CHAPTER 137
HOUSE BILL No. 2071
(Amends Chapter 132)
An  Act relating to transportation; providing for a comprehensive transportation program;
concerning the financing thereof; amending K.S.A. 12-1,119, 68-2033, 68-2073, 68-2096,
68-2315, 68-2316, 68-2320, 75-5032, 75-5033, 75-5034, 75-5035, 75-5037, 75-5046, 75-
5048, 75-5053, 75-5056, 75-5061, 79-3425, 79-3425c, 79-3491a, 79-3492b, 79-34,104,
79-34,118, 79-34,126, 79-34,141, 79-34,142, 79-34,161 and 79-34,162 and K.S.A. 1998
Supp. 68-416, 68-2321, 79-3408c and 79-34,147 and repealing the existing sections; also
repealing K.S.A. 66-231a, 66-231b, 68-402e, 68-417, 68-417a, 68-417b, 68-2318, 79-
3425d and 79-34,143 and K.S.A. 1998 Supp. 68-2314 and 79-34,147, as amended by
section 96 of 1999 Senate Bill No. 325.

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

      New Section  1. (a) In order to plan, develop and operate or coor-
dinate the development and operation of the various modes and systems
of transportation within the state, the secretary of transportation is hereby
authorized and directed to initiate a comprehensive transportation pro-
gram.

      (b) The comprehensive transportation program shall provide for the
construction, improvement, reconstruction and maintenance of the state
highway system. These expenditures may include but not be limited to
the following:

      (1) Maintenance programs to efficiently maintain a safe state highway
system in its original or improved condition. It is the intent of the legis-
lature that the surface condition of the state highway system and its
bridges, as measured by the Kansas department of transportation pave-
ment and bridge management systems, shall be maintained or improved;

      (2) construction and reconstruction programs to develop, to the ex-
tent practical, the state highway system including major modification pro-
jects to improve service, comfort, capacity, condition, economy or safety
of the existing system and priority bridge projects to replace or rehabili-
tate bridges that have a deteriorated condition or that have deficiencies
in load carrying capacity, width or traffic service;

      (3) system enhancement projects which include additions to the sys-
tem of highways or which substantially improve safety, relieve congestion,
improve access or enhance economic development. It is the intent of the
legislature that, as nearly as possible, the amount of $1,050,000,000 shall
be expended or committed to be expended for system enhancements for
the period beginning July 1, 1999, through June 30, 2009. The Kansas
department of transportation shall utilize the selection methodology de-
veloped by the department, to select system enhancement projects;

      (4) a highway demonstration project for the purpose of demonstrat-
ing advanced and innovative pavement technologies which may include
financing, design, construction and performance guarantee. The secretary
is authorized to procure such demonstration project in the same manner
as engineering services are procured under K.S.A. 75-5801, et seq., and
amendments thereto, and such demonstration project need not comply
with the provisions of K.S.A. 68-410 or 75-430a, and amendments thereto,
or any other applicable statute to the procurement of state highway con-
struction contracts.

      (c) The comprehensive transportation program shall provide for as-
sistance, including credit and credit enhancements, to cities and counties
in meeting their responsibilities for the construction, improvement, re-
construction and maintenance of the roads and bridges not on the state
highway system. These expenditures may include but not be limited to
the following:

      (1) Apportionment of the special city and county highway fund to
assist cities and counties with their responsibilities for roads and bridges
not on the state highway system;

      (2) programs to share federal aid with cities and counties to assist
with their responsibilities for roads and bridges not on the state highway
system;

      (3) programs to assist cities with the maintenance of city connecting
links as specified in K.S.A. 68-416, and amendments thereto, and local
partnership programs to resurface or geometrically improve city con-
necting links or to promote economic development; or

      (4) programs to assist cities and counties with railroad crossings of
roads not on the state highway system.

      (d) The comprehensive transportation program shall provide for a
railroad program to provide assistance in accordance with K.S.A. 75-5040
through 75-5050, and amendments thereto, for the preservation and re-
vitalization of rail service in the state.

      (e) The comprehensive transportation program shall provide for an
aviation program to provide assistance for the planning, constructing, re-
constructing or rehabilitating the facilities of public use general aviation
airports, in accordance with K.S.A. 75-5061, and amendments thereto.

      (f) The comprehensive transportation program shall provide for pub-
lic transit programs to aid elderly persons, persons with disabilities and
the general public, in accordance with K.S.A. 75-5032 through 75-5038,
and amendments thereto, and K.S.A. 75-5051 through 75-5058, and
amendments thereto.

      New Sec.  2. The secretary of transportation is hereby authorized to
establish a transportation revolving fund to provide assistance to govern-
mental units for transportation projects.

      New Sec.  3. As used in sections 2 through 8:

      (a) ``Cost'' means as applied to any qualified project, any or all costs,
whenever incurred, approved by the department, for carrying out a qual-
ified project;

      (b) ``department'' means the Kansas department of transportation es-
tablished under K.S.A. 75-5001, and amendments thereto;

      (c) ``fund'' means the Kansas transportation revolving fund estab-
lished by section 5;

      (d) ``governmental unit'' means any town, city, district, county, com-
mission, agency, authority, board or other instrumentality of the state or
of any of its political subdivisions, including any combination thereof,
which is responsible for the construction, ownership or operation of a
qualified project;

      (e) ``private enterprise'' means a private person or entity that has en-
tered into a contract with a public authority to design, finance, construct
and/or operate a qualified project that is within the jurisdiction of such
public authority;

      (f) ``project'' means the acquisition, construction, improvement, re-
pair, rehabilitation, maintenance or extension of transportation facilities;

      (g) ``project costs'' means all costs or expenses which are necessary
or incident to a project and which are directly attributable thereto;

      (h) ``project revenues'' means all rates, rents, fees, assessments,
charges and other receipts derived or to be derived by a qualified bor-
rower from a qualified project;

      (i) ``qualified borrower'' means any governmental unit or private en-
terprise which is authorized to construct, operate or own a qualified pro-
ject;

      (j) ``qualified project'' means any public or private transportation pro-
ject, including, without limitation, the construction, reconstruction, re-
surfacing, restoration, rehabilitation or replacement of public or private
transportation facilities within the state;

      (k) ``revenues'' means when used with respect to the department, any
receipts, fees, revenues or other payments received or to be received by
the department under sections 2 through 8;

      (l) ``secretary'' means the secretary of the Kansas department of trans-
portation;

      (m) ``transportation project'' means any bridge, culvert, highway,
road, street or combination thereof.

      New Sec.  4. (a) The secretary shall administer the provisions of sec-
tions 2 through 8 and shall be responsible for the administration and
management of the fund, and shall have the power to enter into agree-
ments and contracts and to transfer money between the state highway
fund and the fund as required to effect the purposes of sections 2 through
8.

      (b) The secretary shall adopt rules and regulations, to carry out the
purposes and provisions of sections 2 through 8.

      New Sec.  5. (a) There is hereby established in the state treasury a
fund to be known as the Kansas transportation revolving fund which shall
consist of the following:

      (1) Amounts appropriated or otherwise made available by the legis-
lature for the purposes of the fund;

      (2) the proceeds, if any, from the sale of bonds issued pursuant to
section 6 for the purposes of the fund to the extent provided in any
agreement entered into between the secretary and the Kansas develop-
ment finance authority;

      (3) amounts of repayments made by qualified borrowers of loans re-
ceived under sections 2 through 8, together with payments of interest
thereon, in accordance with agreements entered into between such qual-
ified borrowers and the secretary;

      (4) amounts earned on moneys in the fund;

      (5) amounts contributed or otherwise made available by any public
or private entity for use in effectuating the purposes of the fund; and

      (6) amounts transferred by order of the secretary from the state high-
way fund.

      (b) Subject to the provisions of sections 2 through 8, expenditures
from the fund shall be made for the following purposes:

      (1) For the payment of the principal, including sinking fund payments
of and premium, if any, and interest on bonds issued pursuant to sections
2 through 8;

      (2) for providing financial assistance to qualified borrowers to finance
qualified projects;

      (3) for the maintenance of, or provision for, any reserves, additional
security, insurance or other form of credit enhancement to secure such
bonds required or provided for in any trust agreement entered into pur-
suant to sections 2 through 8;

      (4) to guarantee, purchase insurance or provide other credit enhance-
ment for bonds of qualified borrowers issued to finance the costs of qual-
ified projects;

      (5) to provide reserves for or otherwise secure bonds issued pursuant
to sections 2 through 8 and to provide insurance or other credit enhance-
ment for such bonds;

      (6) to provide reserves for, or to otherwise secure, amounts payable
by qualified borrowers on loans made by and leases with the department
in the event of default by a particular qualified borrower or, on a parity
basis, by any qualified borrower;

      (7) to provide a subsidy for, or to otherwise assist, qualified borrowers
in the payment of debt service costs on loans made by the department
hereunder;

      (8) for administrative costs of the fund or for any of the foregoing;
and

      (9) the transfer of money by order of the secretary to the state high-
way fund.

      New Sec.  6. The activities of the department in administering and
performing the powers, duties and functions prescribed by the provisions
of sections 2 through 8 are hereby approved for the purposes of subsec-
tion (b) of K.S.A. 74-8905, and amendments thereto and the authorization
of issuance of 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.

      New Sec.  7. (a) Qualified borrowers which desire assistance in the
form of a loan, credit enhancement or grant under sections 2 through 8
shall submit an application therefor to the secretary. Applications shall
be in such form and shall include such information as the secretary shall
require and shall be submitted in a manner and at a time to be determined
by the secretary.

      (b) The secretary may enter into agreements with any qualified bor-
rower for payment of all or a part of project costs and any governmental
unit may enter into such an agreement and may accept such assistance
when so authorized by its governing body.

