Kansas Session Laws Chapter 172

CHAPTER 172 SENATE Substitute for HOUSE BILL No. 2558 An Act concerning the disposition of certain moneys for the benefit of children; disposition
of tobacco litigation settlement proceeds; creating the Kansas endowment for youth
fund, the children's initiatives fund and the children's initiatives accountability fund;
establishing the Kansas children's cabinet; prescribing certain powers, duties and func-
tions; providing for the investment and management of such funds; abolishing the chil-
dren's health care programs fund; amending K.S.A. 75-7021 and K.S.A. 1998 Supp. 20-
367, 38-1808 and 38-1901 and repealing the existing sections; also repealing K.S.A. 1998
Supp. 38-2008.
Be it enacted by the Legislature of the State of Kansas:

New Section 1. (a) There is hereby established in the state treasury
the Kansas endowment for youth fund which shall constitute a trust fund
and shall be invested, managed and administered in accordance with the
provisions of this act by the board of trustees of the Kansas public em-
ployees retirement system established by K.S.A. 74-4905 and amend-
ments thereto.

(b) All of the moneys received by the state pursuant to the tobacco
litigation settlement agreements entered into by the attorney general on
behalf of the state of Kansas, or pursuant to any judgment rendered,
regarding the litigation against tobacco industry companies and related
entities, shall be deposited in the state treasury and credited to the Kansas
endowment for youth fund. All such moneys shall constitute an endow-
ment which shall remain credited to the Kansas endowment for youth
fund except as provided in this section or in section 2 and amendments
thereto for transfers to the children's initiatives fund. Expenditures may
be made from the Kansas endowment for youth fund for the payment of
the operating expenses of the Kansas children's cabinet and the board of
trustees, including the expenses of investing and managing the moneys,
which are attributable to the Kansas endowment for youth fund. All mon-
eys credited to the Kansas endowment for youth fund shall be invested
to provide an ongoing source of investment earnings available for periodic
transfer to the children's initiatives fund in accordance with this act. All
expenditures from the Kansas endowment for youth 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 chair-
person of the board of trustees of the Kansas public employees retirement
system or by the chairperson's designee.

(c) On the effective date of this act, the director of accounts and
reports shall transfer all moneys credited to the children's health care
programs fund to the Kansas endowment for youth fund and the chil-
dren's health care programs fund is hereby abolished. On and after July
1, 1999, whenever the children's health care programs fund, or words of
like effect, is referred to or designated by statute, contract or other doc-
ument, such reference or designation shall be deemed to apply to the
Kansas endowment for youth fund.

New Sec. 2. (a) There is hereby established in the state treasury the
children's initiatives fund which shall be administered in accordance with
this section and the provisions of appropriation acts.

(b) All moneys credited to the children's initiatives fund shall be used
for the purposes of providing additional funding for programs, projects,
improvements, services and other purposes directly or indirectly benefi-
cial to the physical and mental health, welfare, safety and overall well-
being of children in Kansas as provided by appropriation or other acts of
the legislature. In allocating or appropriating moneys in the children's
initiatives fund, the legislature shall emphasize programs and services that
are data-driven and outcomes-based and may emphasize programs and
services that are generally directed toward improving the lives of children
and youth by combating community-identified risk factors associated with
children and youth becoming involved in tobacco, alcohol, drugs or ju-
venile delinquency. Programs funded must have a clearly articulated ob-
jective to be achieved with any funds received. As a condition precedent
to funding, every program must demonstrate that the program's design
is supported by credible research, that the program as implemented will
constitute best practices in the field, that data is available to benchmark
the program's desired outcomes and that an evaluation and assessment
component is part of the program design and that such evaluation is
capable of determining program performance, needed program modifi-
cations to enhance performance, ways in which the program could be
modified for transfer to other venues, and when performance no longer
justifies funding. Community-based programs must demonstrate the
availability of sufficient community leadership and the capacity to appro-
priately implement and administer the program that is funded. Programs
which require community mobilization to successfully achieve program
objectives must demonstrate a specific strategy to obtain the requisite
levels of community mobilization. Moneys allocated or appropriated from
the children's initiatives fund shall not be used to replace or substitute
for moneys appropriated from the state general fund in the immediately
preceding fiscal year.

(c) All expenditures from the children's initiatives fund shall be made
in accordance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved in the manner
prescribed by law.

