CHAPTER 168 SENATE BILL No. 324 An  Act concerning the university of Kansas hospital authority; relating to members of the
board of directors; employee benefits; retirement annuities; authorizing certain capital
improvement projects; amending K.S.A. 44-575 and 75-5542 and K.S.A. 1998 Supp. 76-
3304, 76-3311, 76-3317, 76-3321 and 76-3322 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 44-575 is hereby amended to read as follows: 44-
575. (a) As used in K.S.A. 44-575 through 44-580, and amendments
thereto, ``state agency'' means the state, or any department or agency of
the state, but not including the Kansas turnpike authority, the university
of Kansas hospital authority, any political subdivision of the state or the
district court with regard to district court officers or employees whose
total salary is payable by counties.

      (b) For the purposes of providing for the payment of compensation
for claims arising on and after July 1, 1974, and all other amounts required
to be paid by any state agency as a self-insured employer under the work-
ers compensation act and any amendments or additions thereto, there is
hereby established the state workers compensation self-insurance fund in
the state treasury. The name of the state workmen's compensation self-
insurance fund is hereby changed to the state workers compensation self-
insurance fund. Whenever the state workmen's compensation self-insur-
ance fund is referred to or designated by any statute, contract or other
document, such reference or designation shall be deemed to apply to the
state workers compensation self-insurance fund.

      (c) The state workers compensation self-insurance fund shall be li-
able to pay: (1) All compensation for claims arising on and after July 1,
1974, and all other amounts required to be paid by any state agency as a
self-insured employer under the workers compensation act and any
amendments or additions thereto; (2) the amount that all state agencies
are liable to pay of the ``carrier's share of expense'' of the administration
of the office of the director of workers' compensation as provided in
K.S.A. 74-712 through 74-719, and amendments thereto, for each fiscal
year; (3) all compensation for claims remaining from the self-insurance
program which existed prior to July 1, 1974, for institutional employees
of the division of mental health and retardation services of the department
of social and rehabilitation services; (4) the cost of administering the state
workers compensation self-insurance fund including the defense of such
fund and any costs assessed to such fund in any proceeding to which it is
a party; and (5) the cost of establishing and operating the state workplace
health and safety program under subsection (f). For the purposes of
K.S.A. 44-575 through 44-580, and amendments thereto, all state agen-
cies are hereby deemed to be a single employer whose liabilities specified
in this section are hereby imposed solely upon the state workers com-
pensation self-insurance fund and such employer is hereby declared to
be a fully authorized and qualified self-insurer under K.S.A. 44-532, and
amendments thereto, but such employer shall not be required to make
any reports thereunder.

      (d) The secretary of administration shall administer the state workers
compensation self-insurance fund and all payments from such fund shall
be upon warrants of the director of accounts and reports issued pursuant
to vouchers approved by the secretary of administration or a person or
persons designated by the secretary. The director of accounts and reports
may issue warrants pursuant to vouchers approved by the secretary for
payments from the state workers compensation self-insurance fund not-
withstanding the fact that claims for such payments were not submitted
or processed for payment from money appropriated for the fiscal year in
which the state workers compensation self-insurance fund first became
liable to make such payments.

      (e) The secretary of administration shall remit all moneys received
by or for the secretary in the capacity as administrator of the state workers
compensation self-insurance fund, to the state treasurer. Upon receipt of
any such remittance the state treasurer shall deposit the entire amount
thereof in the state treasury to the credit of the state workers compen-
sation self-insurance fund.

      (f) There is hereby established the state workplace health and safety
program within the state workers compensation self-insurance program
of the department of administration. The secretary of administration shall
implement and administer the state workplace health and safety program
for state agencies. The state workplace health and safety program shall
include, but not be limited to:

      (1) Workplace health and safety hazard surveys in all state agencies,
including onsite interviews with employees;

      (2) Workplace health and safety hazard prevention services, includ-
ing inspection and consultation services;

      (3) Procedures for identifying and controlling workplace hazards;

      (4) Development and dissemination of health and safety informa-
tional materials, plans, rules and work procedures; and

      (5) Training for supervisors and employees in healthful and safe work
practices.

