CHAPTER 139 Senate Substitute for HOUSE BILL No. 2303 An  Act concerning the employment security law; relating to the classification of employers
thereunder; amending K.S.A. 44-703, 44-706, 44-710, 44-710a and 44-717 and repealing
the existing sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 44-703 is hereby amended to read as follows: 44-
703. As used in this act, unless the context clearly requires otherwise:

      (a)  (1) ``Annual payroll'' means the total amount of wages paid or
payable by an employer during the calendar year.

      (2) ``Average annual payroll'' means the average of the annual payrolls
of any employer for the last three calendar years immediately preceding
the computation date as hereinafter defined if the employer has been
continuously subject to contributions during those three calendar years
and has paid some wages for employment during each of such years. In
determining contribution rates for the calendar year, if an employer has
not been continuously subject to contribution for the three calendar years
immediately preceding the computation date but has paid wages subject
to contributions during only the two calendar years immediately preced-
ing the computation date, such employer's ``average annual payroll'' shall
be the average of the payrolls for those two calendar years.

      (3) ``Total wages'' means the total amount of wages paid or payable
by an employer during the calendar year, including that part of remu-
neration in excess of the limitation prescribed as provided in subsection
(o)(1) of this section.

      (b) ``Base period'' means the first four of the last five completed cal-
endar quarters immediately preceding the first day of an individual's ben-
efit year, except that the base period in respect to combined wage claims
means the base period as defined in the law of the paying state.

      (c) (1) ``Benefits'' means the money payments payable to an individ-
ual, as provided in this act, with respect to such individual's unemploy-
ment.

      (2) ``Regular benefits'' means benefits payable to an individual under
this act or under any other state law, including benefits payable to federal
civilian employees and to ex-servicemen pursuant to 5 U.S.C. chapter 85,
other than extended benefits.

      (d) ``Benefit year'' with respect to any individual, means the period
beginning with the first day of the first week for which such individual
files a valid claim for benefits, and such benefit year shall continue for
one full year. In the case of a combined wage claim, the benefit year shall
be the benefit year of the paying state. Following the termination of a
benefit year, a subsequent benefit year shall commence on the first day
of the first week with respect to which an individual next files a claim for
benefits. When such filing occurs with respect to a week which overlaps
the preceding benefit year, the subsequent benefit year shall commence
on the first day immediately following the expiration date of the preceding
benefit year. Any claim for benefits made in accordance with subsection
(a) of K.S.A. 44-709 and amendments thereto shall be deemed to be a
``valid claim'' for the purposes of this subsection if the individual has been
paid wages for insured work as required under subsection (e) of K.S.A.
44-705 and amendments thereto. Whenever a week of unemployment
overlaps two benefit years, such week shall, for the purpose of granting
waiting-period credit or benefit payment with respect thereto, be deemed
to be a week of unemployment within that benefit year in which the
greater part of such week occurs.

      (e) ``Commissioner'' or ``secretary'' means the secretary of human re-
sources.

      (f) (1) ``Contributions'' means the money payments to the state em-
ployment security fund which are required to be made by employers on
account of employment under K.S.A. 44-710 and amendments thereto,
and voluntary payments made by employers pursuant to such statute.

      (2) ``Payments in lieu of contributions'' means the money payments
to the state employment security fund from employers which are required
to make or which elect to make such payments under subsection (e) of
K.S.A. 44-710 and amendments thereto.

      (g) ``Employing unit'' means any individual or type of organization,
including any partnership, association, limited liability company, agency
or department of the state of Kansas and political subdivisions thereof,
trust, estate, joint-stock company, insurance company or corporation,
whether domestic or foreign including nonprofit corporations, or the re-
ceiver, trustee in bankruptcy, trustee or successor thereof, or the legal
representatives of a deceased person, which has in its employ one or more
individuals performing services for it within this state. All individuals per-
forming services within this state for any employing unit which maintains
two or more separate establishments within this state shall be deemed to
be employed by a single employing unit for all the purposes of this act.
Each individual employed to perform or to assist in performing the work
of any agent or employee of an employing unit shall be deemed to be
employed by such employing unit for all the purposes of this act, whether
such individual was hired or paid directly by such employing unit or by
such agent or employee, provided the employing unit had actual or con-
structive knowledge of the employment.