(d) (1) On July 1, 2000, or as soon thereafter as moneys are available,
the director of accounts and reports shall transfer, in the following order
of priority, (A) first, $70,740,000 from the Kansas endowment for youth
fund to the state general fund and (B) second, $30,000,000 from the
Kansas endowment for youth fund to the children's initiatives fund.

(2) On July 1, 2001, or as soon thereafter as moneys are available,
the director of accounts and reports shall transfer $40,000,000 from the
Kansas endowment for youth fund to the children's initiatives fund and
shall transfer $10,000,000 from the Kansas endowment for youth fund to
the state general fund.

(3) On July 1, 2002, or as soon thereafter as moneys are available,
the director of accounts and reports shall transfer $45,000,000 from the
Kansas endowment for youth fund to the children's initiatives fund.

(4) On July 1 of each fiscal year thereafter, or as soon thereafter as
moneys are available, the director of accounts and reports shall transfer
from the Kansas endowment for youth fund to the children's initiatives
fund the amount equal to 102.5% of the amount transferred from the
Kansas endowment for youth fund to the children's initiatives fund pur-
suant to this section during the immediately preceding fiscal year.

(5) If the amounts to be received during any fiscal year under the
tobacco litigation settlement agreements entered into by the attorney
general on behalf of the state of Kansas, or pursuant to any judgment
rendered, regarding the litigation against tobacco industry companies and
related entities, are reduced or increased from the amount that was an-
ticipated to be received for such fiscal year, as of the time the settlement
agreements were entered into, then the legislature may adjust the amount
otherwise provided by this subsection to be transferred from the Kansas
endowment for youth fund to the children's initiatives fund for such fiscal
year by including provisions in appropriation acts for such fiscal year that
proportionally reduce or increase, as appropriate, the amount otherwise
provided by this subsection to be transferred from the Kansas endowment
for youth fund to the children's initiatives fund for such fiscal year. In
addition, for purposes of circumstances related to the investment of mon-
eys in the Kansas endowment for youth fund or other circumstances or
matters deemed sufficient by the legislature, the legislature may adjust
the amount otherwise provided by this subsection to be transferred from
the Kansas endowment for youth fund to the children's initiatives fund
for any fiscal year by including provisions in appropriation acts for such
fiscal year that proportionally reduce or increase, as appropriate, the
amount otherwise provided by this subsection to be transferred from the
Kansas endowment for youth fund to the children's initiatives fund for
such fiscal year.

(e) It is the intent of the legislature that, except as provided by this
section, no amounts shall be transferred from the Kansas endowment for
youth fund to the children's initiatives fund or to any other fund during
any state fiscal year.

(f) On or before the 10th day of each month, the director of accounts
and reports shall transfer from the state general fund to the Kansas en-
dowment for youth fund interest earnings based on (1) the average daily
balance of moneys in the children's initiatives fund for the preceding
month and (2) the net earnings rate of the pooled money investment
portfolio for the preceding month.

New Sec. 3. (a) The Kansas children's cabinet established by K.S.A.
1998 Supp. 38-1901 and amendments thereto shall advise the governor
and the legislature regarding the uses of the moneys credited to the chil-
dren's initiatives fund.

(b) The Kansas children's cabinet shall review, assess and evaluate all
uses of the moneys in the children's initiatives fund. The Kansas children's
cabinet shall study and shall initiate studies, assessments and evaluations,
by contract or otherwise, through institutions of higher education and
other appropriate research entities to identify best practices and to mea-
sure and otherwise determine the efficiency and efficacy of practices that
are utilized in programs, projects, improvements, services and other pur-
poses for which moneys are allocated or appropriated from the children's
initiatives fund. The costs of such reviews, assessments and evaluations
shall be paid from the children's initiatives accountability fund.

