with respect to individual Kansas basic enterprises, which will remain in Kansas, and (2) prescribing limits on program costs and on project and program size in relation to the number of new jobs created or the wages of new jobs created. No agreement shall be approved which provides for program costs of a project under the agreement of more than 90% of the amount equal to the estimated rate of withholding tax applied to the estimated amount of gross wages of all the new jobs under the project over a ten-year period.

(c) The secretary of commerce and housing may adopt such other rules and regulations as may be required for the implementation and administration of this act.

Sec. 4. K.S.A. 74-50,105 is hereby amended to read as follows: 74- 50,105. (a) Subject to the approval of the secretary of commerce and housing, an educational institution may enter into an agreement to estab- lish a project and provide program services to an employer. As soon as- possible after initial contact between an educational institution and an employer regarding the possibility of entering into an agreement, the educational institution shall inform the secretary of commerce and hous- ing about the potential project. If an agreement is entered into, the ed- ucational institution and the employer shall notify the secretary of revenue with 15 calendar days.

(b) Among other provisions, an agreement shall include:

(1) Provisions regarding payment of program costs, including de- ferred costs, which may be paid from one or a combination of the follow- ing sources:

(A) The SKILL IMPACT program services fund;

(B) tuition, student fees, or special charges fixed by the educational institution to defray program costs in whole or in part; and

(C) grants or donations available from federal agencies or other pub- lic or private sources;

(2) a provision requiring each Kansas basic enterprise under the agreement to submit information to the secretary of commerce and hous- ing regarding the numbers of new jobs and the wages and withholding taxes paid therefor;

(3) a provision which fixes any tuition and fee payments which shall be paid for program costs; and

(4) a provision which fixes an amount that shall be paid by an em- ployer if an agreement is terminated or any provision of the agreement is breached by the employer prior to satisfaction of all of the employer's obligations under the agreement and which prescribes that any such pay- ment shall be deposited in the state treasury to the credit of the SKILL IMPACT program services fund.

(c) Any payment required to be made by an employer shall be a lien upon the employer's business property until paid and has equal prece- dence with ordinary taxes and shall not be divested by a judicial sale. Property subject to the lien may be sold for sums due and delinquent at a tax sale, with the same forfeitures, penalties and consequences as for the nonpayment of ordinary taxes. The purchasers at tax sale obtain the property subject to the remaining payments.

(d) The payment of program costs incurred under any agreement shall not be deferred for a period longer than 10 years from the date of the commencement of the project.

Sec. 5. K.S.A. 74-50,106 is hereby amended to read as follows: 74- 50,106. (a) The secretary of commerce and housing shall review appli- cations for proposed agreements submitted by employers in accordance with the standards and guidelines prescribed by this act and by rules and regulations adopted under K.S.A. 74-50,104 and amendments thereto. Each application for approval of a proposed agreement shall be accom- panied by information about the number and wages of the new jobs cre- ated by the employer, documentation of existing training activities of the employer and such other information as may be required by the secretary of commerce and housing.

(b) The secretary of commerce and housing may pool the funding requirements of projects which are the subject of proposed agreements to determine the funding requirements of the SKILL projects under con- sideration to facilitate the issuance of bonds by the Kansas development finance authority.

(c) The secretary of commerce and housing is hereby authorized to expend funds raised pursuant to this act on major project investments. The secretary shall adopt guidelines consistent with this act concerning firm eligibility for major project investments and shall otherwise admin- ister the major project investment portion of the IMPACT act.

(d) In order for an employer to be eligible for a major project invest- ment, the employer must:

(1) Annually make an investment in training and education of the employer's employees that exceeds 2% of the employer's total annual pay- roll costs; or

(2) agree that a portion of any funds available under the agreement be spent directly on employee education and training.

(c) (e) Prior to obtaining financing from the Kansas development fi- nance authority for any project or a, group of projects or major project investment for one or more employers, the secretary of commerce and housing shall present each such project to the governor's council on work force training and investment for review and approval. No agreement shall be approved by the secretary of commerce and housing unless each pro- ject under the agreement has been reviewed and finally approved by the governor's council on work force training and investment.