      (h) ``Employer'' means:

      (1) (A) Any employing unit for which agricultural labor as defined in
subsection (w) of this section is performed and which during any calendar
quarter in either the current or preceding calendar year paid remunera-
tion in cash of $20,000 or more to individuals employed in agricultural
labor or for some portion of a day in each of 20 different calendar weeks,
whether or not such weeks were consecutive, in either the current or the
preceding calendar year, employed in agricultural labor 10 or more in-
dividuals, regardless of whether they were employed at the same moment
of time.

      (B) For the purpose of this subsection (h)(1), any individual who is a
member of a crew furnished by a crew leader to perform service in ag-
ricultural labor for any other person shall be treated as an employee of
such crew leader if:

      (i) Such crew leader holds a valid certificate of registration under the
federal migrant and seasonal agricultural workers protection act or sub-
stantially all the members of such crew operate or maintain tractors,
mechanized harvesting or cropdusting equipment or any other mecha-
nized equipment, which is provided by such crew leader; and

      (ii) such individual is not in the employment of such other person
within the meaning of subsection (i) of this section.

      (C) For the purpose of this subsection (h)(1), in the case of any in-
dividual who is furnished by a crew leader to perform service in agricul-
tural labor for any other person and who is not treated as an employee
of such crew leader:

      (i) Such other person and not the crew leader shall be treated as the
employer of such individual; and

      (ii) such other person shall be treated as having paid cash remuner-
ation to such individual in an amount equal to the amount of cash re-
muneration paid to such individual by the crew leader, either on the crew
leader's own behalf or on behalf of such other person, for the service in
agricultural labor performed for such other person.

      (D) For the purposes of this subsection (h)(1) ``crew leader'' means
an individual who:

      (i) Furnishes individuals to perform service in agricultural labor for
any other person;

      (ii) pays, either on such individual's own behalf or on behalf of such
other person, the individuals so furnished by such individual for the serv-
ice in agricultural labor performed by them; and

      (iii) has not entered into a written agreement with such other person
under which such individual is designated as an employee of such other
person.

      (2)  (A) Any employing unit which: (i) In any calendar quarter in ei-
ther the current or preceding calendar year paid for service in employ-
ment wages of $1,500 or more, or (ii) for some portion of a day in each
of 20 different calendar weeks, whether or not such weeks were consec-
utive, in either the current or preceding calendar year, had in employment
at least one individual, whether or not the same individual was in em-
ployment in each such day.

      (B) Employment of individuals to perform domestic service or agri-
cultural labor and wages paid for such service or labor shall not be con-
sidered in determining whether an employing unit meets the criteria of
this subsection (h)(2).

      (3) Any employing unit for which service is employment as defined
in subsection (i)(3)(E) of this section.

      (4) (A) Any employing unit, whether or not it is an employing unit
under subsection (g) of this section, which acquires or in any manner
succeeds to (i) substantially all of the employing enterprises, organization,
trade or business, or (ii) substantially all the assets, of another employing
unit which at the time of such acquisition was an employer subject to this
act;

      (B) any employing unit which is controlled substantially, either di-
rectly or indirectly by legally enforceable means or otherwise, by the same
interest or interests, whether or not such interest or interests are an em-
ploying unit under subsection (g) of this section, which acquires or in any
manner succeeds to a portion of an employer's annual payroll, which is
less than 100% of such employer's annual payroll, and which intends to
continue the acquired portion as a going business.

      (5) Any employing unit which paid cash remuneration of $1,000 or
more in any calendar quarter in the current or preceding calendar year
to individuals employed in domestic service as defined in subsection (aa)
of this section.

      (6) Any employing unit which having become an employer under this
subsection (h) has not, under subsection (b) of K.S.A. 44-711 and amend-
ments thereto, ceased to be an employer subject to this act.

      (7) Any employing unit which has elected to become fully subject to
this act in accordance with subsection (c) of K.S.A. 44-711 and amend-
ments thereto.

      (8) Any employing unit not an employer by reason of any other par-
agraph of this subsection (h), for which within either the current or pre-
ceding calendar year services in employment are or were performed with
respect to which such employing unit is liable for any federal tax against
which credit may be taken for contributions required to be paid into a
state unemployment compensation fund; or which, as a condition for ap-
proval of this act for full tax credit against the tax imposed by the federal
unemployment tax act, is required, pursuant to such act, to be an ``em-
ployer'' under this act.