(c) There shall be conducted performance audits and other audit
work by the legislative post auditor upon request by the Kansas children's
cabinet and as directed by the legislative post audit committee in accord-
ance with the provisions of the legislative post audit act. The purpose of
such performance audits and other audit work shall be to provide inter-
ested parties with the program evaluation and research needed to make
informed decisions for the uses of moneys credited to the children's ini-
tiatives fund. The auditor to conduct such performance audit or other
audit work shall be specified in accordance with K.S.A. 46-1122 and
amendments thereto and if the legislative post audit committee specifies
under such statute that a firm, as defined by K.S.A. 46-1112 and amend-
ments thereto, is to perform all or part of the audit work of such audit,
such firm shall be selected and shall perform such audit work as provided
in K.S.A. 46-1123 and amendments thereto and K.S.A. 46-1125 through
46-1127 and amendments thereto. The audit work required pursuant to
this subsection shall be conducted in accordance with generally accepted
governmental auditing standards. The post auditor shall compute the rea-
sonably anticipated cost of the audit work performed by a firm for such
performance audit or other audit work pursuant to this subsection, subject
to review and approval by the contract audit committee established by
K.S.A. 46-1120 and amendments thereto, and the Kansas children's cab-
inet shall pay such cost from the children's initiatives accountability fund.
If all or part of the audit work for such performance audit or other audit
work is performed by the division of post audit and the division of post
audit incurs costs in addition to those attributable to the operations of
the division of post audit in the performance of other duties and respon-
sibilities, the post auditor shall charge the Kansas children's cabinet for
such additional costs and the Kansas children's cabinet shall pay such
charges from the children's initiatives accountability fund. The payment
of any such costs and any such charges shall be a transaction between the
division of post audit and the Kansas children's cabinet and such trans-
action shall be settled in accordance with the provisions of K.S.A. 75-5516
and amendments thereto. All moneys received by the division of post
audit for such costs and charges shall be credited to the audit services
fund.

(d) There is hereby established in the state treasury the children's
initiatives accountability fund which shall be administered in accordance
with this section and the provisions of appropriation acts. The governor
shall recommend and the legislature shall provide for moneys to be cred-
ited annually to the children's initiatives accountability fund by transfers
or other provisions of appropriation acts.

(e) All moneys credited to the children's initiatives accountability
fund shall be used for the purposes of providing funding for assessment
and evaluation of programs, projects, improvements, services and other
purposes for which moneys are allocated or appropriated from the chil-
dren's initiatives fund. All expenditures from the children's initiatives ac-
countability fund shall be made in accordance with appropriation acts
upon warrants of the director of accounts and reports issued pursuant to
vouchers approved in the manner prescribed by law.

(f) On or before the 10th day of each month, the director of accounts
and reports shall transfer from the state general fund to the Kansas en-
dowment for youth fund interest earnings based on (1) the average daily
balance of moneys in the children's initiatives accountability fund for the
preceding month and (2) the net earnings rate of the pooled money in-
vestment portfolio for the preceding month.

New Sec. 4. (a) The board of trustees is responsible for the manage-
ment and investment of the fund and shall discharge the board's duties
with respect to the fund solely in the interests of the beneficiaries of the
fund for the exclusive purpose of providing investment revenue for the
purposes for which the moneys may be used and defraying reasonable
expenses of administering the fund and shall invest and reinvest moneys
in the fund and acquire, retain, manage, including the exercise of any
voting rights and disposal of investments of the fund within the limitations
and according to the powers, duties and purposes as prescribed by this
section.

(b) Moneys in the fund shall be invested and reinvested to achieve
the investment objective which is preservation of the fund to provide
benefits to the beneficiaries of the fund and accordingly providing that
the moneys are as productive as possible, subject to the standards set
forth in this act. No moneys in the fund shall be invested or reinvested
if the sole or primary investment objective is for economic development
or social purposes or objectives.

(c) In investing and reinvesting moneys in the fund and in acquiring,
retaining, managing and disposing of investments of the fund, the board
of trustees shall exercise the judgment, care, skill, prudence and diligence
under the circumstances then prevailing, which persons of prudence, dis-
cretion and intelligence acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of like character and
with like aims by diversifying the investments of the fund so as to mini-
mize the risk of large losses, unless under the circumstances it is clearly
prudent not to do so, and not in regard to speculation but in regard to
the permanent disposition of similar funds, considering the probable in-
come as well as the probable safety of their capital.

(d) In the discharge of such management and investment responsi-
bilities the board of trustees may contract for the services of one or more
professional investment advisors or other consultants in the management
and investment of moneys in the fund and otherwise in the performance
of the duties of the board of trustees under this act.

(e) The board of trustees shall require that each person contracted
with under subsection (d) to provide services shall obtain commercial
insurance which provides for errors and omissions coverage for such per-
son in an amount to be specified by the board of trustees. The amount
of such coverage specified by the board of trustees shall be at least the
greater of $500,000 or 1% of the funds entrusted to such person up to a
maximum of $10,000,000. The board of trustees shall require a person
contracted with under subsection (d) to provide services give a fidelity
bond in a penal sum as may be fixed by law or, if not so fixed, as may be
fixed by the board of trustees, with corporate surety authorized to do
business in this state. Such persons contracted with the board of trustees
pursuant to subsection (d) and any persons contracted with such persons
to perform the functions specified in subsection (b) shall be deemed to
be fiduciary agents of the board of trustees in the performance of con-
tractual obligations.

