An Act concerning Kansas, Inc. relating to the duties and organization thereof; amending K.S.A. 74-8003, 74-8006, 74-8007, 74-8009a, 74-8010 and 74-8011 and K.S.A. 1995 Supp. 74-8001, 74-8002, 74-8004 and 74-8005 and repealing the existing sections; and also repealing K.S.A. 74-8008.

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

Section 1. K.S.A. 74-8003 is hereby amended to read as follows: 74- 8003. (a) The governor shall serve as co-chair of Kansas, Inc. The other co-chair shall be elected from among the private sector members. A vice- chair shall be elected from among all the members. Kansas, Inc. shall meet at least once each calendar quarter and at such other times desig- nated upon the call of the governor or determined by the board of direc- tors.

(b) Members of Kansas, Inc. attending meetings thereof, or attending a subcommittee meeting thereof authorized by Kansas, Inc., shall be paid amounts provided in subsection (e) of K.S.A. 75-3223 and amendments thereto.

Sec. 2. K.S.A. 74-8006 is hereby amended to read as follows: 74- 8006. Kansas, Inc. shall publish an annual report for the governor, leg- islature, citizens and media of Kansas. The report shall include:

(a) An analysis of the current state of and emerging trends in the Kansas economy over the next decade.

(b) An evaluation of the effectiveness of state economic development policies and programs in meeting the goals of the state economic plan by size of enterprise, sector of economic activity and location within Kansas, and in comparison with other states.

(c) A listing in order of priority of recommendations for initiatives that will further the effective implementation of the state economic de- velopment plan.

(d) A synopsis of the activities of Kansas, Inc. during the previous fiscal year.

(e) The report shall be transmitted to the governor and legislature on the first day of each fiscal year following the first year of operation of Kansas, Inc annually to the governor and the legislature on October 1 in coordination with the Kansas technology enterprise corporation and the department of commerce and housing.

Sec. 3. K.S.A. 74-8007 is hereby amended to read as follows: 74- 8007. The secretary of commerce and housing shall provide to Kansas, Inc. such staff and other assistance as may be requested thereby.

Sec. 4. K.S.A. 74-8009a is hereby amended to read as follows: 74- 8009a. (a) Kansas, Inc. is a public-private partnership. Its annual budget shall be financed 67% with state funds and 33% with funds raised from the private sector. The state shall provide an annual appropriation to fund the salaries and operating expenses of the agency, as well as research and evaluation activities conducted at the request of the executive or legisla- tive branches. Private funds shall be raised to support the economic de- velopment research and education programs and related activities.

(b) Kansas, Inc. is authorized to enter into contracts with, and to receive donations, contributions and grants from individuals, corpora- tions, private foundations and other governmental and non-governmental entities for the purpose of fulfilling its mission and duties. It may also receive in-kind contributions in the form of personnel, services, equip- ment or other items of value. The fair market value of property or services received by donations in kind to Kansas, Inc., as determined in accor- dance with a consistent, written policy adopted by the members of Kan- sas, Inc., may be considered for the purpose of fulfilling up to 20% of the funding required from the private sector hereunder. Private sector funds, property and services may be raised and received throughout the fiscal year for which state funds are appropriated.

(c) The president of Kansas, Inc. shall provide a monthly report on the expenditure of private funds to the division of accounts and reports. An annual financial report shall be made to the board of directors which itemizes and accounts for the receipt and expenditure of all non-state funds and contributions received. The annual financial report shall detail the percentage of the agency's budget provided for by the state and by the private sector.

Sec. 5. K.S.A. 74-8010 is hereby amended to read as follows: 74- 8010. (a) Seven years after the effective date of this act, Kansas, Inc. shall review and evaluate the effectiveness of economic development programs and activities within the state, including, but not by way of limitation, the Kansas technology enterprise corporation programs and activities, the major programs and activities of the department of commerce and hous- ing, the statewide risk capital system, the venture capital tax credit, and the research and development activities tax credit. The effectiveness of the research and development activities tax credit shall be measured by the extent to which the tax credit encourages innovation and development of new value-added products and processes which will lead to the com- mercialization of new products and processes by primary job creating Kansas businesses.

(b) Kansas, Inc. will have one year to shall periodically conduct the a review and evaluation of economic development programs and activi- ties. The review and evaluation should include:

(1) A performance analysis of the extent to which the purposes of the acts providing for the programs and activities have been achieved; and

(2) the economic and fiscal impact of the programs and activities on the state's economy and jobs created.

(c) Based on the findings of its review and evaluation, Kansas, Inc. will recommend to the legislature the continuation in effect, modification, or repeal of the acts providing for the programs and activities.

Sec. 6. K.S.A. 74-8011 is hereby amended to read as follows: 74- 8011. Four years after the effective date of this act, The joint legislative committee on economic development shall review and evaluate the ef- fectiveness of Kansas, Inc. The effectiveness of Kansas, Inc. shall be meas- ured by the extent to which it achieves the purposes ascribed to it by this act.