      (9) Any employing unit described in section 501(c)(3) of the federal
internal revenue code of 1986 which is exempt from income tax under
section 501(a) of the code that had four or more individuals in employ-
ment for some portion of a day in each of 20 different weeks, whether or
not such weeks were consecutive, within either the current or preceding
calendar year, regardless of whether they were employed at the same
moment of time.

      (i) ``Employment'' means:

      (1) Subject to the other provisions of this subsection, service, includ-
ing service in interstate commerce, performed by

      (A) Any active officer of a corporation; or

      (B) any individual who, under the usual common law rules applicable
in determining the employer-employee relationship, has the status of an
employee; or

      (C) any individual other than an individual who is an employee under
subsection (i)(1)(A) or subsection (i)(1)(B) above who performs services
for remuneration for any person:

      (i) As an agent-driver or commission-driver engaged in distributing
meat products, vegetable products, fruit products, bakery products, bev-
erages (other than milk), or laundry or dry-cleaning services, for such
individual's principal; or

      (ii) as a traveling or city salesman, other than as an agent-driver or
commission-driver, engaged upon a full-time basis in the solicitation on
behalf of, and the transmission to, a principal (except for side-line sales
activities on behalf of some other person) of orders from wholesalers,
retailers, contractors, or operators of hotels, restaurants, or other similar
establishments for merchandise for resale or supplies for use in their
business operations.

      For purposes of subsection (i)(1)(D), the term ``employment'' shall in-
clude services described in paragraphs (i) and (ii) above only if:

      (a) The contract of service contemplates that substantially all of the
services are to be performed personally by such individual;

      (b) the individual does not have a substantial investment in facilities
used in connection with the performance of the services (other than in
facilities for transportation); and

      (c) the services are not in the nature of a single transaction that is not
part of a continuing relationship with the person for whom the services
are performed.

      (2) The term ``employment'' shall include an individual's entire serv-
ice within the United States, even though performed entirely outside this
state if,

      (A) The service is not localized in any state, and

      (B) the individual is one of a class of employees who are required to
travel outside this state in performance of their duties, and

      (C) the individual's base of operations is in this state, or if there is no
base of operations, then the place from which service is directed or con-
trolled is in this state.

      (3) The term ``employment'' shall also include:

      (A) Services performed within this state but not covered by the pro-
visions of subsection (i)(1) or subsection (i)(2) shall be deemed to be
employment subject to this act if contributions are not required and paid
with respect to such services under an unemployment compensation law
of any other state or of the federal government.

      (B) Services performed entirely without this state, with respect to no
part of which contributions are required and paid under an unemploy-
ment compensation law of any other state or of the federal government,
shall be deemed to be employment subject to this act only if the individual
performing such services is a resident of this state and the secretary ap-
proved the election of the employing unit for whom such services are
performed that the entire service of such individual shall be deemed to
be employment subject to this act.

      (C) Services covered by an arrangement pursuant to subsection (l) of
K.S.A. 44-714 and amendments thereto between the secretary and the
agency charged with the administration of any other state or federal un-
employment compensation law, pursuant to which all services performed
by an individual for an employing unit are deemed to be performed en-
tirely within this state, shall be deemed to be employment if the secretary
has approved an election of the employing unit for whom such services
are performed, pursuant to which the entire service of such individual
during the period covered by such election is deemed to be insured work.

      (D) Services performed by an individual for wages or under any con-
tract of hire shall be deemed to be employment subject to this act unless
and until it is shown to the satisfaction of the secretary that: (i) Such
individual has been and will continue to be free from control or direction
over the performance of such services, both under the individual's con-
tract of hire and in fact; and (ii) such service is either outside the usual
course of the business for which such service is performed or that such
service is performed outside of all the places of business of the enterprise
for which such service is performed.

      (E) Service performed by an individual in the employ of this state or
any instrumentality thereof, any political subdivision of this state or any
instrumentality thereof, or in the employ of an Indian tribe, as defined
pursuant to section 3306(u) of the federal unemployment tax act, any
instrumentality of more than one of the foregoing or any instrumentality
which is jointly owned by this state or a political subdivision thereof or
Indian tribes and one or more other states or political subdivisions of this
or other states, provided that such service is excluded from ``employment''
as defined in the federal unemployment tax act by reason of section
3306(c)(7) of that act and is not excluded from ``employment'' under
subsection (i)(4)(A) of this section. For purposes of this section, the ex-
clusions from employment in subsections (i)(4)(A) and (i)(4)(L) shall also
be applicable to services performed in the employ of an Indian tribe.