(f) (1) Subject to the objective set forth in subsection (b) and the
standards set forth in subsection (c), the board of trustees shall formulate
and adopt policies and objectives for the investment and reinvestment of
moneys in the fund and the acquisition, retention, management and dis-
position of investments of the fund. Such policies and objectives shall be
in writing and shall include:

(A) Specific asset allocation standards and objectives;

(B) establishment of criteria for evaluating the risk versus the poten-
tial return on a particular investment; and

(C) a requirement that all investment advisors, and any managers or
others with similar duties and responsibilities as investment advisors, shall
immediately report all instances of default on investments to the board
of trustees and provide such board of trustees with recommendations and
options, including, but not limited to, curing the default or withdrawal
from the investment.

(2) The board of trustees shall review such policies and objectives,
make changes considered necessary or desirable and readopt such policies
and objectives on an annual basis.

(g) (1) Except as provided in subsection (d) and this subsection, the
custody of money and securities of the fund shall remain in the custody
of the state treasurer, except that the board of trustees may arrange for
the custody of such money and securities as it considers advisable with
one or more member banks or trust companies of the federal reserve
system or with one or more banks in the state of Kansas, or both, to be
held in safekeeping by the banks or trust companies for the collection of
the principal and interest or other income or of the proceeds of sale.

(2) The state treasurer and the board of trustees shall collect the
principal and interest or other income of investments or the proceeds of
sale of securities in the custody of the state treasurer and shall pay such
moneys when so collected into the state treasury to the credit of the fund.

(3) The principal and interest or other income or the proceeds of sale
of securities as provided in paragraph (1) of this subsection shall be re-
ported to the state treasurer and the board of trustees and credited to
the fund.

(h) All interest or other income of the investments of the moneys in
the fund, after payment of any management fees, shall be considered
income of the fund and shall be deposited in the state treasury to the
credit of the fund.

(i) As used in this section:

(1) ``Board of trustees'' means the board of trustees of the Kansas
public employees retirement system established by K.S.A. 74-4905 and
amendments thereto.

(2) ``Fiduciary'' means a person who, with respect to the fund, is a
person who:

(A) Exercises any discretionary authority with respect to administra-
tion of the fund;

(B) exercises any authority to invest or manage assets of the fund or
has any authority or responsibility to do so;

(C) provides investment advice for a fee or other direct or indirect
compensation with respect to the assets of the fund or has any authority
or responsibility to do so;

(D) provides actuarial, accounting, auditing, consulting, legal or other
professional services for a fee or other direct or indirect compensation
with respect to the fund or has any authority or responsibility to do so;
or

(E) is a member of the board of trustees or of the staff of the board
of trustees.

(3) ``Fund'' means the Kansas endowment for youth fund and the
family and the children endowment account of the family and children
investment fund.

(4) With respect to the investment of moneys in the Kansas endow-
ment for youth fund, ``purposes for which the moneys may be used''
means the purposes for which the moneys in the children's initiatives
fund may be used, as provided in section 2 and amendments thereto, and
``beneficiaries of the fund'' means the beneficiaries of the children's ini-
tiatives fund, as provided by section 2 and amendments thereto.

(5) With respect to the investment of moneys in the family and chil-
dren endowment account of the family and children investment fund,
``purposes for which the moneys may be used'' means the purposes for
which the moneys in the family and children trust account of the family
and children investment fund may be used, as provided in subsection (c)
of K.S.A. 1998 Supp. 38-1808, and amendments thereto, and ``benefici-
aries of the fund'' means the beneficiaries of the family and children trust
account of the family and children investment fund may be used, as pro-
vided in subsection (c) of K.S.A. 1998 Supp. 38-1808, and amendments
thereto.

New Sec. 5. The board of trustees of the Kansas public employees
retirement system shall report to the governor and to the legislature on
the moneys credited to the Kansas endowment for youth fund and in-
vestment earnings thereon at least once each calendar quarter and on a
monthly basis upon request of the governor, the president of the senate
or the speaker of the house of representatives. In addition, the board of
trustees shall submit a report on or before October 1 of each year to the
director of the budget, the director of the legislative research department
and the chairpersons of the senate committee on ways and means and
the house of representatives committee on appropriations detailing the
board's estimates as to the amounts of moneys that would be available
for transfer from the Kansas endowment for youth fund to the children's
initiatives fund during the ensuing fiscal year. The director of the budget
and the governor shall use the information in such report in the prepa-
ration of the governor's budget report under K.S.A. 75-3721 and amend-
ments thereto.