Sec. 6. K.S.A. 74-50,107 is hereby amended to read as follows: 74- 50,107. (a) The secretary of commerce shall certify at least once each six months to the secretary of revenue the estimates of the number and wages of all new jobs that have been created in Kansas since the effective date of this act.

(b) (a) The secretary of commerce and housing shall determine and from time to time shall redetermine the rate at which moneys shall be credited to the SKILL IMPACT program repayment fund in order to satisfy all bond repayment obligations which have been incurred to fi- nance program costs for SKILL IMPACT programs (which shall be re- ferred to as the debt service rate) and the rate at which moneys shall be credited to the SKILL IMPACT program services fund in order to finance program costs that are not financed by bonds (which shall be referred to as the direct funding rate). The total of the debt service rate and the direct funding rate shall be the combined rate. Each rate so determined shall be certified to the secretary of revenue. The combined rate deter- mined under this subsection shall not exceed the rate which, when ap- plied to the moneys withheld from the wages of individuals and received under the Kansas withholding and declaration of estimated tax act, K.S.A. 79-3294 et seq. and amendments thereto, and attributable to individuals in new jobs, yields an amount equal to the amount which results when the rate of 1% is applied to all moneys withheld from the wages of indi- viduals and received under the Kansas withholding and declaration of estimated tax act.

(c) (b) Upon receipt of the rates determined and certified under sub- section (b) (a), the secretary of revenue shall apply daily the combined rate to that portion of the moneys withheld from the wages of individuals and collected under the Kansas withholding and declaration of estimated tax act that is attributable to individuals in new jobs created as determined by the secretary of revenue in accordance with the current certification of estimates of the number and wages of all new jobs created in Kansas under subsection (a) by the secretary of commerce K.S.A. 79-3294 et seq., and amendments thereto. The amount so determined shall be credited as follows: (1) The portion attributable to the debt service rate shall be credited to the SKILL IMPACT program repayment fund, and (2) the remaining portion shall be credited to the SKILL IMPACT program serv- ices fund.

(d) The secretary of human resources shall provide such information and estimates regarding employment, payrolls, numbers of new jobs and other matters as may be requested by the secretary of commerce for the purposes of the SKILL act. The aggregate of all amounts credited to the IMPACT program repayment fund under this section during any fiscal year to pay bond repayment obligations on bonds to finance major project investments shall not exceed 10% of the amount which results when the rate of 1% is applied to all money withheld from the wages of individuals and received under the Kansas withholding and declaration of estimated tax act.

Sec. 7. K.S.A. 74-50,108 is hereby amended to read as follows: 74- 50,108. There is hereby created in the state treasury the SKILL IMPACT program services fund. The secretary of commerce shall administer the SKILL IMPACT program services fund. All moneys credited to the SKILL program services fund shall be for all or part of the program costs of projects or major project investments approved by the secretary of commerce and housing under this act, except that moneys in the SKILL IMPACT program services fund which are not required to pay program costs or major projects investments may be transferred to the state general fund in accordance with provisions of appropriation acts. All expenditures from the SKILL IMPACT program services fund shall be for the purposes of paying program costs and shall be made in accordance with appropri- ations acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the secretary of commerce and housing or the secretary's designee. The secretary of commerce and housing shall remit to the state treasurer all moneys received under this act, including the proceeds of bonds issued by the Kansas development finance au- thority for the purposes of this act. Upon receipt of each remittance the state treasurer shall deposit the entire amount in the state treasury to the credit of the SKILL IMPACT program services fund.

Sec. 8. K.S.A. 74-50,109 is hereby amended to read as follows: 74- 50,109. (a) There is hereby created in the state treasury the SKILL IM- PACT program repayment fund. The secretary of commerce shall ad- minister the SKILL IMPACT program repayment fund. Except as provided in subsection (c), all moneys credited to the SKILL IMPACT program repayment fund shall be to make payments to the Kansas de- velopment finance authority for payment of costs relating to the retire- ment of bonds issued to finance projects approved by the secretary of commerce and housing under this act, including but not limited to the principal of and interest on such bonds and the expenses of issuance. All expenditures from the SKILL IMPACT program repayment fund shall be made in accordance with appropriations acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the secretary of commerce and housing or the secretary's designee.