      Sec.  2.  K.S.A. 75-5542 is hereby amended to read as follows: 75-
5542. (a) As used in K.S.A. 75-5542 to 75-5545, inclusive, and amend-
ments thereto, ``state agency'' means the state, or any department or
agency of the state, but not including the Kansas turnpike authority, the
university of Kansas hospital authority the council on vocational educa-
tion or any political subdivision of the state.

      (b) For the purposes of providing for the payment of compensation
for accumulated sick and vacation leave on retirement from state service
arising on and after July 1, 1994, and for the payment of accumulated
hours of sick leave upon being laid off from state service as provided
under K.S.A. 75-4371 and amendments thereto arising on and after July
1, 1996, there is hereby established the state leave payment reserve fund
in the state treasury.

      (c) The state leave payment reserve fund shall be liable to pay com-
pensation for accumulated sick and vacation leave on retirement from
state service arising on and after July 1, 1994, and for the payment of
accumulated hours of sick leave upon being laid off from state service as
provided under K.S.A. 75-4371 and amendments thereto arising on and
after July 1, 1996. To this end and for the purposes of K.S.A. 75-5542 to
75-5545, inclusive, and K.S.A. 75-4371, and amendments thereto, all state
agencies are hereby deemed to be a single employer whose liabilities
specified in subsection (b) are hereby imposed upon the state leave pay-
ment reserve fund.

      (d) The secretary of administration shall administer the state leave
payment reserve fund and all payments from such fund shall be upon
warrants of the director of accounts and reports issued pursuant to the
system of payroll accounting formulated under K.S.A. 75-5501 et seq.,
and amendments thereto, or pursuant to K.S.A. 75-5540 and amendments
thereto. The director of accounts and reports may issue warrants pursuant
to vouchers approved by the secretary for payments from the state leave
payment reserve fund notwithstanding the fact that claims for such pay-
ments were not submitted or processed for payment from money appro-
priated for the fiscal year in which the state leave payment reserve fund
first became liable to make such payments.

      (e) The secretary of administration shall remit all moneys received
by or for the secretary in the capacity as administrator of the state leave
payment reserve fund, to the state treasurer. Upon receipt of any such
remittance the state treasurer shall deposit the entire amount thereof in
the state treasury to the credit of the state leave payment reserve fund.

      (f) In the computation of accumulated vacation leave, time served
as an elected official in an elected position for which vacation leave is not
credited shall not be credited to length of service for employees who are
appointed to the classified or unclassified service in the executive branch
of state government.

      Sec.  3. K.S.A. 1998 Supp. 76-3304 is hereby amended to read as
follows: 76-3304. (a) There is hereby established a body politic and cor-
porate, with corporate succession, to be known as the university of Kansas
hospital authority. The authority is hereby established as shall be an in-
dependent instrumentality of this state. Its exercise of the rights, powers
and privileges conferred by this act shall be deemed and held to be the
performance of an essential governmental function.

      (b) The authority shall be governed by a fourteen-member board of
directors. Eight of the members shall be representatives of the general
public who are recognized for outstanding knowledge and leadership in
the fields of finance, business, health-care management, health care pro-
viders, legal affairs, education or government. Of the eight members rep-
resenting the general public, there shall be at least one member from
each congressional district. Three members shall be ex officio voting
members consisting of the chancellor of the university of Kansas, the
executive vice chancellor of the university of Kansas medical center and,
the executive dean of the university of Kansas school of medicine. Three
members shall be nonvoting ex officio members consisting of, the chief
of staff of the university of Kansas hospital medical staff, the president of
the authority and the dean of the university of Kansas school of nursing.

      (c) The eight members representing the general public appointed to
the initial board shall be appointed by the governor subject to senate
confirmation as provided in K.S.A. 75-4315b, and amendments thereto.
Any member whose nomination is subject to confirmation during a reg-
ular session of the legislature shall be deemed terminated when the senate
rejects the nomination. No such termination shall affect the validity of
any action taken by such member prior to such termination. Of the eight
members appointed to the initial board, two shall be members of the
Kansas board of regents and two members shall be members of the Kan-
sas legislature. The two legislative appointees shall be appointed by the
governor from a panel of four nominees composed of (1) one member of
the legislature nominated by the speaker of the house of representatives,
(2) one member of the legislature nominated by the minority leader of
the house of representatives, (3) one member of the legislature nomi-
nated by the president of the senate, and (4) one member of the legis-
lature nominated by the minority leader of the senate.