      (F) Service performed by an individual in the employ of a religious,
charitable, educational or other organization which is excluded from the
term ``employment'' as defined in the federal unemployment tax act solely
by reason of section 3306(c)(8) of that act, and is not excluded from
employment under paragraphs (I) through (M) of subsection (i)(4).

      (G) The term ``employment'' shall include the service of an individual
who is a citizen of the United States, performed outside the United States
except in Canada, in the employ of an American employer (other than
service which is deemed ``employment'' under the provisions of subsec-
tion (i)(2) or subsection (i)(3) or the parallel provisions of another state's
law), if:

      (i) The employer's principal place of business in the United States is
located in this state; or

      (ii) the employer has no place of business in the United States, but

      (A) The employer is an individual who is a resident of this state; or

      (B) the employer is a corporation which is organized under the laws
of this state; or

      (C) the employer is a partnership or a trust and the number of the
partners or trustees who are residents of this state is greater than the
number who are residents of any other state; or

      (iii) none of the criteria of paragraphs (i) and (ii) above of this sub-
section (i)(3)(G) are met but the employer has elected coverage in this
state or, the employer having failed to elect coverage in any state, the
individual has filed a claim for benefits, based on such service, under the
law of this state.

      (H) An ``American employer,'' for purposes of subsection (i)(3)(G),
means a person who is:

      (i) An individual who is a resident of the United States; or

      (ii) a partnership if 2/3 or more of the partners are residents of the
United States; or

      (iii) a trust, if all of the trustees are residents of the United States; or

      (iv) a corporation organized under the laws of the United States or
of any state.

      (I) Notwithstanding subsection (i)(2) of this section, all service per-
formed by an officer or member of the crew of an American vessel or
American aircraft on or in connection with such vessel or aircraft, if the
operating office, from which the operations of such vessel or aircraft op-
erating within, or within and without, the United States are ordinarily and
regularly supervised, managed, directed and controlled is within this state.

      (J) Notwithstanding any other provisions of this subsection (i), service
with respect to which a tax is required to be paid under any federal law
imposing a tax against which credit may be taken for contributions re-
quired to be paid into a state unemployment compensation fund or which
as a condition for full tax credit against the tax imposed by the federal
unemployment tax act is required to be covered under this act.

      (K) Domestic service in a private home, local college club or local
chapter of a college fraternity or sorority performed for a person who
paid cash remuneration of $1,000 or more in any calendar quarter in the
current calendar year or the preceding calendar year to individuals em-
ployed in such domestic service.

      (4) The term ``employment'' shall not include: (A) Service performed
in the employ of an employer specified in subsection (h)(3) of this section
if such service is performed by an individual in the exercise of duties:

      (i) As an elected official;

      (ii) as a member of a legislative body, or a member of the judiciary,
of a state or, political subdivision or of an Indian tribe;

      (iii) as a member of the state national guard or air national guard;

      (iv) as an employee serving on a temporary basis in case of fire, storm,
snow, earthquake, flood or similar emergency;

      (v) in a position which, under or pursuant to the laws of this state or
tribal law, is designated as a major nontenured policymaking or advisory
position or as a policymaking or advisory position the performance of the
duties of which ordinarily does not require more than eight hours per
week;

      (B) service with respect to which unemployment compensation is
payable under an unemployment compensation system established by an
act of congress;

      (C) service performed by an individual in the employ of such indi-
vidual's son, daughter or spouse, and service performed by a child under
the age of 21 years in the employ of such individual's father or mother;

      (D) service performed in the employ of the United States govern-
ment or an instrumentality of the United States exempt under the con-
stitution of the United States from the contributions imposed by this act,
except that to the extent that the congress of the United States shall
permit states to require any instrumentality of the United States to make
payments into an unemployment fund under a state unemployment com-
pensation law, all of the provisions of this act shall be applicable to such
instrumentalities, and to services performed for such instrumentalities, in
the same manner, to the same extent and on the same terms as to all
other employers, employing units, individuals and services. If this state
shall not be certified for any year by the federal security agency under
section 3304(c) of the federal internal revenue code of 1986, the payments
required of such instrumentalities with respect to such year shall be re-
funded by the secretary from the fund in the same manner and within
the same period as is provided in subsection (f) of K.S.A. 44-717 and
amendments thereto with respect to contributions erroneously collected;