Sec. 6. K.S.A. 1998 Supp. 20-367 is hereby amended to read as fol-
lows: 20-367. Of the remittance of the balance of docket fees received
monthly by the state treasurer from clerks of the district court pursuant
to subsection (f) of K.S.A. 20-362, and amendments thereto, the state
treasurer shall deposit and credit to the access to justice fund, a sum
equal to 6.94% of the remittances of docket fees; to the juvenile detention
facilities fund, a sum equal to 4.45% of the remittances of docket fees;
to the judicial branch education fund, the state treasurer shall deposit
and credit a sum equal to 3.42% of the remittances of docket fees; to the
crime victims assistance fund, the state treasurer shall deposit and credit
a sum equal to .92% of the remittances of the docket fees; to the protec-
tion from abuse fund, the state treasurer shall deposit and credit a sum
equal to 2.75% of the remittances of the docket fees; to the judiciary
technology fund, the state treasurer shall deposit and credit a sum equal
to 6.93% of the remittances of docket fees; to the dispute resolution fund,
the state treasurer shall deposit and credit a sum equal to .57% of the
remittances of docket fees; to the Kansas ~~endowment for youth~~ juvenile
delinquency prevention trust fund, the state treasurer shall deposit and
credit a sum equal to 2.03% of the remittances of docket fees; and to the
permanent families account in the family and children investment fund,
the state treasurer shall deposit and credit a sum equal to .33% of the
remittances of docket fees. The balance remaining of the remittances of
docket fees shall be deposited and credited to the state general fund.

Sec. 7. K.S.A. 1998 Supp. 38-1808 is hereby amended to read as
follows: 38-1808. (a) There is hereby established in the state treasury the
family and children investment fund. ~~On and after July 1, 1997, such~~ The
family and children investment fund shall be administered as provided in
this section.

(b) There shall be credited to the family and children investment
fund appropriations, gifts, grants, contributions, matching funds and par-
ticipant payments.

(c) (1) There is hereby created the family and children trust account
in the family and children investment fund. The secretary of social and
rehabilitation services shall administer ~~this~~ the family and children trust
account.

(2) Moneys credited to the family and children trust account shall be
used for the following purposes: (A) Matching federal moneys to purchase
services relating to community-based programs for the broad range of
child abuse and neglect prevention activities; (B) providing start-up or
expansion grants for community-based prevention projects for the broad
range of child abuse and neglect prevention activities; (C) studying and
evaluating community-based prevention projects for the broad range of
child abuse and neglect prevention activities; (D) preparing, publishing,
purchasing and disseminating educational material dealing with the broad
range of child abuse and neglect prevention activities; and (E) payment
of the administrative costs of the family and children trust account and
of that portion of the ~~advisory committee on children and families~~ Kansas
children's cabinet, established pursuant to K.S.A. 1998 Supp. 38-1901,
and amendments thereto, which are attributable to the family and chil-
dren trust account, and that portion of the administrative costs of the
board of trustees, of the Kansas public employees retirement system es-
tablished by K.S.A. 74-4905, and amendments thereto, which are attrib-
utable to the family and children endowment account of the family and
children investment fund. No moneys in the family and children trust
account shall be used for the purpose of providing services for the vol-
untary termination of pregnancy.

(3) Expenditures from the family and children trust account shall be
subject to the approval of the ~~advisory committee on children and families~~
Kansas children's cabinet established pursuant to K.S.A. 1998 Supp. 38-
1901, and amendments thereto. All expenditures from the family and
children trust account 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 social and rehabilitation services
or a person designated by the secretary.

(d) (1) There is hereby created the permanent families account in
the family and children investment fund. The judicial administrator of
the courts shall administer this account.