      (d) Of the members appointed to the initial board by the governor,
two members shall be appointed for a term of one year which expires
March 15, 1999, three members shall be appointed for a term of two
years which expires March 15, 2000, and three members shall be ap-
pointed for a term of three years which expires March 15, 2001.

      (e) After the initial board of directors is appointed, members other
than ex officio shall be appointed for a term of three years each, except
in the event of a vacancy the appointment shall be for the remainder of
the unexpired portion of the term. Each member shall hold office for the
term of appointment and until the successor has been nominated and
approved confirmed. Any member is eligible for reappointment, but
members shall not be eligible to serve more than two consecutive three-
year terms.

      (f) Except for appointment of the initial board, when a vacancy oc-
curs or is announced regarding a member or members representing the
general public, a nominating committee of the board shall forward a slate
of candidates to the governor for consideration. Appointment to the board
shall be made by the governor subject to senate confirmation as provided
in K.S.A. 75-4315b, and amendments thereto. Except as provided by
K.S.A. 1998 Supp. 46-2601, and amendments thereto, no person ap-
pointed to the board shall exercise any power, duty or function as a mem-
ber of the board until confirmed by the senate.

      (g) The terms of members serving by virtue of their office shall expire
immediately upon termination of their holding such office.

      (h) The board shall annually shall elect one of their number as chair-
person and another as vice-chairperson. The board shall also shall elect
a secretary and treasurer for terms determined by the board. The same
person may serve as both secretary and treasurer. The board shall estab-
lish an executive committee, nominating committee and other standing
or special committees and prescribe their duties and powers, and any
executive committee may exercise all such powers and duties of the board
as the board may delegate.

      (i) Members of the board of directors of the authority shall serve
without compensation. Members of the board attending meetings of the
board, or attending a subcommittee meeting thereof authorized by the
board, shall be paid subsistence allowances, mileage and other expenses
as provided in K.S.A. 75-3223, and amendments thereto.

      (j) No part of the funds of the authority shall inure to the benefit of,
or be distributed to, its employees, officers or members of the board,
except that the authority may make reasonable payments for expenses
incurred on its behalf relating to any of its lawful purposes and the au-
thority shall be authorized and empowered to pay reasonable compen-
sation for services rendered to or for its benefit relating to any of its lawful
purposes including to pay its employees reasonable compensation.

      (k) Any member of the board of directors other than an ex officio
member may be removed by an affirmative vote of seven of the members
of the board for malfeasance or misfeasance in office, failure to regularly
failing to attend meetings, or for any cause which renders said the mem-
ber incapable of or unfit to discharge the duties of director.

      (l) The board shall meet at least six times per year and at such other
times as it deems appropriate, or upon call by the president or the chair-
person, or upon written request of a majority of the directors. The board
may adopt, repeal and amend such rules, procedures and bylaws, not
contrary to law or inconsistent with this act, as it deems expedient for its
own governance and for the governance and management of the author-
ity. A majority of the total voting membership of the board shall constitute
a quorum for meetings, and. The board may act by a majority of those at
any meeting where a quorum is present, except upon such issues as the
board may determine shall require a vote of seven members for approval.
The initial board shall meet for the initial meeting upon call by the chan-
cellor of the university of Kansas who shall act as temporary chairperson
until officers of the board are elected pursuant to subsection (h).

      (m) The board shall appoint a president who shall serve at the plea-
sure of the board. The president shall serve as the chief executive officer
of the authority. The president's salary shall be set by the board. The
board may negotiate and enter into an employment agreement with the
individual selected as president of the authority which may provide for
compensation allowances, benefits and expenses as may be included in
such agreement. The president shall direct and supervise administrative
affairs and the general management of the authority. The president shall
be a nonvoting ex officio member of the board.

      (n) The board may provide to the president of the authority and
other employees designated by the board supplemental benefits in ad-
dition to the benefits provided in K.S.A. 1998 Supp. 76-3322, and amend-
ments thereto.