      (E) service covered by an arrangement between the secretary and
the agency charged with the administration of any other state or federal
unemployment compensation law pursuant to which all services per-
formed by an individual for an employing unit during the period covered
by such employing unit's duly approved election, are deemed to be per-
formed entirely within the jurisdiction of such other state or federal
agency;

      (F) service performed by an individual under the age of 18 in the
delivery or distribution of newspapers or shopping news, not including
delivery or distribution to any point for subsequent delivery or distribu-
tion;

      (G) service performed by an individual for an employing unit as an
insurance agent or as an insurance solicitor, if all such service performed
by such individual for such employing unit is performed for remuneration
solely by way of commission;

      (H) service performed in any calendar quarter in the employ of any
organization exempt from income tax under section 501(a) of the federal
internal revenue code of 1986 (other than an organization described in
section 401(a) or under section 521 of such code) if the remuneration for
such service is less than $50. In construing the application of the term
``employment,'' if services performed during 1/2 or more of any pay period
by an individual for the person employing such individual constitute em-
ployment, all the services of such individual for such period shall be
deemed to be employment; but if the services performed during more
than 1/2 of any such pay period by an individual for the person employing
such individual do not constitute employment, then none of the services
of such individual for such period shall be deemed to be employment. As
used in this subsection (i)(4)(H) the term ``pay period'' means a period
(of not more than 31 consecutive days) for which a payment of remuner-
ation is ordinarily made to the individual by the person employing such
individual. This subsection (i)(4)(H) shall not be applicable with respect
to services with respect to which unemployment compensation is payable
under an unemployment compensation system established by an act of
congress;

      (I) services performed in the employ of a church or convention or
association of churches, or an organization which is operated primarily
for religious purposes and which is operated, supervised, controlled, or
principally supported by a church or convention or association of
churches;

      (J) service performed by a duly ordained, commissioned, or licensed
minister of a church in the exercise of such individual's ministry or by a
member of a religious order in the exercise of duties required by such
order;

      (K) service performed in a facility conducted for the purpose of car-
rying out a program of:

      (i) Rehabilitation for individuals whose earning capacity is impaired
by age or physical or mental deficiency or injury, or

      (ii) providing remunerative work for individuals who because of their
impaired physical or mental capacity cannot be readily absorbed in the
competitive labor market, by an individual receiving such rehabilitation
or remunerative work;

      (L) service performed as part of an employment work-relief or work-
training program assisted or financed in whole or in part by any federal
agency or an agency of a state or political subdivision thereof or of an
Indian tribe, by an individual receiving such work relief or work training;

      (M) service performed by an inmate of a custodial or correctional
institution, unless such service is performed for a private, for-profit em-
ployer;

      (N) service performed, in the employ of a school, college, or univer-
sity, if such service is performed by a student who is enrolled and is
regularly attending classes at such school, college or university;

      (O) service performed by an individual who is enrolled at a nonprofit
or public educational institution which normally maintains a regular fac-
ulty and curriculum and normally has a regularly organized body of stu-
dents in attendance at the place where its educational activities are carried
on as a student in a full-time program, taken for credit at such institution,
which combines academic instruction with work experience, if such serv-
ice is an integral part of such program, and such institution has so certified
to the employer, except that this subsection (i)(4)(O) shall not apply to
service performed in a program established for or on behalf of an em-
ployer or group of employers;

      (P) service performed in the employ of a hospital licensed, certified
or approved by the secretary of health and environment, if such service
is performed by a patient of the hospital;

      (Q) services performed as a qualified real estate agent. As used in
this subsection (i)(4)(Q) the term ``qualified real estate agent'' means any
individual who is licensed by the Kansas real estate commission as a sa-
lesperson under the real estate brokers' and salespersons' license act and
for whom:

      (i) Substantially all of the remuneration, whether or not paid in cash,
for the services performed by such individual as a real estate salesperson
is directly related to sales or other output, including the performance of
services, rather than to the number of hours worked; and

      (ii) the services performed by the individual are performed pursuant
to a written contract between such individual and the person for whom
the services are performed and such contract provides that the individual
will not be treated as an employee with respect to such services for state
tax purposes;