      (c) The secretary shall provide any governmental unit, upon its re-
quest, with technical advice and assistance regarding a project or an ap-
plication for assistance. The secretary may assess reasonable fees for pro-
viding such assistance.

      New Sec.  8. (a) Upon the failure of a governmental unit to meet the
repayment terms and conditions of an agreement, the secretary may order
the state treasurer to pay to the fund such portion of the governmental
unit's share of the special city and county highway fund as may be nec-
essary to meet the terms of the agreement.

      (b) Any loans received by a governmental unit under the provisions
of sections 2 through 8 shall be construed to be bonds for the purposes
of K.S.A. 10-1116 and 79-5028, and amendments thereto, and the amount
of such loans shall not be included within any limitation on the bonded
indebtedness of the governmental unit.

      Sec.  9. K.S.A. 12-1,119 is hereby amended to read as follows: 12-
1,119. The governing body of any city may provide, by ordinance, for a
consolidated street and highway fund to which may be credited moneys
received by the city from state payments under the provisions of K.S.A.
68-416 and 79-3425c, and amendments thereto. The ordinance creating
such fund also may provide for annually budgeting the transfer of moneys
in the general or other operating funds of the city budgeted for street
and highway purposes to the consolidated street and highway fund. Mon-
eys in such fund shall be used solely for street and highway purposes.
Moneys received pursuant to subsection (b)(3) (a) of K.S.A. 68-416, and
amendments thereto, and credited to such fund shall be used solely for
the maintenance of streets and highways in the city designated by the
secretary of transportation as city connecting links.

      Sec.  10. K.S.A. 1998 Supp. 68-416 is hereby amended to read as
follows: 68-416. (a) All funds received by the various counties from the
sale of benefit-district bonds heretofore or hereafter issued, under the
provisions of K.S.A. 68-701 and 68-709, and amendments thereto, shall
be transferred by the county treasurers to the state treasurer to be placed
in the highway fund. Such amounts shall be expended in the counties
from which they are received and for the purposes for which such bonds
were issued. Nothing in this act shall be construed to relieve any county
in which a benefit district has been organized under the provisions of
K.S.A. 68-701 et seq., and amendments thereto, from the duty and liability
to issue and sell bonds under the provisions thereof in the amount nec-
essary to pay such part of the cost of the construction of such benefit
district roads in the benefit district required to be paid by the county,
township and benefit district. Any unexpended balance remaining in the
fund in which is placed that part of the fees for registration sent to the
vehicle department or other official designated by law to receive the same,
and appropriated for use in the administration of the motor-vehicle reg-
istration act, unexpended at the end of any calendar year, shall be placed
in the highway fund.

      (b) The state highway fund shall be apportioned as follows:

      (1) The fund known as the ``state highway benefit district fund'' is
discontinued and hereafter the highway fund shall be used for the pay-
ment and reimbursement of benefit district costs and assessments for
such benefit districts that have been and may hereafter be constructed
as a part of the state highway system. On the effective date of this act the
state treasurer shall transfer all state highway benefit district funds to the
highway fund.

      (2) (a) The secretary of transportation annually shall apportion and
distribute quarterly, on the first day of January, April, July and October,
to cities on the state highway system from the state highway fund moneys
at the rate of $2,000 $3,000 per year per lane per mile for the mainte-
nance of streets and highways in cities designated by the secretary as city
connecting links. Unless a consolidated street and highway fund is estab-
lished pursuant to K.S.A. 12-1,119, and amendments thereto, all moneys
distributed by the secretary shall be credited to the street and alley funds
of such cities. All moneys so distributed shall be used solely for the main-
tenance of city connecting links. Maintenance of such city connecting
links shall be as prescribed in K.S.A. 68-416a, and amendments thereto.
As used in this subsection, ``lane'' means the portion of the roadway for
use of moving traffic of a standard width prescribed by the secretary. In
lieu of such apportionment, the secretary, by and with the consent of the
governing body of any city within the state of Kansas, may maintain such
streets within the city and pay for such maintenance from the highway
fund.

      (3) (b) All of the remainder of such highway fund shall be used by
the secretary of transportation for: (A)

      (1) The construction, improvement, reconstruction and maintenance
of the state highway system;

      (B)(2) improvements in transportation programs to aid the elderly
and disabled; (C) elderly persons, persons with disabilities and the general
public;

      (3) for any purpose specified in section 1;

      (4) the support and maintenance of the department of transportation;
(D)

      (5) the expenses of administering the motor vehicle registration and
drivers' license laws; and (E)

      (6) the payment of losses to department of transportation employees
authorized by K.S.A. 1998 Supp. 75-5062, and amendments thereto. All
apportionments and distribution provided for by this section shall be
made quarterly on the first day of January, April, July and October of
each year.

      Sec.  11. K.S.A. 68-2033 is hereby amended to read as follows: 68-
2033. The secretary of transportation and the authority are hereby au-
thorized and empowered to make and enter into any and all contracts
and agreements, including (but without limitation) any contract or agree-
ment for the removal or construction of any bridge or other highway
facility which they may deem necessary, desirable or incidental to the
financing, construction, maintenance, repair or operation of any turnpike
project financed under the provisions of this act.

      With respect to any turnpike project financed under the provisions of
this act, the secretary is authorized and empowered to contract or agree
with the authority to pay to the authority from the state highway fund,
upon order or voucher of the secretary of transportation in the manner
provided by law to the director of accounts and reports, in each year, such
amount or amounts as shall be required in such year to make up any
deficiency in the revenues received from the operation and ownership of
such turnpike project in such year, over and above the cost of mainte-
nance, repair and operation of such turnpike project incurred in such
year; (i) for paying the interest on all turnpike revenue bonds or turnpike
revenue refunding bonds issued by the authority in connection with such
turnpike projects; (ii) for retiring such bonds by their maturity or matur-
ities; and (iii) for paying the premium, if any, on a specified aggregate
principal amount of such bonds which would be payable in such year if
such principal amount of bonds were to be redeemed prior to their ma-
turity or maturities. The amount which is required in each such year to
provide for paying the interest on such bonds and for retiring such bonds
by their maturity or maturities shall be determined as provided in such
contract or agreement. Any such payments required to be made pursuant
to such contract or agreement may be pledged or assigned by the au-
thority in the same manner as tolls and other revenues of such turnpike
project. Any such contract or agreement shall provide for reimbursement
by the authority, from tolls or other revenues of such turnpike projects,
to the secretary of transportation for the credit of the state highway fund,
at any time or times and under such terms and conditions as may be set
forth therein, of any amounts previously paid to the authority by the
secretary pursuant to the provisions of this paragraph: Provided, how-
ever,, except that if the revenues received from the operation and own-
ership of such turnpike project in any year, over and above the cost of
maintenance, repair and operation of such turnpike project incurred in
such year, shall exceed one hundred fifty percent (150%) 150% of clauses
(i), (ii) and (iii) above for such year, such excess must be reimbursed to
the secretary, for the credit of the state highway fund, until all amounts
previously paid to the authority by the secretary of transportation have
been reimbursed to said the secretary.

      Any payments provided to be made in any year pursuant to the pro-
visions of this section to the authority from the state highway fund shall
be a lien and claim on the portion of said the highway fund which is made
available to the secretary of transportation by the provisions of subsection
(4) of K.S.A. 68-416, and amendments thereto, to be used by said secretary
in the construction, improvement, reconstruction and maintenance of the
state highway system and the support and maintenance of the department
of transportation and the expenses of administering the motor vehicle
registration and drivers license laws; but any such payments provided to
be made shall not be a lien or claim on any of the sums now provided by
subsections (1), (2) and (3) of K.S.A. 68-416: Provided, however,, and
amendments thereto, except that the secretary of transportation and the
authority may determine any priority as to lien and claim on said the fund
as between any such payments to the authority from said the fund on
account of any turnpike projects financed under the provisions of this act.
The laws of Kansas shall not be repealed or amended so as to cause the
moneys available in the state highway fund for making any payments to
the authority provided to be made pursuant to the provisions of this sec-
tion to be insufficient to make any such payments.

      The provisions of any contract or agreement entered into pursuant to
the provisions of this section may be enforced by the authority or by the
trustee under any trust agreement authorized by the provisions of K.S.A.
68-2038, and amendments thereto.

      Sec.  12. K.S.A. 68-2073 is hereby amended to read as follows: 68-
2073. The secretary of transportation and the authority are hereby au-
thorized and empowered to make and enter into any and all contracts
and agreements, including (but without limitation) any contract or agree-
ment for the removal or construction of any bridge or other highway
facility which they may deem necessary, desirable or incidental to the
financing, construction, maintenance, repair or operation of any highway
project financed under the provisions of this act.

      With respect to any highway project financed under the provisions of
this act, the secretary of transportation is authorized and empowered to
contract or agree with the authority to pay to the authority from the state
highway fund, upon order or voucher of the secretary in the manner
provided by law to the director of accounts and reports, in each year, such
amount or amounts as shall be required in such year to make up any
deficiency in the revenues received from the operation and ownership of
any highway project in such year, over and above the cost of maintenance,
repair and operation of such highway project and the creation of reserves
for such purposes in such year, (i) for paying the interest on all highway
revenue bonds or highway revenue refunding bonds issued by the au-
thority in connection with any such highway project, (ii) for retiring such
bonds by their maturity or maturities, and (iii) for paying the premium,
if any, on a specified aggregate principal amount of such bonds which
would be payable in such year if such principal amount of bonds were to
be redeemed prior to their maturity or maturities. The amount which is
required in each such year to provide for paying the interest on such
bonds and for retiring such bonds on or prior to their maturity or matur-
ities shall be determined as provided in such contract or agreement. Any
such payments required to be made pursuant to such contract or agree-
ment may be pledged or assigned by the authority in the same manner
as tolls and other revenues of such highway project. Any such contract or
agreement shall provide for reimbursement by the authority, from tolls
or other revenues of such highway project to the secretary of transpor-
tation for the credit of the state highway fund, at any time or times and
under such terms and conditions as may be set forth therein, if any
amounts previously paid to the authority by the secretary pursuant to the
provisions of this paragraph: Provided, however,, except that if the reve-
nues received from the operation and ownership of such highway project
in any year, over and above the cost of maintenance, repair and operation
of such highway project incurred in such year, shall exceed one hundred
fifty percent (150%) 150% of clauses (i), (ii) and (iii) above for such year,
such excess must be reimbursed to the secretary of transportation, for
the credit of the state highway fund, until all amounts previously paid to
the authority by the secretary of transportation have been reimbursed to
the secretary.