Sec. 7. K.S.A. 1995 Supp. 74-8001 is hereby amended to read as follows: 74-8001. (a) There is hereby created a body politic and corporate to be known as Kansas, Inc. Kansas, Inc. is hereby constituted a public instrumentality and the exercise of the authority and powers conferred by this act shall be deemed and held to be the performance of an essential governmental function. Kansas, Inc. shall consist of 15 17 predominately private sector members as follows:

(1) The governor of Kansas;

(2) the secretary of the Kansas department of commerce and housing;

(3) seven nine members who are appointed by the governor, subject to confirmation by the senate as provided in K.S.A. 75-4315b, and amend- ments thereto. Except as provided by K.S.A. 1995 Supp. 46-2601, and amendments thereto, no person appointed pursuant to this paragraph shall exercise any power, duty or function as a member of Kansas, Inc. until confirmed by the senate. Such members shall be appointed as follows:

(A) One member from each of the primary economic sectors in the state--agriculture, oil and gas, and aviation--who are recognized for out- standing knowledge and leadership in their fields;

(B) one member from one other primary, job creating, value added business sector who is recognized for outstanding knowledge and lead- ership in the member's field;

(C) two members from the private financial sector, one of whom shall have experience in the area of high-risk venture investments, and one of whom shall have commercial banking experience in an industry of special importance to the Kansas economy, and both of whom are recognized for outstanding knowledge and leadership in their fields;

(D) one member representing labor who is recognized for outstand- ing knowledge and leadership in the member's field;

(E) one member from the professional and business services sector who is recognized for outstanding knowledge and leadership in the mem- ber's field;

(F) one member who owns a small business and who is recognized for outstanding knowledge and leadership in that community of interest;

(4) one member who serves as the commanding general of the Kansas cavalry;

(5) one member who is appointed by the state board of regents from a Kansas university and who is recognized for outstanding knowledge and leadership in the field of economic development;

(6) the speaker of the house, the house minority leader, the president of the senate, and the senate minority leader or legislators who are ap- pointed to represent them and who will provide continuity by virtue of their membership on the standing committee on commerce of the senate, the standing committee on economic development of the house of rep- resentatives or the joint committee on economic development.

(b) (1) State officers who are designated as members of Kansas, Inc. under subsection (a)(1),(2),(4) and(6) shall serve by virtue of office or position.

(2) Members appointed under subsection (a)(6) shall be appointed for a term ending on the first day of the regular legislative session in odd- numbered years.

(3) Except as provided by paragraph (5) of this subsection, the mem- ber appointed under subsection (a)(5) shall serve for a term of four years.

(4) Members appointed under subsection (a)(3) shall serve for a term of four years, except that, of the members first appointed, two shall serve for a term of two years, three shall serve for a term of three years, and two shall serve for a term of four years.

(5) The terms of members appointed under paragraphs (3) and (5) of subsection (a) and who are serving on Kansas, Inc. on the effective date of this act shall expire on January 15, of the year in which such member's term would have expired under the provisions of this section prior to amendment by this act. Thereafter, members shall be appointed for terms of four years and until their successors are appointed and con- firmed.

(6) In case of a vacancy in the appointive membership of Kansas, Inc., a successor shall be appointed in like manner and subject to the same qualifications and conditions as the original appointment of the member creating the vacancy.

Sec. 8. K.S.A. 1995 Supp. 74-8002 is hereby amended to read as follows: 74-8002. (a) The purpose of Kansas, Inc. shall be to:

(1) Undertake ongoing strategic analysis in order to determine the state's areas of potential and continuing competitive economic advantage and disadvantage;

(2) oversee the formulation of economic development policy and stra- tegic planning for the state;

(3) oversee the targeting of scarce state resources by size and sector of economic activity and by geographic location within the state in order to enhance the state's potential comparative economic advantages;

(4) undertake continuing strategic planning for the improvements of the state's tax, regulatory and expenditure policies to enhance the state's potential comparative economic advantages;

(5) oversee crisis management and opportunity management of short term potential gains or losses in economic activity through impact analysis;

(6) serve in an advisory capacity to the Kansas department of com- merce and housing;

(7) provide appropriate oversight to ensure the successful implemen- tation of Kansas venture capital, Inc.

(8) forge a supportive partnership with the standing committee on commerce of the senate, the standing committee on economic develop- ment of the house of representatives and the joint committee on eco- nomic development, the governor and the secretary of commerce and housing, the Kansas technology enterprise corporation, Kansas venture capital, Inc., Kansas certified development companies, Kansas small busi- ness development centers, Kansas public and private educational insti- tutions, and other appropriate private and public sector organizations in achieving the economic goals of the state;

(9) establish goals, priorities and program standards, and evaluate the effectiveness of state economic development programs and policies ac- cording to the goals, priorities and standards established;

(10) institutionalize ongoing means of collaboration between the ex- ecutive and legislative branches, the business, agricultural and financial sectors, educational institutions and local communities to create a devel- oping Kansas economy the increasing innovation, creativity, diversity and productivity of which is greater than any one sector can achieve acting alone; and

(11) review and evaluate the Kansas technology enterprise corpora- tion, the major programs and activities of the department of commerce and housing, the statewide risk capital system, the venture capital tax credit, and the investments in research and development activities tax credit.