(b) Upon request of the secretary of commerce and housing, the di- rector of accounts and reports shall establish one or more reserve ac- counts in the SKILL IMPACT program repayment fund to secure one or more issues of bonds issued by the Kansas development finance authority for the purposes of this act.

(c) On June 30 of each year, any unencumbered balance in the SKILL IMPACT program repayment fund which is not required for pay- ment of such expenses during the ensuing fiscal year, including any such expenses associated with proposed investments agreements and bond is- sues under consideration for such fiscal year, and which is not credited to any reserve account in the fund, as certified by the secretary of com- merce and housing to the director of accounts and reports, shall be trans- ferred by the director of accounts and reports from the SKILL IMPACT program repayment fund to the SKILL IMPACT program services fund.

Sec. 9. K.S.A. 74-50,110 is hereby amended to read as follows: 74- 50,110. The activities of the secretary of commerce and housing in ad- ministering and performing the powers, duties and functions prescribed by the provisions of this act and providing moneys for SKILL IMPACT programs from the proceeds of bonds issued by the Kansas development finance authority are hereby approved for the purposes of subsection (b) of K.S.A. 74-8905 and amendments thereto and the authorization of the issuance of such bonds by the Kansas development finance authority in accordance with that statute. The provisions of subsection (a) of K.S.A. 74-8905 and amendments thereto shall not prohibit the issuance of bonds for such purposes when so authorized and any such issuance of bonds is exempt from the provisions of subsection (a) of K.S.A. 74-8905 and amendments thereto.

Sec. 10. K.S.A. 1995 Supp. 79-32,105 is hereby amended to read as follows: 79-32,105. (a) The director shall pay to the treasurer of the state daily the entire amount collected during the preceding day, under the provisions of this act and from the income tax imposed upon individuals, corporations, estates or trusts pursuant to the ``Kansas income tax act'' less amounts withheld as provided in subsection (b) and any amounts credited to the SKILL IMPACT program repayment fund or the SKILL IMPACT program services fund under K.S.A. 74-50,107 and amendments thereto, which amounts shall be credited to the state general fund.

(b) A revolving fund, designated as ``income tax refund fund'' not to exceed $4,000,000 shall be set apart and maintained by the director from income tax collections, withholding tax collections, and estimated tax col- lections and held by the state treasurer for prompt payment of all income tax refunds and for the payment of interest as provided in subsection (e). The fund shall be in such amount, within the limit set by this section, as the director determines is necessary to meet current refunding require- ments under this act.

(c) If the director discovers from the examination of the return, or upon claim duly filed by the taxpayer or upon final judgment of the court that the income tax, withholding tax, declaration of estimated tax or any penalty or interest paid by or credited to any taxpayer is in excess of the amount legally due, the director shall certify to the director of accounts and reports the name of the taxpayer, the amount of refund and such other information as the director may require. Upon receipt of such cer- tification the director of accounts and reports shall issue a warrant on the state treasurer for the payment to the taxpayer out of the fund provided in subsection (b), except that no refund shall be made for a sum less than $5, but such amount may be claimed by the taxpayer as a credit against the taxpayer's tax liability in the taxpayer's next succeeding taxable year.

(d) When a resident taxpayer dies, and the director determines that a refund is due the claimant not in excess of $100, the director shall certify to the director of accounts and reports the name and address of the claimant entitled to the refund and the amount of the refund. A refund may be made upon a claim duly made on behalf of the estate of the deceased or in the absence of any such claim upon a claim by a surviving spouse and if none upon the claim by any heir at law. Upon receipt of such certification the director of accounts and reports shall issue a warrant on the state treasurer for the payment to the claimant out of the fund provided in subsection (b).