      Any payments provided to be made in any year pursuant to the pro-
visions of this section to the authority from the state highway fund shall
be a lien and claim on the portion of said the highway fund which is made
available to the secretary of transportation by the provisions of subsection
(b)(4) of K.S.A. 68-416, and amendments thereto, to be used by said
secretary in the construction, improvement, reconstruction and mainte-
nance of the state highway system and the support and maintenance of
the department of transportation and the expenses of administering the
motor vehicle registration and drivers license laws; but any such payments
provided to be made shall not be a lien or claim on any of the sums now
provided by subsections (b)(1), (2) and (3) of K.S.A. 68-416, and amend-
ments thereto, and such payments shall be subject to any prior lien
thereon, if any, created by similar contract heretofore made and entered
into by and between the secretary of transportation and the Kansas turn-
pike authority: Provided, however,, except that the secretary and the au-
thority may determine any priority as to lien and claim on said the fund
as between any such payments to the authority from said the fund on
account of any highway projects financed under the provisions of this act.
The laws of Kansas shall not be repealed or amended so as to cause the
moneys available in the state highway fund for making any payments to
the authority provided to be made pursuant to the provisions of this sec-
tion to be insufficient to make any such payments.

      The provisions of any contract or agreement entered into pursuant to
the provisions of this section may be enforced by the authority or by the
trustee under any trust agreement authorized by the provisions of K.S.A.
68-2078, and amendments thereto.

      Sec.  13. K.S.A. 68-2096 is hereby amended to read as follows: 68-
2096. The secretary of transportation and the authority are hereby au-
thorized and empowered to make and enter into any and all contracts
and agreements, including (but without limitation) any contract or agree-
ment for the removal or construction of any bridge or other highway
facility which they may deem necessary, desirable or incidental to the
financing, construction, maintenance, repair or operation of any highway
project financed under the provisions of this act.

      With respect to any highway project financed under the provisions of
this act, the secretary of transportation is authorized, empowered and
directed to contract or agree with the authority to pay to the authority
from the state freeway fund or state highway fund, upon order or voucher
of the secretary in the manner provided by law to the director of accounts
and reports, in each year, such amount or amounts as shall be required
in such year to make up any deficiency in the revenues received from the
operation and ownership of any highway project in such year, over and
above the cost of maintenance, repair and operation of such highway
project and the creation of reserves for such purposes in such year, (i)
for paying the interest on all highway revenue bonds or highway revenue
refunding bonds issued by the authority in connection with any such high-
way project, (ii) for retiring such bonds by their maturity or maturities,
and (iii) for paying the premium, if any, on a specified aggregate principal
amount of bonds which would be payable in such year if such principal
amount of bonds were to be redeemed prior to their maturity or matur-
ities. Any contract or agreement entered into pursuant to this section shall
provide that all payments to the authority pursuant to this section shall
be made from the state freeway fund, unless the moneys available in said
fund for making such payments are insufficient; and in such event, such
contract or agreement shall provide that any additional moneys needed
to make any such payment or payments shall be paid from the state high-
way fund. The amount which is required in each such year to provide for
paying the interest on such bonds and for retiring such bonds on or prior
to their maturity or maturities shall be determined as provided in such
contract or agreement. Any such payments required to be made pursuant
to such contract or agreement may be pledged or assigned by the au-
thority in the same manner as tolls and other revenues of such highway
project. Any such contract or agreement shall provide for reimbursement
by the authority, from tolls or other revenues of such highway project to
the secretary of transportation for the credit of the state highway fund or
state freeway fund, at any time or times and under such terms and con-
ditions as may be set forth therein, of any amounts previously paid to the
authority by the secretary of transportation pursuant to the provisions of
this paragraph: Provided, however,, except that if the revenues received
from the operation and ownership of such highway project in any year,
over and above the cost of maintenance, repair and operation of such
highway project incurred in such year, shall exceed one hundred fifty
percent (150%) 150% of clauses (i), (ii) and (iii) above for such year, such
excess must be reimbursed to the secretary, for the credit of the state
highway fund or state freeway fund, until all amounts previously paid to
the authority by the secretary have been reimbursed to the secretary. Any
moneys paid by the authority to the secretary pursuant to this section as
reimbursement for moneys previously paid from the state highway fund
or state freeway fund shall be deposited by the secretary in the state
treasury, and the state treasurer shall credit such moneys to the state
highway fund from which payments to the authority were made. Where
payments to the authority have been made from both the state highway
fund and state freeway fund, moneys paid as reimbursement therefor
shall be credited by the state treasurer to each such fund in the proportion
provided in the contract or agreement authorizing payments to the au-
thority.

      Any payments authorized by subsection (b) of K.S.A. 68-2301, and
provided to be made to the authority from the state freeway fund in any
year pursuant to the provisions of this section shall be a lien and claim
on that portion of said freeway fund which is not otherwise obligated for
the payment of the principal of and interest on the highway bonds issued
pursuant to K.S.A. 68-2304, and the pledge by the authority of any mon-
eys paid to the authority from the freeway fund pursuant to this section
shall be subordinate to the lien and claim on such fund under the pro-
visions of K.S.A. 68-2304: Provided, That the secretary of transportation
and the authority may determine any priority as to lien and claim on said
fund as between any such payments to the authority from said fund on
account of any highway projects financed under the provisions of this act.
The laws of Kansas shall not be repealed or amended so as to cause the
moneys available in the state freeway fund for making any payments to
the authority provided to be made pursuant to the provisions of this sec-
tion to be insufficient to make any such payments.

      Any payments provided to be made in any year pursuant to the pro-
visions of this section to the authority from the state highway fund shall
be a lien and claim on the portion of said the highway fund which is made
available to the secretary of transportation by the provisions of subsection
(b)(4) of K.S.A. 68-416 to be used by said secretary in the construction,
improvement, reconstruction and maintenance of the state highway sys-
tem and the support and maintenance of the department of transportation
and the expenses of administering the motor vehicle registration and driv-
ers license laws;, and amendments thereto, but any such payments pro-
vided to be made shall not be a lien or claim on any of the sums now
provided by subsections (b)(1), (2) and (3) of K.S.A. 68-416, and amend-
ments thereto, and such payments shall be subject to any prior lien
thereon, if any, created by similar contract heretofore made and entered
into by and between the secretary and the Kansas turnpike authority:
Provided, however,, except that the secretary and the authority may de-
termine any priority as to lien and claim on said the fund as between any
such payments to the authority from said the fund on account of any
highway projects financed under the provisions of this act. The laws of
Kansas shall not be repealed or amended so as to cause the moneys avail-
able in the state highway fund for making any payments to the authority
provided to be made pursuant to the provisions of this section to be
insufficient to make any such payments.

      The provisions of any contract or agreement entered into pursuant to
the provisions of this section may be enforced by the authority or by the
trustee under any trust agreement authorized by the provisions of K.S.A.
68-20,101 and amendments thereto.

      Sec.  14. K.S.A. 68-2315 is hereby amended to read as follows: 68-
2315. Annually, prior to the 10th day of each regular session of the leg-
islature, the secretary of transportation shall submit a written report to
the governor and each member of the legislature providing:

      (a) Summary financial information and a statement of assurance that
the department of transportation has prepared a comprehensive financial
report of all funds for the preceding year which shall include includes a
report by independent public accountants attesting that the financial
statements present fairly the financial position of the Kansas department
of transportation in conformity with generally accepted accounting prin-
ciples and a notification that the complete comprehensive financial report,
including the auditor's report is available upon request;

      (b) a detailed explanation of the methods or criteria employed to
select construction projects, including a definition of the program ele-
ments in subsections (a) and (b) of K.S.A. 68-2314 in the selection of
substantial maintenance and construction projects and in the awarding
of assistance to cities, counties or other transportation providers;

      (c) the proposed allocation and expenditure of moneys and proposed
work plan for the current fiscal year and at least the next five years;

      (d) information concerning system enhancements, construction work
completed in the preceding fiscal year and construction work in progress;

      (e) information concerning the operation and financial condition of
the transportation revolving fund;

      (e) (f) specific recommendations for any statutory changes necessary
for the successful completion of the comprehensive transportation pro-
gram specified in section 1 or efficient and effective operation of the
Kansas department of transportation; and

      (f) (g) an explanation of any material changes from the previous an-
nual report.

      Sec.  15. K.S.A. 68-2316 is hereby amended to read as follows: 68-
2316. For the period beginning July 1, 1989 1999, through June 30, 1997
2009, the secretary of transportation shall expend or commit to expend,
from the revenue provided under the provisions of this act, at least
$2,500,000 $3,000,000 for highway, bridge and substantial maintenance
projects in each county of the state.