(2) Moneys credited to the permanent families account shall be used
for the following purposes: (A) Not more than 12% of the amount cred-
ited to the permanent families account during the fiscal year may be used
to provide technical assistance to district courts or local groups wanting
to establish a local citizen review board or a court-appointed special ad-
vocate program, including but not limited to such staff as necessary to
provide such assistance, and to provide services necessary for the admin-
istration of such board or program, including but not limited to grants
administration, accounting, data collection, report writing and training of
local citizen review board staff; (B) grants to court-appointed special ad-
vocate programs, upon application approved by the administrative judge
of the judicial district where the program is located; and (C) grants to
district courts, upon application of the administrative judge of the judicial
district, for expenses of establishment, operation and evaluation of local
citizen review boards in the judicial district, including costs of: (i) Em-
ploying local citizen review board coordinators and clerical staff; (ii) tel-
ephone, photocopying and office equipment and supplies for which there
are shown to be no local funds available; (iii) mileage of staff and board
members; and (iv) training staff and board members.

(3) In addition to the other duties and powers provided by law, in
administering the permanent families account, the judicial administrator
shall:

(A) Accept and receive grants, loans, gifts or donations from any pub-
lic or private entity in support of programs administered by the judicial
administrator and assist in the development of supplemental funding
sources for local and state programs;

(B) consider applications for and make such grants from the perma-
nent families account as authorized by law; and

(C) receive reports from local citizen review boards established pur-
suant to K.S.A. 38-1812, and amendments thereto, regarding the status
of children under the supervision of the district courts and regarding
systemic barriers to permanence for children, assure that appropriate data
is maintained regularly and compiled at least once a year by such boards
on all cases reviewed and assure that the effectiveness of such boards is
evaluated on an ongoing basis, using, where possible, random selection
of local citizen review boards and cases for the evaluation and including
client outcome data to determine effectiveness.

(4) All expenditures from the permanent families account shall be
made in accordance with appropriation acts upon warrants of the director
of accounts and reports issued pursuant to vouchers approved by the
judicial administrator or a person designated by the judicial administrator.

(e) The family and children endowment account of the family and
children investment fund shall constitute and shall be administered as an
endowment for the purposes for which expenditures may be made from
the family and children trust account of the family and children invest-
ment fund. The family and children endowment account of the family and
children investment fund shall be invested by the board of trustees of the
Kansas public employees retirement system established by K.S.A. 74-4905,
and amendments thereto. All interest or other income of the investments
of the moneys in the family and children trust account of the family and
children investment fund, after payment of any management and admin-
istrative fees, shall be considered income of the family and children trust
account of the family and children investment fund and shall be deposited
in the state treasury to the credit of the family and children trust account
of the family and children investment fund.

(f) On or before the 10th of each month, the director of accounts and
reports shall transfer from the state general fund to the family and chil-
dren investment fund interest earnings based on:

(1) The average daily balance of moneys in the family and children
investment fund for the preceding month, excluding all amounts credited
to the family and children endowment account of the family and children
investment fund; and

(2) the net earnings rate of the pooled money investment portfolio
for the preceding month.

Sec. 8. K.S.A. 1998 Supp. 38-1901 is hereby amended to read as
follows: 38-1901. On and after ~~July 1, 1997~~ the effective date of this act:

(a) The advisory committee on children and families is hereby ~~created~~
redesignated and shall be known and referred to as the Kansas children's
cabinet.

(b) The ~~advisory committee on children and families~~ Kansas chil-
dren's cabinet shall consist of ~~nine~~ 15 members as follows: (1) The sec-
retary of health and environment, or the secretary's designee; (2) the
secretary of social and rehabilitation services, or the secretary's designee;
(3) ~~the secretary of human resources~~ a member of the state board of
regents selected by the state board of regents, or such member's designee;
(4) the commissioner of education, or the commissioner's designee; (5)
the commissioner of juvenile justice, or the commissioner's designee; (6)
a member of the Kansas supreme court selected by the Kansas supreme
court, or such member's designee; ~~and~~ (7) ~~three~~ five members of the
public who are interested in and knowledgeable about the needs of chil-
dren and families shall be appointed by the governor, ~~except that the~~
~~members appointed by the governor to the advisory committee on chil-~~
~~dren and families created by executive order 97-1 on January 9, 1997,~~
~~shall be deemed members appointed by the governor of the advisory~~
~~committee on children and families established by this section~~ which,
subject to the provisions of subsection (e), may include persons who are
children's advocates, members of organizations with experience in pro-
grams that benefit children or other individuals who have experience with
children's programs and services; (8) one person appointed by the speaker
of the house of representatives; (9) one person appointed by the minority
leader of the house of representatives; (10) one person appointed by the
president of the senate; and (11) one person appointed by the minority
leader of the senate. The members designated by clauses (1), (2), (3), (4),
(5) and (6) of this subsection shall be nonvoting members of the Kansas
children's cabinet. All other members shall be voting members.