(e) Interest shall be allowed and paid at the rate of 12% per annum upon any overpayment of the income tax imposed upon individuals, cor- porations, estates or trusts pursuant to the Kansas income tax act for any period prior to January 1, 1995, 6% per annum for the period commenc- ing on January 1, 1995, and ending on December 31, 1997, and at the overpayment rate prescribed and determined under section 6621 of the federal internal revenue code, as in effect on January 1, 1994, and which rate is in effect on July 1 of the year immediately preceding the calendar year for which the rate is being annually fixed, for any period thereafter.

For the purposes of this subsection:

(1) Any return filed before the last day prescribed for the filing thereof shall be considered as filed on such last day, determined without regard to any extension of time granted the taxpayer;

(2) any tax paid by the taxpayer before the last day prescribed for its payment, any income tax withheld from the taxpayer during any calendar year and any amount paid by the taxpayer as estimated income tax for a taxable year shall be deemed to have been paid on the last day prescribed for filing the return for the taxable year to which such amount constitutes a credit or payment, determined without regard to any extension of time granted the taxpayer;

(3) if any overpayment of tax results from a carryback of a net oper- ating loss or net capital loss, such overpayment shall be deemed not to have been made prior to the close of the taxable year in which such net operating loss or net capital loss arises. For purposes of this paragraph, the return for the loss year shall not be deemed to be filed before claim for such overpayment is filed;

(4) in the case of a credit, interest shall be allowed and paid from the date of the overpayment to the due date of the amount against which the credit is taken, except that if any overpayment of income tax is claimed as a credit against estimated tax for the succeeding taxable year, such amount shall be considered as a payment of the income tax for the suc- ceeding taxable year, whether or not claimed as a credit in the return of estimated tax for such succeeding taxable year, and no interest shall be allowed or paid in such overpayment for the taxable year in which the overpayment arises;

(5) in the case of a tax return which is filed after the last date pre- scribed for filing such return, determined with regard to extensions, no interest shall be allowed or paid for any period before the date on which the return is filed;

(6) in the case of a refund, interest shall be allowed and paid from the date of the overpayment to a date preceding the date of the refund check by not more than 30 days, as determined by the director, whether or not such refund check is accepted by the taxpayer after tender of such check to the taxpayer, but acceptance of such check shall be without prejudice to any right of the taxpayer to claim any additional overpayment and interest thereon; and

(7) if any overpayment is refunded within two months after the last date prescribed, or permitted by extension of time, for filing the return of such tax, or within two months after the return was filed, whichever is later, no interest shall be allowed or paid. For the purposes of this section, an overpayment shall be deemed to have been refunded at the time the refund check in the amount of the overpayment, plus any interest due thereon, is deposited in the United States mail.

Sec. 11. K.S.A. 1995 Supp. 74-8920 is hereby amended to read as follows: 74-8920. (a) Before the Kansas development finance authority issues any bonds for any state agency project or a project or investment under the SKILL IMPACT act, the authority shall conduct a feasibility analysis and recommend to the secretary of administration any project which appears appropriate for consideration to offer to the pooled money investment board as an alternative investment. If the secretary of admin- istration approves the recommendation, the secretary shall give notice of such approval to the chairperson of the pooled money investment board in writing. If the pooled money investment board and the secretary of administration reach agreement on the terms and conditions of the fi- nancing, the pooled money investment board may invest in any such pro- ject.

(b) Unless the pooled money investment board has declined the in- vestment, the Kansas development finance authority shall not proceed to issue bonds for any project offered to the pooled money investment board until at least 15 days after the secretary of administration's notice to the pooled money investment board under subsection (a).

(c) The authority shall give notice to the pooled money investment board of the public sale of bonds for any state agency or SKILL IMPACT act projects. The pooled money investment board is authorized to pur- chase any such bonds.

Sec./007006/K.S.A. 74-50,102, 74-50,103, 74-50,104, 74-50,105, 74- 50,106, 74-50,107, 74-50,108, 74-50,109, 74-50,110 and K.S.A. 1995 Supp. 74-8920 and 79-32,105 are hereby repealed.

Sec./007006/This act shall take effect and be in force from and after its publication in the statute book.

Approved May 11, 1996.