      Sec.  16. K.S.A. 68-2320 is hereby amended to read as follows: 68-
2320. (a) On and after July 1, 1991, the secretary of transportation is
hereby authorized and empowered to issue bonds of the state of Kansas,
payable solely from revenues accruing to the state highway fund and
transferred to the highway bond debt service fund and pledged to their
payment, for the purpose of providing funds to pay costs relating to con-
struction, reconstruction, maintenance or improvement of highways in
this state and to pay all expenses incidental thereto and to the bonds. The
secretary is hereby authorized to issue bonds the total principal amount
of which shall not exceed $890,000,000.

      (b) In addition to the provisions of subsection (a), on and after July
1, 1999, the secretary of transportation is hereby authorized and empow-
ered to issue bonds of the state of Kansas, payable solely from revenues
accruing to the state highway fund and transferred to the highway bond
debt service fund and pledged to their payment, for the purpose of pro-
viding funds to pay costs relating to construction, reconstruction, main-
tenance or improvement of highways in this state and to pay all expenses
incidental thereto and to the bonds. The secretary is hereby authorized
to issue bonds the total principal amount of which shall not exceed
$995,000,000.

      (c) In accordance with procurement statutes, the secretary may con-
tract with financial advisors, attorneys and such other professional services
as the secretary deems necessary to carry out the provisions of this act,
and to do all things necessary or convenient to carry out the powers
expressly granted in this act.

      Sec.  17. K.S.A. 1998 Supp. 68-2321 is hereby amended to read as
follows: 68-2321. (a) Bonds issued shall be authorized by resolution of
the secretary. The secretary shall determine the form and manner of the
execution of the bonds and the bonds may be made exchangeable for
bonds of another denomination or in another form. The bonds shall be
dated and. Bonds issued under subsections (a) and (b) of K.S.A. 68-2320,
and amendments thereto shall mature not more than 20 years from their
date. The bonds may be in such form and denominations, may bear in-
terest payable at such times and at such rate or rates, may be payable at
such places within or without the state, may be subject to such terms of
redemption in advance of maturity at such prices, and may contain such
terms and conditions, all as the secretary shall determine. The bonds shall
have all the qualities of and shall be deemed to be negotiable instruments
under the laws of the state of Kansas. The authorizing resolution may
contain any other terms, covenants and conditions that the secretary
deems reasonable and desirable.

      (b) The proceeds from the sale of the bonds authorized to be issued
under this section are deemed to be trust funds which shall be deposited
in the custody of the state treasurer in the highway bond proceeds fund
which is hereby created. The secretary shall have responsibility for the
management and control of the highway bond proceeds fund and shall
provide, by resolution, for both amounts and the duration of investments
of moneys in such fund. Such resolution may recommend investment and
reporting policies, including acceptable levels of return, risk and security.
After consultation with the secretary and subject to the terms, covenants
and conditions provided in the resolutions providing for the issuance of
such bonds, the director of investments shall have the authority to invest
and reinvest moneys in such fund and to acquire, retain, manage, includ-
ing the exercise of any voting rights, and dispose of investments of such
fund. In investing or reinvesting moneys in such fund, there shall be
exercised the judgment and care under the circumstances then prevailing
which persons of prudence, discretion and intelligence exercise in the
management of their own affairs, not in regard to speculation but in re-
gard to the permanent disposition of their funds, considering the probable
income as well as the probable safety of their capital, except that moneys
of the fund may not be invested in common stocks. Notwithstanding an-
ything to the contrary, all interest or other income of the investments,
after payment of any management fees, of the highway bond proceeds
fund shall be credited to the highway bond debt service fund, until pay-
ments on bonds authorized by this act and interest thereon has been fully
funded. Thereafter, earnings and other income shall be credited to the
state highway fund.

      (c) The authorizing resolution may provide for the execution of a trust
indenture. The trust indenture may contain any terms, covenants and
conditions that are deemed desirable by the secretary, including, without
limitation, those pertaining to the maintenance of various funds and re-
serves, the nature and extent of any security for payment of the bonds,
the custody and application of the proceeds of the bonds, the collection
and disposition of bond proceeds and earnings thereon, the investing for
authorized purposes, and the rights, duties and obligations of the secre-
tary and the holders and registered owners of the bonds.

      (d) Any authorizing resolution and trust indenture relating to the is-
suance and security of the bonds may set forth covenants, agreements
and obligations therein, which may be enforced by mandamus or other
appropriate proceeding at law or in equity.

      (e) The bonds may be issued under the provisions of this act without
obtaining the consent of any department, division, commission, board,
bureau or agency of the state and without any other proceedings or the
happening of any other conditions or things than those proceedings, con-
ditions or things which are specifically required by this act.

      Sec.  18. K.S.A. 75-5032 is hereby amended to read as follows: 75-
5032. This act shall be known and may be cited as the Kansas elderly and
disabled coordinated public transportation assistance act.

      Sec.  19. K.S.A. 75-5033 is hereby amended to read as follows: 75-
5033. It is declared to be the purpose of this act to provide financial and
administrative assistance to transportation systems which provide coor-
dinated transportation services to the elderly and disabled elderly persons,
persons with disabilities and the general public.

      Sec.  20. K.S.A. 75-5034 is hereby amended to read as follows: 75-
5034. When used in this act:

      (a) ``Transportation system'' means all public and private transporta-
tion providers which provide public transportation services to the elderly
and disabled elderly persons, persons with disabilities and the general
public, and which receive federal support through section 9, section 16
or section 18 49 U.S.C. §  5307, 5310 or 5311 from the U.S. department
of transportation, urban mass transportation federal transit administra-
tion.

      (b) ``Transportation'' means the movement of individuals and meals
in a four or more wheeled motorized vehicle designed to carry passengers.
Transportation does not include emergency or school transportation.

      (c) ``Coordination'' means where programmatically feasible, all enti-
ties involved in administrating and/or providing transportation and related
services to the elderly, disabled, elderly persons, persons with disabilities
and the general public will work together in a smooth, concerted effort
to effectively use resources and alleviate duplication of services.

      (d) ``Elderly'' ``Elderly persons'' means those persons 60 years of age
or older.

      (e) ``Disabled'' ``Persons with disabilities'' means those persons de-
termined by the department of transportation to be disadvantaged in
terms of the transportation services available to them due to physical or
mental disability.

      (f) ``Public transportation services'' means those services accessible to
the general public elderly and disabled community elderly persons, per-
sons with disabilities and the general public.

      (g) ``Department'' means the Kansas department of transportation.

      (h) ``Secretary'' means the secretary of the department of transpor-
tation or designee.

      Sec.  21. K.S.A. 75-5035 is hereby amended to read as follows: 75-
5035. (a) There is hereby established in the state treasury the elderly and
disabled coordinated public transportation assistance fund. Any expend-
itures from the fund shall be for the coordinated development, improve-
ment or maintenance of transportation systems for elderly or disabled
persons persons, persons with disabilities or the general public under this
act and shall be made in accordance with appropriation acts upon war-
rants of the director of accounts and reports issued pursuant to vouchers
approved by the secretary or by a person designated by the secretary.

      (b) On July 1, 1994 1999, and each July 1 thereafter, the director of
accounts and reports shall transfer $1,000,000 $6,000,000 from the state
highway fund to the elderly and disabled coordinated public transporta-
tion assistance fund.

      Sec.  22. K.S.A. 75-5037 is hereby amended to read as follows: 75-
5037. (a) The secretary shall administer and allocate funds appropriated
under this act for the purpose of providing financial and administrative
assistance to transportation systems.

      (b) The secretary shall determine the eligibility of each applicant.

      The following criteria shall be used in determining eligibility:

      (1) Whether the proposal serves the transportation needs of the eld-
erly and disabled citizens elderly persons, persons with disabilities and
the general public of the proposed service area;

      (2) whether resources for transportation services are utilized in an
effective and efficient manner;

      (3) whether duplicative and inefficient administrative costs and trans-
portation services are avoided.

      (c) No more than 1% of the funds provided under this act shall be
expended for administrative purposes.

      Sec.  23. K.S.A. 75-5046 is hereby amended to read as follows: 75-
5046. (a) Subject to the provisions of subsection (f), the secretary of trans-
portation is hereby authorized upon application by a qualified entity and
its lender to enter into an agreement to guarantee the repayment of loans
made for the purpose of facilitating the financing, acquisition or rehabil-
itation of railroads in the state of Kansas.

      (b) Such agreement may contain such terms and conditions as the
secretary of transportation may deem appropriate to carry out the pur-
poses of this section, except that the aggregate unpaid principal amount
of obligations guaranteed thereby shall not exceed $20,000,000 of which
not more than $5,000,000 may be available each fiscal year. Any loan
guaranteed by the secretary of transportation pursuant to this section, at
a minimum, shall meet the following requirements:

      (1) The ratio of benefits to costs for any project funded by such guar-
anteed loan shall be greater than one. The benefit/cost methodology to
be used for this determination shall be the most recent standard benefit/
cost methodology approved by the federal railroad administration of the
United States department of transportation;

      (2) the qualified entity shall demonstrate that it is financially sound
and capable of fulfilling all obligations created by the proposed loan guar-
antee agreement; and

      (3) the qualified entity shall demonstrate that adequate funding for
the proposed project is not otherwise available, on terms that would make
the proposed project financially feasible, in the absence of a state loan
guarantee.

      (c) Prior to any loan being guaranteed under the provisions of this
section, the secretary of transportation shall make a determination as to
whether the guaranteeing of such loan would adversely affect the rating
of any bonds issued pursuant to K.S.A. 68-2314 et seq., and amendments
thereto and outstanding or authorized to be issued. If the guaranteeing
of such loan would adversely affect the rating of such bonds, the secretary
of transportation shall not guarantee such loan. Such determination shall
be documented in writing by the secretary of transportation.

      (d) The secretary of transportation may adopt rules and regulations
consistent with and for the purpose of implementing the provisions of
this section, including the priorities contained in subsection (a) of K.S.A.
75-4045, and amendments thereto.