(c) (1) Except as provided in paragraph (2) of this subsection, the
members of the ~~advisory committee on children and families~~ Kansas chil-
dren's cabinet appointed by the governor, speaker, president and minority
leaders shall serve ~~at the pleasure of the governor~~ for terms of four years
and until their successors are appointed and qualified. The governor shall
appoint a chairperson of the committee ~~and~~ from among the members
appointed by the governor. The chairperson shall serve in such office
throughout such member's current term of office and until a successor is
appointed and qualified. The members of the ~~committee~~ Kansas chil-
dren's cabinet may elect any additional officers from among its members
necessary to carry out the duties and functions of the ~~committee~~ Kansas
children's cabinet.

(2) Of the members first appointed by the governor, two shall be
appointed for terms of two years, two shall be appointed for terms of three
years and the member selected by the governor to be the chairperson shall
be appointed for a term of four years. The member first appointed by the
speaker of the house of representatives shall be appointed for a term of
one year, the member first appointed by the minority leader of the house
of representatives shall be appointed for a term of two years, the member
first appointed by the president of the senate shall be appointed for a term
of three years and the member first appointed by the minority leader of
the senate shall be appointed for a term of four years. The governor shall
designate the term for which each of the members first appointed by the
governor shall serve.

(3) All members appointed to fill vacancies in the membership of the
Kansas children's cabinet and all members appointed to succeed members
appointed to membership on the Kansas children's cabinet shall be ap-
pointed in like manner as that provided for the original appointment of
the member succeeded. All members appointed to fill vacancies of a mem-
ber of the Kansas children's cabinet appointed by the governor, the
speaker of the house of representatives, the minority leader of the house
of representatives, the president of the senate or the minority leader of
the senate shall be appointed to fill the unexpired term of such member.

(d) Not more than three members of the Kansas children's cabinet
appointed by the governor under subsection (b)(7) shall be members of
the same political party.

(e) (1) No person shall serve on the Kansas children's cabinet if such
person has knowingly acquired a substantial interest in any business. Any
such person who knowingly acquires such an interest shall vacate such
member's position on the Kansas children's cabinet.

(2) For purposes of this subsection, ``substantial interest'' means any
of the following:

(A) If an individual or an individual's spouse, either individually or
collectively, has owned within the preceding 12 months a legal or equi-
table interest exceeding $5,000 or 5% of any business, whichever is less,
the individual has a substantial interest in that business.

(B) If an individual or an individual's spouse, either individually or
collectively, has received during the preceding calendar year compensa-
tion which is or will be required to be included as taxable income on
federal income tax returns of the individual and spouse in an aggregate
amount of $2,000 from any business or combination of businesses, the
individual has a substantial interest in that business or combination of
businesses.

(C) If an individual or an individual's spouse holds the position of
officer, director, associate, partner or proprietor of any business, the in-
dividual has a substantial interest in that business, irrespective of that
amount of compensation received by the individual or the individual's
spouse.

(D) If an individual or an individual's spouse receives compensation
which is a portion or percentage of each separate fee or commission paid
to a business or combination of businesses, the individual has a substantial
interest in any client or customer who pays fees or commissions to the
business or combination of businesses from which fees or commissions the
individual or the individual's spouse, either individually or collectively,
received an aggregate of $2,000 or more in the preceding calendar year.

(3) As used in this subsection, ``client or customer'' means a business
or combination of businesses.

(4) As used in this subsection, ``business'' means any entity which is
eligible to receive funds from the children's initiatives fund, as provided
in section 2 and amendments thereto, from the children's initiatives ac-
countability fund, established by section 3 and amendments thereto, or
from the family and children trust account of the family and children
investment fund, as provided in K.S.A. 38-1808 and amendments thereto.

~~(d)~~ (f) The ~~advisory committee on children and families~~ Kansas chil-
dren's cabinet shall meet upon the call of the chairperson as necessary to
carry out the duties and functions of the ~~committee~~ Kansas children's
cabinet. A quorum of the Kansas children's cabinet shall be five voting
members.