      (o) The authority shall continue until terminated by law, except that
no such law shall take effect so long as the authority has bonds outstand-
ing, unless adequate provision has been made for the payment or retire-
ment of such debts or obligations. Upon any such dissolution of the au-
thority, all property, funds and assets thereof shall be vested in the state,
university of Kansas medical center or other hospital entity as designated
by the board and approved by act of the Kansas legislature.``;

      Sec.  4. K.S.A. 1998 Supp. 76-3311 is hereby amended to read as
follows: 76-3311. (a) The authority may employ such employees as it may
require and upon such terms and conditions as it may establish. The
authority shall establish personnel, payroll, benefit and other such systems
as authorized by the board, such systems to be initially established or
contracted by the transfer date, or at such later date designated by the
board. The authority shall determine the qualifications and duties of its
employees subject to any statutes concerning licensure, certification or
registration under state law. The board shall develop and adopt policies
and procedures that will afford its employees grievance rights, ensure that
employment decisions shall be based upon merit and fitness of applicants
and shall prohibit discrimination because of race, religion, color, sex or
national origin.

      (b) Nothing in this act or any act of which it is amendatory shall be
construed as placing any officer or employee of the authority in the clas-
sified or the unclassified service under the Kansas civil service act.

      (c) All current hospital employees of the university of Kansas medical
center shall transfer to the authority. The authority and the university of
Kansas medical center shall then jointly determine any medical center
employees whose employment shall be transferred to the authority. The
university shall issue a written notice to all persons whose employment
will be transferred to the authority. After receipt of such notice, each
such employee may elect not to be employed by the authority by sub-
mitting a written statement of such election within 45 days after receipt
of such notice. Any classified employee of the university of Kansas med-
ical center who receives such notice of transfer to the authority and elects
not to become employed by the authority and who is not reemployed by
any department, institution, board, commission or agency of the state
shall be subject to the provisions of K.S.A. 75-2948 et seq. and amend-
ments thereto. Any unclassified employee or unclassified health care
worker of the university of Kansas medical center who receives such no-
tice of transfer to the authority and elects not to become employed by
the authority shall be subject to the employment policies of the university
of Kansas medical center. Any employee who accepts employment with
the authority shall not be considered to be involuntarily separated from
state employment. The authority shall not be treated as a state agency
for purposes of the state leave payment reserve fund under K.S.A. 75-
5542 through 75-5545, and amendments thereto.

      (d) Hospital employees and medical center employees of the uni-
versity of Kansas medical center who transfer to the authority to a position
of similar duties as of the transfer date shall receive the same rate of
compensation as was received by the employee prior to such transfer.

      (e) Notwithstanding the provisions of K.A.R. 1-9-13 or any other
rules and regulations or of any statute to the contrary, all vacation leave
and sick leave balances of employees of the university of Kansas medical
center who accept employment with the authority as of the transfer date
shall be transferred from the university of Kansas medical center to the
authority.

      (f) The authority and the university of Kansas medical center may
enter into agreements providing for the purchase of services of employees
of the university of Kansas medical center utilized in support of the hos-
pital by payment of such amounts as may be agreed upon by the parties.

      (g) Nothing in this act shall affect the representation rights of col-
lective bargaining organizations that represent employees of the univer-
sity of Kansas medical center who transfer to the authority, nor shall it
affect any term or condition of any collective bargaining agreement in
effect on the effective date of this act. The authority shall be a public
agency for purposes of the Kansas public employer-employee relations
act, K.S.A. 75-4321 et seq., and amendments thereto.

      (h) The authority is authorized to establish a health insurance plan
for the benefit of its employees or to enter into agreements with the
department of administration in accordance with K.S.A. 75-6503 and
amendments thereto, providing for the coverage of its employees under
the state employees' health insurance plan. Notwithstanding any other
provision of law to the contrary, any person whose employment is trans-
ferred to the authority as a result of this act and who is a member of any
plan providing health insurance coverage as an employee of the university
of Kansas medical center and who so elects to continue such coverage
shall continue to be a member of such health insurance plan under the
same terms and conditions as if no transfer had occurred, with such elec-
tion to continue through the current state employees' health insurance
coverage period. Alternatively, an employee may elect to become a mem-
ber of any health insurance plan established by the authority.