      (e) ``Qualified entity'' means any interstate commerce commission
certificated railroad, a port authority established in accordance with Kan-
sas laws, or any entity meeting the rules and regulations established by
this section.

      (f) The secretary of transportation shall not enter into any agreement
to guarantee a loan under the provisions of this section unless such action
has been authorized by act of the legislature or has been approved by the
state finance council acting on this matter which is hereby characterized
as a matter of legislative delegation and subject to the guidelines pre-
scribed by subsection (c) of K.S.A. 75-3711c and amendments thereto,
except that such approval may also be given when the legislature is in
session.

      Sec.  24. K.S.A. 75-5048 is hereby amended to read as follows: 75-
5048. (a) The secretary of transportation is hereby authorized to make
loans or grants to a qualified entity for the purpose of facilitating the
financing, acquisition or rehabilitation of railroads in the state of Kansas.

      (b) Such loans or grants shall be made upon such terms and condi-
tions as the secretary of transportation may deem appropriate, and such
loans or grants shall be made from funds credited to the rail service
improvement fund.

      (c) The rail service improvement fund is hereby established in the
state treasury which shall be for the purpose of facilitating the financing,
acquisition and rehabilitation of railroads pursuant to subsection (a) of
this section and for the refinancing thereof. The secretary of transporta-
tion shall administer the rail service improvement fund. All expenditures
from the rail service improvement fund shall be made in accordance with
appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the secretary of transportation
or by a person or persons designated by the secretary.

      (d) All moneys received from the federal government under the local
rail freight assistance program (49 U.S.C. 1654) shall be remitted to the
state treasurer. Upon receipt of each such remittance, the state treasurer
shall deposit the entire amount in the state treasury to the credit of the
rail service improvement fund.

      (e) The management and investment of the rail service improvement
fund shall be in accordance with K.S.A. 68-2324, and amendments
thereto. Notwithstanding anything to the contrary, all interest or other
income of the investments, after payment of any management fees, shall
be considered income of the rail service improvement fund.

      (f)  (1) On July 1, 1999, and each July 1 thereafter, the director of
accounts and reports shall transfer $3,000,000 from the state highway
fund to the rail service improvement fund.

      (2) The provisions of this subsection shall expire on June 30, 2007.

      (e) (g) ``Qualified entity'' means any interstate commerce commission
certificated railroad, a port authority established in accordance with Kan-
sas laws, or any entity meeting the rules and regulations established by
K.S.A. 75-5050, and amendments thereto.

      Sec.  25. K.S.A. 75-5053 is hereby amended to read as follows: 75-
5053. When used in this act:

      (a) ``Transportation'' means the movement of individuals in a four or
more-wheeled motorized vehicle designed to carry passengers. Trans-
portation does not include emergency or school transportation.

      (b) ``Nonurbanized area'' designates any city or county with a popu-
lation of less than 50,000 population.

      (c) ``Rural transportation system'' means all public and private trans-
portation agencies which provide transportation services in nonurbanized
portions of the state and which receive federal support through 49
U.S.C.§  5310, 49 U.S.C. §  5311 from the United States department of
transportation, federal transit administration, or from the Kansas elderly
and disabled coordinated public transportation assistance act, or from
both.

      (d) ``Specialized transportation system'' means all public and private
transportation agencies which provide transportation services to elderly
or disabled passengers persons or persons with disabilities and which
receive federal support through 49 U.S.C. §  5310 from the United States
department of transportation, federal transit administration, or the Kansas
elderly and disabled coordinated public transportation assistance act, or
from both.

      (e) ``Coordinated transit district'' means a public or private not-for-
profit agency with an established purpose to distribute funds and monitor
implementation of passenger transportation services in a designated area
of the state.

      (f) ``Administrator'' means the agency selected to receive funds from
the department for provision of transportation services in the designated
area.

      (g) ``Elderly'' ``Elderly person'' means those persons 60 years of age
or older.

      (h) ``Disabled'' ``Persons with disabilities'' means those persons de-
termined by the department of transportation to be disadvantaged in
terms of the transportation services available to them due to physical or
mental disability.

      (i) ``Coordination'' means where programmatically feasible, all enti-
ties involved in administrating or providing transportation and related
services to the elderly, disabled elderly persons, persons with disabilities
and the general public will work together in a smooth, concerted effort
to effectively use resources and alleviate duplication of services.

      (j) ``Department'' means the Kansas department of transportation.

      (k) ``Secretary'' means the secretary of the department of transpor-
tation.

      Sec.  26. K.S.A. 75-5056 is hereby amended to read as follows: 75-
5056. (a) The secretary shall establish coordinated transit districts for the
purpose of providing financial and administrative assistance to transpor-
tation systems.

      (b) The secretary shall determine the eligibility of each agency to
serve as coordinated transit district administrator. The following criteria
shall be used in determining eligibility:

      (1) Whether the proposal serves the transportation needs of the eld-
erly, disabled elderly persons, persons with disabilities and the general
public citizens of the proposed district;

      (2) whether resources for transportation services are utilized in an
effective and efficient manner; and

      (3) whether the proposal is consistent with the statewide coordinated
transit district plan.

      (c) The secretary shall administer and allocate funds to qualified co-
ordinated transit district administrators, consistent with the statewide co-
ordinated transit district plan.

      Sec.  27. K.S.A. 75-5061 is hereby amended to read as follows: 75-
5061. (a) The secretary of transportation is hereby authorized and em-
powered to: (1) Solicit and receive moneys from any public or private
sources; and (2) establish and administer a grant program for public use
general aviation airports for the purpose of planning, constructing, re-
constructing or rehabilitating the facilities of such public use general avi-
ation airports.

      (b) Such grants shall be made upon such terms and conditions as the
secretary of transportation deems appropriate, and such grants shall be
made from funds credited to the public use general aviation airport de-
velopment fund.

      (c) The public use general aviation airport development fund is
hereby established in the state treasury which shall be for the purpose of
planning, constructing, reconstructing or rehabilitating the facilities of
public use general aviation airports pursuant to subsection (a) of this sec-
tion. All moneys received pursuant to subsection (a) shall be remitted to
the state treasurer at least monthly and deposited in the state treasury to
the credit of the public use general aviation airport development fund.
The secretary of transportation shall administer the public use general
aviation airport development fund. All expenditures from the public use
general aviation airport development fund shall be made in accordance
with appropriation acts upon warrants of the director of accounts and
reports issued pursuant to vouchers approved by the secretary of trans-
portation or by a person or persons designated by the secretary.

      (d) On July 1, 1999, and each July 1 thereafter, the director of ac-
counts and reports shall transfer $3,000,000 from the state highway fund
to the public use general aviation airport development fund.

      (d) (e) As used in this section ``public use general aviation airport''
means any airport available for use by the general public for the landing
and taking off of aircraft, but shall not include any airport classified as a
primary airport by the federal aviation administration.

      (e) (f) The secretary of transportation may adopt rules and regulations
for the purpose of implementing the provisions of this section.

      Sec.  28. K.S.A. 1998 Supp. 79-3408c is hereby amended to read as
follows: 79-3408c. (a) A tax is hereby imposed on the use, sale or delivery
of all motor-vehicle fuel or special fuel owned at 12:01 a.m. July 1, 1989
1999, and on July 1 of each year thereafter, by any licensed distributor
or licensed retailer at a rate per gallon, or fraction thereof, equal to the
amount, if any, by which the tax per gallon, or fraction thereof, in effect
on such date as prescribed by K.S.A. 79-3408, and amendments thereto,
exceeds the rate of tax upon such motor-vehicle fuel or special fuel which
was in effect on the preceding day. Such tax shall be paid by the licensed
distributor or licensed retailer owning such motor-vehicle fuel or special
fuel at such time and date. On or before the 25th day of the month in
which a tax is imposed under this section, every such distributor and retail
dealer shall make a report to the director on a form prescribed and fur-
nished by the director showing the total number of gallons, or fraction
thereof, of such motor-vehicle fuel or special fuel owned at the time the
tax is imposed under this section and such report shall be accompanied
by a remittance of the tax due.

      Any licensed distributor or licensed retailer who shall fail to make such
report or pay such tax, within the time prescribed, shall be subject to the
same penalties and interest charges prescribed by the motor-vehicle fuel
or special fuel tax law for failure of a licensed distributor to make monthly
reports and payments of motor-vehicle fuel or special fuel tax. The pro-
visions of the motor-fuel tax law relating to remedies for the collection of
delinquent motor-fuel taxes from distributors shall apply to the collection
of taxes imposed by this section which have become delinquent from
licensed distributors and licensed retailers. All taxes, penalties and inter-
est collected by the director under the tax imposed by this section shall
be paid by the director into the state treasury and the state treasurer shall
credit the same to the funds and in the amounts specified in K.S.A. 79-
34,142, and amendments thereto.