~~(e)~~ (g) The ~~advisory committee on children and families~~ Kansas chil-
dren's cabinet shall have and perform the following functions:

(1) Assist the governor in developing and implementing a coordi-
nated, comprehensive service delivery system to serve the children and
families of Kansas;

(2) identify barriers to service and gaps in service due to strict defi-
nitions of boundaries between departments and agencies;

(3) facilitate interagency and interdepartmental cooperation toward
the common goal of serving children and families;

(4) investigate and identify methodologies for the combining of funds
across departmental boundaries to better serve children and families;

(5) propose actions needed to achieve coordination of funding and
services across departmental lines; ~~and~~

(6) encourage and facilitate joint planning and coordination between
the public and private sectors to better serve the needs of children and
families; and

(7) perform the duties and functions prescribed by section 3, and
amendments thereto.

~~(f)~~ (h) Members of the ~~advisory committee on children and families~~
Kansas children's cabinet shall not be paid compensation, but shall receive
subsistence allowances, mileage and other expenses as provided by K.S.A.
75-3223, and amendments thereto. The subsistence allowances, mileage
and other expenses as provided in K.S.A. 75-3223 and amendments
thereto shall be paid from available appropriations of the department of
social and rehabilitation services except that expenses of members who
are employed by a state agency shall be reimbursed by that state agency.

(i) On the effective date of this act, the advisory committee on children
and families is hereby abolished and all powers, duties, functions, records
and other property of the advisory committee on children and families
are hereby transferred to the Kansas children's cabinet created by this
section. Except as otherwise specifically provided by this act, the Kansas
children's cabinet shall be a continuation of the advisory committee on
children and families as it existed prior to the effective date of this act.

Sec. 9. K.S.A. 75-7021 is hereby amended to read as follows: 75-
7021. (a) There is hereby created in the state treasury the Kansas ~~endow-~~
~~ment for youth~~ juvenile delinquency prevention trust fund. Money cred-
ited to the Kansas juvenile delinquency prevention trust fund pursuant to
K.S.A. 20-367 and amendments thereto or by any other lawful means
shall be used solely for the purpose of making grants to further the pur-
pose of juvenile justice reform, including rational prevention programs
and programs for treatment and rehabilitation of juveniles and to further
the partnership between state and local communities. Such treatment and
rehabilitation programs should aim to combine accountability and sanc-
tions with increasingly intensive treatment and rehabilitation services with
an aim to provide greater public safety and provide intervention that will
be uniform and consistent.

(b) All expenditures from the Kansas ~~endowment for youth~~ juvenile
delinquency prevention trust fund shall be made in accordance with ap-
propriations acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the commissioner of juvenile
justice or by a person or persons designated by the commissioner.

(c) The commissioner of juvenile justice may apply for, receive and
accept money from any source for the purposes for which money in the
Kansas ~~endowment for youth~~ juvenile delinquency prevention trust fund
may be expended. Upon receipt of any such money, the commissioner
shall remit the entire amount at least monthly to the state treasurer, who
shall deposit it in the state treasury and credit it to the Kansas ~~endowment~~
~~for youth~~ juvenile delinquency prevention trust fund.

(d) Grants made to programs pursuant to this section shall be based
on the number of persons to be served and such other requirements as
may be established by the Kansas youth authority in guidelines estab-
lished and promulgated to regulate grants made under authority of this
section. The guidelines may include requirements for grant applications,
organizational characteristics, reporting and auditing criteria and such
other standards for eligibility and accountability as are deemed advisable
by the Kansas youth authority.

(e) On or before the 10th of each month, the director of accounts
and reports shall transfer from the state general fund to the Kansas ~~en-~~
~~dowment for youth~~ juvenile delinquency prevention trust fund interest
earnings based on:

(1) The average daily balance of moneys in the Kansas ~~endowment~~
~~for youth~~ juvenile delinquency prevention trust fund for the preceding
month; and

(2) the net earnings rate of the pooled money investment portfolio
for the preceding month.

(f) On and after the effective date of this act, the Kansas endowment
for youth trust fund created by this section prior to amendment by this
act is hereby redesignated as the Kansas juvenile delinquency prevention
trust fund. On and after the effective date of this act, whenever the Kansas
endowment for youth trust fund created by this section prior to amend-
ment by this act, or words of like effect, is referred to or designated by a
statute, contract or other document such reference or designation shall be
deemed to apply to the Kansas juvenile delinquency prevention trust fund.

Sec. 10. K .S.A. 75-7021 and K.S.A. 1998 Supp. 20-367, 38-1808, 38-
1901 and 38-2008 are hereby repealed.

Sec. 11. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 14, 1999.
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