Sec. 9. K.S.A. 1995 Supp. 74-8004 is hereby amended to read as follows: 74-8004. (a) In order to achieve its purpose as provided in this act, Kansas, Inc. shall:

(1) Serve in an advisory capacity to the governor, the Kansas depart- ment of commerce and housing and the standing committee on com- merce of the senate, the standing committee on economic development of the house of representatives and the joint committee on economic development.

(2) Assume central responsibility to develop, with the guidance of both the private and public sectors, all facets of a comprehensive long term economic development strategy.

(3) Coordinate the strategy development with all other state and local agencies and offices and state educational institutions which do research work, develop materials and programs, gather statistics, or which perform functions related to economic development; and such state and local agencies and offices and state educational institutions shall advise and cooperate with Kansas, Inc. in the planning and accomplishment of the strategy.

(4) Evaluate and analyze the state's economy to guide the direction of future public and private actions, and report and make recommenda- tions to the governor, the department of commerce and housing, and the standing committee on commerce of the senate, the standing committee on economic development of the house of representatives and the joint committee on economic development with respect to the state's economy.

(5) Oversee and evaluate the state's economic development activities on an ongoing basis through the establishment of goals, priorities per- formance standards and the periodic program audit of those goals, pri- orities and performance standards.

(6) Oversee the implementation of the state's economic development plan and monitor updates of that plan.

(7) Provide appropriate oversight to ensure the successful implemen- tation of Kansas venture capital, Inc.

(8) Oversee the targeting of scarce state resources by size and sector of economic activity and by geographic location within the state in order to enhance the state's potential comparative economic advantages.

(9) Review and evaluate the state economic development plan de- veloped by the department of commerce and housing . Updates of the plan shall be submitted to Kansas, Inc. by the department no later than July 15 of each year. Kansas, Inc. shall review, evaluate and make rec- ommendations concerning the plan and updates thereof before transmit- ting the same to the governor and the legislature no later than September 1 of each year.

(10) (9) Review and evaluate the annual reports of the department of commerce and housing, Kansas technology enterprise corporation and Kansas venture capital, Inc. Kansas, Inc. shall transmit recommendations concerning the agencies' activities to the governor and the legislature no later than September 1 of each year.

(b) Kansas, Inc. shall seek advice from the general public and from professional associations, academic groups and institutions and individuals with knowledge of and interest in areas of economic development and planning.

(c) The department of commerce and housing and all other inter- ested state agencies shall cooperate with Kansas, Inc. in providing infor- mation and other assistance as may be requested for the performance of its duties with respect to the state's economic development plan.

Sec. 10. K.S.A. 1995 Supp. 74-8005 is hereby amended to read as follows: 74-8005. (a) Kansas, Inc., subject to the approval of the governor, shall hire a person to serve as chief executive officer and president of Kansas, Inc. Kansas, Inc. shall conduct a national search and select a corporation president who meets a national standard of experience, ability and initiative for similar positions. The president shall be in the unclas- sified service under the Kansas civil service act and shall serve at the pleasure of Kansas, Inc. Kansas, Inc. may negotiate and enter into an employment agreement with the individual selected as corporation pres- ident which may provide for such compensation and such provisions for allowances, benefits and expenses as may be included in such agreement. Kansas, Inc. is authorized to make all payments and payroll deductions as may be required under such agreement.

(b) The president shall direct and supervise the general management of the corporation and a small core staff of analysts. The president:

(1) May employ and terminate such other employees as designated by the members of Kansas, Inc. Such employees shall be in the unclas- sified service under the Kansas civil service act;

(2) shall attend board meetings; and

(3) shall keep a record of all proceedings and maintain and be cus- todian of all financial and operational records, documents and papers filed with Kansas, Inc.; and

(4) as a first priority, shall prepare a business plan which shall be approved by the members of Kansas, Inc. and be submitted for review and comment to the standing committee on commerce of the senate, the committee on economic development of the house of representatives or the joint committee on economic development.

(c) Kansas, Inc. is hereby authorized to negotiate and enter into con- tracts for professional consulting and research services in collaboration, and may enter into such contracts jointly with the department of com- merce and housing.

(d) Kansas, Inc. is authorized to accept gifts, donations and grants.

(e) Kansas, Inc. is not subject to state purchasing laws.

Sec. 11. K.S.A. 74-8003, 74-8006, 74-8007, 74-8008, 74-8009a, 74- 8010 and 74-8011 and K.S.A. 1995 Supp. 74-8001, 74-8002, 74-8004 and 74-8005 are hereby repealed.

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

Approved March 29, 1996.