      (b) Whenever the rate of tax upon motor-vehicle fuels or special fuels
fixed pursuant to K.S.A. 79-3408, and amendments thereto, which be-
come effective on July 1, 1989 1999, or on July 1 in any year thereafter
is less than the rate of tax upon such fuel in effect on the preceding day,
the licensed distributor or licensed retailer owning such fuel at 12:01 a.m.
on the date such reduction in taxes becomes effective shall be entitled to
a refund of taxes paid upon such fuel in an amount equal to the amount
by which taxes were reduced from the amount of motor-vehicle fuels or
special fuels taxes per gallon, or fraction thereof, actually paid upon each
gallon, or fraction thereof, of motor-vehicle fuels or special fuels multi-
plied by the number of gallons of motor-vehicle fuels or special fuels
owned by the distributor or dealer on such date. On or before the 25th
day of the month in which such tax is reduced, every such distributor and
retailer shall make a report to the director on a form prescribed and
furnished by the director showing the total number of gallons of such
motor-vehicle fuel or special fuel owned by such distributor or retailer at
12:01 a.m. on the date upon which such tax was reduced. It shall be the
duty of the director of taxation to examine all such claims and determine
the amount to which each claimant is entitled. In the event any distributor
or retailer entitled to such refund shall owe the state any motor-vehicle
fuel or special fuel tax, penalties, or interest, the refund authorized by
this section shall upon being determined by the director be credited upon
the amount of such taxes, penalties and interest. Whenever the director
shall determine that any distributor or retailer shall be entitled to a refund
under any of the provisions of this section, and such refund cannot be
effected by giving credit therefor, as hereinbefore provided, or against
the future motor-vehicle fuel or special fuel tax liability of such taxpayer
the director shall certify the amount of the refund to the state director
of accounts and reports, who shall draw a warrant for the amount so
certified on the state treasurer in favor of the distributor or retailer en-
titled to such refund, and mail, or otherwise deliver, the same to the
distributor entitled thereto. Such warrant shall be paid by the state trea-
surer to such distributor or retailer from the motor-vehicle fuel or special
fuel tax refund fund.

      (c) The provisions of this section shall not apply to any licensed re-
tailer who is a native American whose licensed place of business or busi-
nesses are located on such retailer's reservation, nor to any native Amer-
ican tribes having licensed places of business or businesses located on
such tribe's reservation.

      Sec.  29. K.S.A. 79-3425 is hereby amended to read as follows: 79-
3425. (a) All of the amounts collected under the motor-fuel tax law and
amendments thereto, except amounts collected pursuant to K.S.A. 79-
3408c, and amendments thereto, shall be remitted by the director to the
state treasurer daily, and the state treasurer shall deposit all such amounts
in the state treasury. The state treasurer shall credit such amount thereof
as the director shall order in the motor-vehicle fuel tax refund fund to be
used for the purpose of paying motor-vehicle fuel tax refunds as provided
by law. The state treasurer shall credit the remainder of such amounts as
follows: To the state freeway fund which highway fund is hereby created,
amounts specified in K.S.A. 79-34,142, and amendments thereto, to be
expended in the manner provided in K.S.A. 68-2301, and amendments
thereto, to a special city and county highway fund which is hereby created,
amounts specified in K.S.A. 79-34,142, and amendments thereto, to be
apportioned and distributed in the manner provided in K.S.A. 79-3425c,
and amendments thereto, and to the Kansas qualified agricultural ethyl
alcohol producer incentive fund, which is hereby created in the state
treasury, in the amount and in the manner specified in K.S.A. 79-34,161,
and amendments thereto, to be expended in the manner provided in
K.S.A. 79-34,162, and amendments thereto.

      (b) On each day, after the state treasurer has received certification
from the secretary of transportation that provisions have been made for
the payment of the pro rata share of the amount required to be paid on
the next ensuing payment date of either the principal of or the interest
on the outstanding highway bonds issued pursuant to K.S.A. 68-2304 and
amendments thereto, the state treasurer shall transfer from the state free-
way fund to the state highway fund an amount specified in K.S.A. 79-
34,143, and amendments thereto.

      Sec.  30. K.S.A. 79-3425c is hereby amended to read as follows: 79-
3425c. (a) On January 15, April 15, July 15 and October 15 of each year,
the director of accounts and reports shall transfer $625,000 to the county
equalization and adjustment fund from the special city and county high-
way fund and on such dates the state treasurer shall apportion and pay
to the several counties of the state 57% of the moneys in the special city
and county highway fund, created by K.S.A. 79-3425, and amendments
thereto, and shall apportion and pay to the several cities of the state the
remaining 43% of such moneys.

      (b)  (1) Except as provided in paragraph (2) of this subsection, The
allocation and payment to each county under the provisions of this section
shall be made in the following manner:

      First, Each county of the state shall receive a payment of $5,000;

      Second, Of the balance remaining, 50% 44.06% thereof shall be ap-
portioned and paid to each county on January 15 and April 15 of each
year in the proportion that the total amount of money collected in such
county from motor vehicle registration fees for the second preceding
calendar year bears to the total amount of money collected in all counties
from motor vehicle registration fees for the second preceding calendar
year, and on July 15 and October 15 of each year in the proportion that
the total amount of money collected in such county from motor vehicle
registration fees for the preceding calendar year bears to the total amount
of money collected in all counties from motor vehicle registration fees
for the preceding calendar year;

      Third, The remaining 50% 44.06% of such balance shall be apportioned
and paid to each county on January 15 and April 15 of each year in the
proportion that the average daily vehicle miles traveled in such county
for the second preceding calendar year bears to the average daily vehicle
miles traveled in all counties of the state for the second preceding cal-
endar year, and on July 15 and October 15 of each year in the proportion
that the average daily vehicle miles traveled in such county for the pre-
ceding calendar year bears to the average daily vehicle miles traveled in
all counties of the state for the preceding calendar year; and

      (2) the allocation and payment to each county of the new revenue
provided under the provisions of this act to the special city and county
highway fund shall be made in the following manner:

      First, 331/3% of such revenue shall be apportioned and paid in accord-
ance with the provisions of Second of subsection (b)(1);

      Second, 331/3% of such revenue shall be apportioned and paid in ac-
cordance with the provisions of Third of subsection (b)(1);

      Third Fourth, the remaining 331/3% 11.88% of such balance shall be
apportioned and paid to each county on January 15 and April 15 of each
year in the proportion that the total road miles in such county for the
second preceding calendar year bears to the total road miles in all counties
of the state for the second preceding calendar year; and on July 15 and
October 15 of each year in the proportion that the total road miles in
such county for the preceding calendar year bears to the total road miles
in all counties of the state for the preceding calendar year.

      If the total amount of money received by any county pursuant to the
foregoing distribution formula and by all cities located within such county
pursuant to subsection (c) of this section during the period from July 15
of any year to April 15 of the next succeeding year is less than the total
amount received by such county and all cities located within such county
from the county road and city street fund, the special city and county
highway fund, the county and township road fund and the special motor
carrier fee county road fund during the period from July 1, 1969, to June
30, 1970, plus the total amount such county and all cities located within
such county would have received on July 15, 1970, from the special city
and county highway fund based on the formula for distributing such fund
in effect on June 30, 1970, then on April 15 of each year from the special
city and county highway fund and the county equalization and adjustment
fund for fiscal year 1999, the state treasurer shall apportion and pay to
each such county from the county equalization and adjustment fund an
amount which together with the amount received pursuant to the fore-
going distribution formula will equal the total amount received from the
four two aforementioned funds during such period of time plus the total
amount such county and all cities located within such county would have
received on July 15, 1970, from the special city and county highway fund
based on the formula for distributing such fund in effect on June 30,
1970. In the event that there is insufficient funds in the county equali-
zation and adjustment fund to pay each county the amount to which it is
entitled, each county shall receive a payment in the proportion that the
amount to which such county is entitled bears to the amount to which all
such counties are entitled. If there is money remaining in such fund after
such distribution, the state treasurer shall distribute the balance to the
several counties in the manner provided in the second and third clauses
of the foregoing formula for distributing moneys to counties from the
special city and county highway fund.

      All payments shall be made to the county treasurers of the respective
counties, and upon receipt of the same:

      (1) The county treasurers of Sedgwick and Shawnee counties shall
credit 50% of the moneys received to the road and bridge fund of such
counties and apportion and pay the remainder of such moneys to the
several cities located in such counties;

      (2) the county treasurer of Wyandotte county shall credit 10% of the
moneys received to the road and bridge fund of such county and appor-
tion and pay the remainder of such moneys to the several cities located
in such county;

      (3) the county treasurers of Lyon, Cowley, Crawford, Montgomery,
Butler, Saline, Leavenworth, Riley, Reno and Douglas counties shall
credit 90% of the moneys so received to the road and bridge fund of such
counties and apportion and pay the remainder of such moneys to the
several cities located in such counties except that no persons residing
within the Fort Riley military reservation shall be included or considered
in determining the population of any city located within Geary or Riley
county; and

      (4) the county treasurers of Johnson county and all other counties not
listed in paragraphs (1), (2) or (3) shall credit all of the moneys received
to the road and bridge fund of such counties.

      Not less than 25% of the amount received by each county and credited
to the county road and bridge fund under the provisions of this section
shall be expended by the county on mail and school bus routes on county
roads as defined in K.S.A. 68-101, and amendments thereto. Payments
to the cities under the provisions of this subsection shall be in the pro-
portion that the population of each city bears to the total population of
all cities located in the same county as such city.

      In counties which have not adopted the county-unit road system, the
amount of money retained by such counties after distribution to the cities
within such county pursuant to this subsection shall be distributed to each
township within such county in not less than the proportion that the
amount of money received by each township from the county and town-
ship road fund during the period from July 1, 1969, to June 30, 1970,
bears to the total amount of money received by such county from the
county and township road fund, the county road and city street funds,
the special motor carrier fee county road fund and the special city and
county highway fund during the period from July 1, 1969, to June 30,
1970, plus the amount such county would have received on July 15, 1970,
from the special city and county highway fund based on the formula for
distributing such fund in effect on June 30, 1970. All payments to town-
ships hereunder shall be made to the treasurers thereof, and all moneys
so received shall be deposited in the general road fund of such township.