      Sec.  5. K.S.A. 1998 Supp. 76-3317 is hereby amended to read as
follows: 76-3317. This act shall be liberally construed. Nothing contained
herein is or shall be construed as a restriction of or limitation upon any
powers which the authority might otherwise have under other law of this
state, and the provisions of this act are cumulative to such powers. The
provisions hereof do and shall be construed to provide a complete, ad-
ditional and alternative method for the doing of the things authorized and
shall be regarded as supplemental and additional to any other laws. In-
sofar as the provisions of this act are inconsistent with the provisions of
any other law, general, specific or local, the provisions of this act shall be
controlling.

      Sec.  6. K.S.A. 1998 Supp. 76-3321 is hereby amended to read as
follows: 76-3321. The authority is exempt from the provisions of K.S.A.
12-1675 through 12-1677, 75-1250 through 75-1270, 75-2925 through 75-
2975, 75-3701 through 75-37,119, 75-4363, 75-4701 through 75-4744,
and 77-501 through 77-550 and K.S.A. 1998 Supp. 75-4362 and amend-
ments thereto.

      Sec.  7. K.S.A. 1998 Supp. 76-3322 is hereby amended to read as
follows: 76-3322. The authority shall affiliate with the Kansas public em-
ployees retirement system on the transfer date as defined in K.S.A. 1998
Supp. 76-3303 and amendments thereto, in accordance with the provi-
sions of K.S.A. 74-4910 and 74-4927 and amendments thereto for current
and future employees. Any person who was an employee of the university
of Kansas medical center and a member of the system on the transfer
date and whose employment is transferred to the authority as provided
in the university of Kansas hospital authority act shall continue to be a
member of the system. For all those members of the faculty and other
persons employed by the board of regents who were receiving assistance
in the purchase of retirement annuities as provided in K.S.A. 74-4925 and
amendments thereto on the transfer date and whose employment is trans-
ferred to the authority as provided in the university of Kansas hospital
authority act, the authority shall at the election of the board, either (1)
assist such employees in the purchase of retirement annuities as provided
in K.S.A. 74-4925 and amendments thereto or (2) adopt, in accordance
with requirements of the federal internal revenue code, retirement plans
sponsored by the authority providing substantially similar benefits as such
retirement annuities and the authority shall continue to provide the in-
sured death and disability benefits as provided in K.S.A. 74-4927a and
74-4927g and amendments thereto. For future employees employed by
the authority on or after the transfer date, the authority shall designate
whether such employee shall be a member of the system or whether the
authority shall either (1) provide assistance in the purchase of retirement
annuities as provided in K.S.A. 74-4925 and amendments thereto or (2)
provide that such employee shall be eligible for participation in retirement
plans sponsored by the authority.

      New Sec.  8. (a) The university of Kansas hospital authority is au-
thorized to construct buildings and facilities on state-owned property of
the university of Kansas medical center from any moneys of the university
of Kansas hospital authority if the capital improvement projects for such
buildings and facilities have received prior approval by the state board of
regents and the plans and specifications for such projects have received
prior approval by the secretary of administration. Such capital improve-
ment projects shall be totally financed from moneys of the university of
Kansas hospital authority and the buildings and facilities constructed shall
become the property of Kansas upon completion and acceptance by the
secretary of administration. No such capital improvement project for a
building or facility shall be approved by the state board of regents without
having first advised and consulted with the joint committee on state build-
ing construction.

      (b) The university of Kansas hospital authority is authorized to repair,
remodel or renovate state buildings and facilities of the university of Kan-
sas medical center from any moneys of the university of Kansas hospital
authority if the capital improvement projects for such repairs, remodeling
or renovations have received prior approval by the state board of regents
and the plans and specifications for such projects have received prior
approval by the secretary of administration. Such capital improvement
projects shall be totally financed from moneys of the university of Kansas
hospital authority and the repairs, remodeling or renovations shall be-
come the property of Kansas upon completion and acceptance by the
secretary of administration. No such capital improvement project to re-
pair, remodel or renovate any state building or facility shall be approved
by the state board of regents without having first advised and consulted
with the joint committee on state building construction.

      Sec.  9. K.S.A. 44-575 and 75-5542 and K.S.A. 1998 Supp. 76-3304,
76-3311, 76-3317, 76-3321 and 76-3322 are hereby repealed.

      Sec.  10. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved May 13, 1999.
 Published in the Kansas Register May 20, 1999.
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