      (c) The allocation and payment of moneys to the several cities of the
state from the special city and county highway fund shall be in the pro-
portion that the population of each city bears to the total population of
all cities in the state except that the population of any military reservation
which has been annexed to a city after the date of December 31, 1981,
shall not be included in the population of such city for the purpose of this
allocation. All such payments shall be to the city treasurers of the re-
spective cities. Upon receipt of same unless a consolidated street and
highway fund is established pursuant to K.S.A. 12-1,119, and amend-
ments thereto, the city treasurer of each city shall credit the same to a
separate fund to be used for the construction, reconstruction, alteration,
repair and maintenance of the streets and highways of such city and for
the payment of bonds, and interest thereon, issued pursuant to K.S.A.
79-3425g, and amendments thereto. In order to reduce vehicular traffic
and congestion on its streets and highways, any city located within John-
son county may use not to exceed 10% of the moneys credited to such
fund for the purpose of constructing, repairing and maintaining footpaths
and bicycle trails within such city.

      (d) For the purposes of this section, the average daily vehicle miles
traveled in each county shall be determined by the secretary of transpor-
tation, but it shall not include miles traveled on interstate highways, and
the population of each city shall be reported in the annual enumeration
by the state board of agriculture for the preceding calendar year.

      (e) In order to reduce vehicular traffic and congestion on its streets
and highways, the board of county commissioners of any county, the
governing body of any city or the township board of any township may
use for the purpose of constructing, repairing and maintaining footpaths
and bicycle paths not to exceed 10% of the moneys such government
receives under K.S.A. 79-3425c, and amendments thereto, except that such
limitation shall not apply to moneys received by a county that the county
is required to distribute to a city or a township. Such moneys shall not
be expended on any recreational trail, as defined in subsection (b) of
K.S.A. 1998 Supp. 58-3211, and amendments thereto.

      Sec.  31. K.S.A. 79-3491a is hereby amended to read as follows: 79-
3491a. (a) A tax is hereby imposed on all LP-gas motor fuels owned at
12:01 a.m. July 1, 1989 1999, and on July 1 of each year thereafter, by
any LP-gas motor fuels user or LP-gas motor fuels dealer at a rate per
gallon, or fraction thereof, equal to the amount, if any, by which the tax
per gallon, or fraction thereof, in effect on such date as prescribed by
K.S.A. 79-3492, and amendments thereto, exceeds the rate of tax per
gallon actually paid upon such fuel. Such tax shall be paid by the LP-gas
motor fuel user or LP-gas motor fuel dealer owning such LP-gas motor
fuels at such time and date. On or before the 25th day of the month in
which such tax is imposed under this section, every such LP-gas motor
fuel user and LP-gas motor fuel dealer shall make a report to the director
on a form prescribed and furnished by the director showing the total
number of gallons, or fraction thereof, of such LP-gas motor fuels owned
by the user or dealer at the time the tax is imposed under this section,
and such report shall be accompanied by a remittance of the tax due.

      Any LP-gas motor fuels user or LP-gas motor fuels dealer who shall
fail to make such report or pay such tax, within the time prescribed, shall
be subject to the same penalties and interest charges prescribed by the
liquefied petroleum motor fuel tax law for failure of a licensed distributor
to make monthly reports and payments of LP-gas motor fuel tax. The
provisions of the liquefied petroleum motor fuel tax law relating to rem-
edies for the collection of delinquent LP-motor fuel taxes from distrib-
utors shall apply to the collection of taxes imposed by this section which
have become delinquent from LP-gas motor fuels users and LP-gas motor
fuels dealers. All taxes, penalties and interest collected by the director
under the tax imposed by this section shall be paid by the director into
the state treasury and the state treasurer shall credit the same to the funds
and in the amounts specified in K.S.A. 79-34,142, and amendments
thereto.

      The words and phrases used in this section shall have the meanings
ascribed to them in K.S.A. 79-3490, and amendments thereto.

      (b) Whenever the rate of tax upon LP-gas motor fuels fixed pursuant
to K.S.A. 79-3492, and amendments thereto, which becomes effective on
July 1, 1989 1999, or on July 1 in any year thereafter, is less than the rate
of tax upon such fuels in effect on the preceding day, the user or dealer
owning such fuels at 12:01 a.m. on the date such reduction in taxes be-
comes effective shall be entitled to a refund of taxes paid upon such fuels
in an amount equal to the amount by which taxes were reduced from the
amount of tax per gallon, or fraction thereof, actually paid upon each
gallon, or fraction thereof, of LP-gas motor fuels multiplied by the num-
ber of gallons of fuel owned by the user or dealer on such date. On or
before the 25th day of the month in which such tax is reduced, every
such user or dealer shall make a report to the director on a form pre-
scribed and furnished by the director showing the total number of gallons
of such LP-gas motor fuels owned by such user or dealer at 12:01 a.m.
on the date upon which such tax was reduced. It shall be the duty of the
director of taxation to examine all such claims and determine the amount
to which any claimant is entitled. In the event any user or dealer entitled
to such refund shall owe the state any LP-gas motor fuels tax, penalties
or interest, the refund authorized by this section shall upon being deter-
mined by the director be credited upon the amount of such taxes, pen-
alties and interest. Whenever the director shall determine that any user
or dealer shall be entitled to a refund under any of the provisions of this
section, and such refund cannot be effected by giving credit therefor, as
hereinbefore provided, or against the future LP-gas motor fuel tax liability
of such taxpayer the director shall certify the amount of the refund to the
state director of accounts and reports, who shall draw a warrant for the
amount so certified on the state treasurer in favor of the user or dealer
entitled to such refund, and mail, or otherwise deliver, the same to the
user or dealer entitled thereto. Such warrant shall be paid by the state
treasurer to such user or dealer from the LP-gas motor fuels tax refund
fund which is hereby established in the state treasury.

      (c) A fund designated as the LP-gas motor fuels tax refund fund not
to exceed $1,000,000 shall be set apart and maintained by the director of
taxation from the LP-gas motor fuels tax collected under the provisions
of article 34 of chapter 79 of Kansas Statutes Annotated, and amendments
thereto, and held by the state treasurer for the payment of all refunds
authorized by this section.

      Sec.  32. K.S.A. 79-3492b is hereby amended to read as follows: 79-
3492b. Alternatively to the methods otherwise set forth in this act, special
LP-gas permit users operating motor vehicles on the public highways of
this state may upon application to the director on forms prescribed by
the director elect to pay taxes in advance on LP-gas for each and every
motor vehicle owned or operated by them and propelled in whole or in
part with LP-gas during the calendar year and thereafter to purchase LP-
gas tax free in lieu of securing a bonded user's permit and filing monthly
reports and tax payments and keeping the records otherwise provided for
in this act. The amount of such tax for each motor vehicle shall, except
as otherwise provided, be based upon the gross weight of the motor ve-
hicle and the number of miles it was operated on the public highways of
this state during the previous year pursuant to the following schedule
schedules:









In the event any additional motor vehicles equipped to use LP-gas as a
fuel are placed in operation by a special LP-gas permit user after the first
month of any calendar year, a tax shall become due and payable to this
state and is hereby imposed at the tax rate prescribed herein prorated on
the basis of the weight and mileage for the months operated in the cal-
endar year. The director shall issue special permit decals for each motor
vehicle on which taxes have been paid in advance as provided herein,
which shall be affixed on each such vehicle in the manner prescribed by
the director.

      Sec.  33. K.S.A. 79-34,104 is hereby amended to read as follows: 79-
34,104. (a) All amounts collected under the liquefied petroleum motor-
fuel tax law, except amounts collected pursuant to K.S.A. 79-3491a, and
amendments thereto, shall be remitted by the director to the state trea-
surer daily, and the state treasurer shall deposit the same in the state
treasury. The state treasurer shall credit such amounts as follows: To the
state freeway highway fund amounts specified in K.S.A. 79-34,142, and
amendments thereto, to be expended in the manner provided in K.S.A.
68-2301, and amendments thereto, and amounts specified in K.S.A. 79-
34,142, and amendments thereto, to a special city and county highway
fund to be apportioned and distributed in the manner provided in K.S.A.
79-3425c, and amendments thereto.

      (b) On each day after the state treasurer has received certification
from the secretary of transportation that provisions have been made for
the payment of the pro rata share of the amount required to be paid on
the next ensuing payment date of either principal and interest or interest
on the outstanding highway bonds issued pursuant to K.S.A. 68-2304, and
amendments thereto, the state treasurer shall transfer from the state free-
way fund to the state highway fund an amount specified in K.S.A. 79-
34,143, and amendments thereto.

      Sec.  34. K.S.A. 79-34,118 is hereby amended to read as follows: 79-
34,118. Upon application to the director of taxation and payment of the
fee prescribed under this section any interstate motor fuel user may ob-
tain a trip permit which will authorize one commercial motor vehicle to
be operated within this state without compliance with the other provisions
of the interstate motor fuel use act and in lieu of the tax imposed by
K.S.A. 79-34,109 and amendments thereto. The fee for each trip permit
issued under this section shall be $11 until July 1, 2001, and $11.50 until
July 1, 2003, and $12 until July 1, 2020, and $10 thereafter. The secretary
of revenue shall adopt rules and regulations specifying the conditions
under which trip permits will be issued and providing for the issuance
thereof. The secretary may designate agents or contract with private in-
dividuals, firms or corporations to issue such trip permits so that such
permits will be obtainable at convenient locations.

      Sec.  35. K.S.A. 79-34,126 is hereby amended to read as follows: 79-
34,126. (a) All amounts collected under the interstate motor fuel use act
shall be remitted by the director to the state treasurer daily, and the state
treasurer shall deposit the same in the state treasury. The state treasurer
shall credit such amounts as follows: To the state freeway highway fund
amounts specified in K.S.A. 79-34,142, and amendments thereto, to be
expended in the manner provided in K.S.A. 68-2301, and amendments
thereto, and amounts specified in K.S.A. 79-34,142, and amendments
thereto, to a special city and county highway fund to be apportioned and
distributed in the manner provided in K.S.A. 79-3425c, and amendments
thereto.

      (b) On each day after the state treasurer has received certification
from the secretary of transportation that provisions have been made for
the payment of the pro rata share of the amount required to be paid on
the next ensuing payment date of either principal and interest or interest
on the outstanding highway bonds issued pursuant to K.S.A. 68-2304, and
amendments thereto, the state treasurer shall transfer from the state free-
way fund to the state highway fund an amount prescribed by K.S.A. 79-
34,143, and amendments thereto.

      (c) (b) All amounts collected under the international fuel tax agree-
ment shall be remitted by the director to the state treasurer daily. The
state treasurer shall deposit the entire amount in the state treasury and
credit such amount to the international fuel tax agreement clearing fund
which is hereby created. Payments due and owing to member jurisdic-
tions under the international fuel tax agreement and refunds for over-
payment of tax shall be made from such fund. The director shall reconcile
such clearing fund monthly with balances remitted monthly in accordance
with the provisions of subsection (a). The funds in the international fuel
tax agreement clearing fund shall be invested in the same manner as
provided in K.S.A. 68-2324, and amendments thereto, and all earnings
shall be deposited in the state treasury and credited to the state highway
fund.

      Sec.  36. K.S.A. 79-34,141 is hereby amended to read as follows: 79-
34,141. (a) On and after July 1, 1999, until July 1, 2001, the tax imposed
under this act shall be not less than:

      (1) On motor-vehicle fuels, $.20 per gallon, or fraction thereof;

      (2) on special fuels, $.22 per gallon, or fraction thereof; and

      (3) on LP-gas, $.19 per gallon, or fraction thereof.

      (b) On and after July 1, 2001, until July 1, 2003, the tax imposed
under this act shall be not less than:

      (1) On motor-vehicle fuels, $.21 per gallon, or fraction thereof;

      (2) on special fuels, $.23 per gallon, or fraction thereof; and

      (3) on LP-gas, $.20 per gallon, or fraction thereof.

      (c) On and after July 1, 2003, until July 1, 2020, the tax imposed
under this act shall be not less than:

      (1) On motor-vehicle fuels, $.22 per gallon, or fraction thereof;

      (2) on special fuels, $.24 per gallon, or fraction thereof; and

      (3) on LP-gas, $.21 per gallon, or fraction thereof.

      (d) On and after July 1, 1992 2020, the tax rates imposed under this
act shall be not less than:

      (a) (1) On motor-vehicle fuels, $.18 per gallon, or fraction thereof;

      (b) (2) on special fuels, $.20 per gallon, or fraction thereof; and

      (c) (3) on LP-gas, $.17 per gallon, or fraction thereof.

      Sec.  37. K.S.A. 79-34,142 is hereby amended to read as follows: 79-
34,142. On and after August 1, 1989, The (a) On and after July 1, 1999,
until July 1, 2001, the state treasurer shall credit amounts received pur-
suant to K.S.A. 79-3408, 79-3408c, 79-3491a, 79-3492 and 79-34,118 and
amendments thereto as follows: To the state freeway highway fund 59.5%
59.55% and to the special city and county highway fund 40.5% 40.45%.

      (b) On and after July 1, 2001, until July 1, 2003, the state treasurer
shall credit amounts received pursuant to K.S.A. 79-3408, 79-3408c, 79-
3491a, 79-3492 and 79-34,118 and amendments thereto as follows: To the
state highway fund 61.55% and to the special city and county highway
fund 38.45%.

      (c) On and after July 1, 2003, until July 1, 2020, the state treasurer
shall credit amounts received pursuant to K.S.A. 79-3408, 79-3408c, 79-
3491a, 79-3492 and 79-34,118 and amendments thereto as follows: To the
state highway fund 63.35% and to the special city and county highway
fund 36.65%.

      (d) On and after July 1, 2020, the state treasurer shall credit amounts
received pursuant to K.S.A. 79-3408, 79-3408c, 79-3491a, 79-3492 and
79-34,118 and amendments thereto as follows: To the state highway fund
55.3% and to the special city and county highway fund 44.7%.

      Sec.  38. K.S.A. 1998 Supp. 79-34,147 is hereby amended to read as
follows: 79-34,147. (a) (1) On each January 1, April 1, July 1 and October
1, July 1, 1999, and quarterly thereafter the secretary of revenue shall
certify to the director of accounts and reports the amount equal to 7.628%
of the total revenues received by the secretary from the taxes imposed
under the Kansas retailers' sales tax act and deposited in the state treasury
and credited to the state general fund during the preceding three calendar
months.

      (2) On July 1, 2001, and quarterly thereafter, the secretary of revenue
shall certify to the director of accounts and reports the amount equal to
9.5% of the total revenues received by the secretary from the taxes im-
posed under the Kansas retailers' sales tax act and deposited in the state
treasury and credited to the state general fund during the preceding three
calendar months.

      (3) On July 1, 2002, and quarterly thereafter, the secretary of revenue
shall certify to the director of accounts and reports the amount equal to
11% of the total revenues received by the secretary from the taxes imposed
under the Kansas retailers' sales tax act and deposited in the state treasury
and credited to the state general fund during the preceding three calendar
months.

      (4) On July 1, 2003, and quarterly thereafter, the secretary of revenue
shall certify to the director of accounts and reports the amount equal to
11.25% of the total revenues received by the secretary from the taxes
imposed under the Kansas retailers' sales tax act and deposited in the state
treasury and credited to the state general fund during the preceding three
calendar months.

      (5) On July 1, 2004, and quarterly thereafter, the secretary of revenue
shall certify to the director of accounts and reports the amount equal to
12% of the total revenues received by the secretary from the taxes imposed
under the Kansas retailers' sales tax act and deposited in the state treasury
and credited to the state general fund during the preceding three calendar
months.

      (6) On July 1, 2005, and quarterly thereafter, the secretary of revenue
shall certify to the director of accounts and reports the amount equal to
13.5% of the total revenues received by the secretary from the taxes
imposed under the Kansas retailers' sales tax act and deposited in the
state treasury and credited to the state general fund during the preceding
three calendar months.

      (7) On July 1, 2006, and quarterly thereafter, the secretary of revenue
shall certify to the director of accounts and reports the amount equal to
14% of the total revenues received by the secretary from the taxes im-
posed under the Kansas retailers' sales tax act and deposited in the state
treasury and credited to the state general fund during the preceding three
calendar months.

      (b) Upon receipt of each certification under subsection (a), the di-
rector of accounts and reports shall transfer from the state general fund
to the state highway fund an amount equal to the amount so certified, on
each January 1, April 1, July 1 and October 1, except that the amount of
the transfer on each such date during state fiscal year 1999 shall not
exceed the amount equal to 102.4% of the amount transferred on the
same date during state fiscal year 1998. All transfers made pursuant to
this section are subject to reduction under K.S.A. 75-6704, and amend-
ments thereto, on each July 1, October 1, January 1 and April 1, except
that the amount of the transfer on each such date during state fiscal year
2000 shall not exceed the amount equal to 101.7% of the amount of the
transfer on each such date during state fiscal year 1999 and the amount
of the transfer on each such date during state fiscal year 2001 shall not
exceed the amount equal to 101.7% of the amount transferred on the same
date during state fiscal year 2000. All transfers made pursuant to this
section are subject to reduction under K.S.A. 75-6704, and amendments
thereto.

      (c) All transfers made in accordance with the provisions of this section
shall be considered to be demand transfers from the state general fund.

      Sec.  39. K.S.A. 79-34,161 is hereby amended to read as follows: 79-
34,161. On October 1, 1987, and quarterly thereafter, the state treasurer
shall credit $625,000 from the amounts remaining after the state treasurer
credits an amount to the motor vehicle fuel tax refund fund as provided
in subsection (a) of K.S.A. 79-3425, and amendments thereto, in the Kan-
sas qualified agricultural ethyl alcohol producer incentive fund.

      Sec.  40. K.S.A. 79-34,162 is hereby amended to read as follows: 79-
34,162. (a) All moneys in the Kansas qualified agricultural ethyl alcohol
producer incentive fund shall be expended by the secretary of the de-
partment of revenue for the payment of producer incentives for the pro-
duction of agricultural ethyl alcohol under the provisions of this act.

      (b) All moneys remaining in the Kansas qualified agricultural ethyl
alcohol producer incentive fund upon the expiration of this act shall be
credited by the state treasurer in the manner provided by subsection (a)
of K.S.A. 79-3425, and amendments thereto.

      New Sec.  41. (a) On and after the effective date of this act, the sec-
retary of the department of transportation shall conduct and analyze noise
studies when the secretary participates in highway reconstruction projects
which add through traffic lanes.

      (b) State highway funds may be used for noise abatement measures
when it is determined by the secretary that the overall noise abatement
benefits outweigh the overall adverse social, economic and environmental
effects and the costs of the noise abatement measures.

      (c) The secretary of the department of transportation may adopt rules
and regulations necessary for the implementation of the provisions of this
section.

      Sec.  42. K.S.A. 12-1,119, 66-231a, 66-231b, 68-402e, 68-417, 68-
417a, 68-417b, 68-2033, 68-2073, 68-2096, 68-2315, 68-2316, 68-2318,
68-2320, 75-5032, 75-5033, 75-5034, 75-5035, 75-5037, 75-5046, 75-
5048, 75-5053, 75-5056, 75-5061, 79-3425, 79-3425c, 79-3425d, 79-
3491a, 79-3492b, 79-34,104, 79-34,118, 79-34,126, 79-34,141, 79-34,142,
79-34,143, 79-34,161 and 79-34,162 and K.S.A. 1998 Supp. 68-416, 68-
2314, 68-2321, 79-3408c, 79-34,147 and 79-34,147, as amended by sec-
tion 96 of 1999 Senate Bill No. 325 are hereby repealed.

      Sec.  43. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 10, 1999.
__________