      (R) services performed for an employer by an extra in connection
with any phase of motion picture or television production or television
commercials for less than 14 days during any calendar year. As used in
this subsection, the term ``extra'' means an individual who pantomimes in
the background, adds atmosphere to the set and performs such actions
without speaking and ``employer'' shall not include any employer which
is a governmental entity or any employer described in section 501(c)(3)
of the federal internal revenue code of 1986 which is exempt from income
under section 501(a) of the code;

      (S) services performed by an oil and gas contract pumper. As used in
this subsection (i)(4)(S), ``oil and gas contract pumper'' means a person
performing pumping and other services on one or more oil or gas leases,
or on both oil and gas leases, relating to the operation and maintenance
of such oil and gas leases, on a contractual basis for the operators of such
oil and gas leases and ``services'' shall not include services performed for
a governmental entity or any organization described in section 501(c)(3)
of the federal internal revenue code of 1986 which is exempt from income
taxation under section 501(a) of the code;

      (T) service not in the course of the employer's trade or business per-
formed in any calendar quarter by an employee, unless the cash remu-
neration paid for such service is $200 or more and such service is per-
formed by an individual who is regularly employed by such employer to
perform such service. For purposes of this paragraph, an individual shall
be deemed to be regularly employed by an employer during a calendar
quarter only if:

      (i) On each of some 24 days during such quarter such individual per-
forms for such employer for some portion of the day service not in the
course of the employer's trade or business, or

      (ii) such individual was regularly employed, as determined under sub-
paragraph (i), by such employer in the performance of such service during
the preceding calendar quarter.

      Such excluded service shall not include any services performed for an
employer which is a governmental entity or any employer described in
section 501(c)(3) of the federal internal revenue code of 1986 which is
exempt from income taxation under section 501(a) of the code;

      (U) service which is performed by any person who is a member of a
limited liability company and which is performed as a member or manager
of that limited liability company; and

      (V) services performed as a qualified direct seller. The term ``direct
seller'' means any person if:

      (i) Such person:

      (aa) (a) is engaged in the trade or business of selling or soliciting the
sale of consumer products to any buyer on a buy-sell basis or a deposit-
commission basis for resale, by the buyer or any other person, in the
home or otherwise rather than in a permanent retail establishment; or

      (bb) (b) is engaged in the trade or business of selling or soliciting the
sale of consumer products in the home or otherwise than in a permanent
retail establishment;

      (ii) substantially all the remuneration whether or not paid in cash for
the performance of the services described in subparagraph (i) is directly
related to sales or other output including the performance of services
rather than to the number of hours worked;

      (iii) the services performed by the person are performed pursuant to
a written contract between such person and the person for whom the
services are performed and such contract provides that the person will
not be treated as an employee for federal and state tax purposes;

      (iv) for purposes of this act, a sale or a sale resulting exclusively from
a solicitation made by telephone, mail, or other telecommunications
method, or other nonpersonal method does not satisfy the requirements
of this subsection; and

      (W) service performed as an election official or election worker, if
the amount of remuneration received by the individual during the cal-
endar year for services as an election official or election worker is less
than $1,000.

      (j) ``Employment office'' means any office operated by this state and
maintained by the secretary of human resources for the purpose of as-
sisting persons to become employed.

      (k) ``Fund'' means the employment security fund established by this
act, to which all contributions and reimbursement payments required and
from which all benefits provided under this act shall be paid and including
all money received from the federal government as reimbursements pur-
suant to section 204 of the federal-state extended compensation act of
1970, and amendments thereto.

      (l) ``State'' includes, in addition to the states of the United States of
America, any dependency of the United States, the Commonwealth of
Puerto Rico, the District of Columbia and the Virgin Islands.

      (m) ``Unemployment.'' An individual shall be deemed ``unemployed''
with respect to any week during which such individual performs no serv-
ices and with respect to which no wages are payable to such individual,
or with respect to any week of less than full-time work if the wages payable
to such individual with respect to such week are less than such individual's
weekly benefit amount.

      (n) ``Employment security administration fund'' means the fund es-
tablished by this act, from which administrative expenses under this act
shall be paid.

      (o) ``Wages'' means all compensation for services, including commis-
sions, bonuses, back pay and the cash value of all remuneration, including
benefits, paid in any medium other than cash. The reasonable cash value
of remuneration in any medium other than cash, shall be estimated and
determined in accordance with rules and regulations prescribed by the
secretary. Compensation payable to an individual which has not been
actually received by that individual within 21 days after the end of the
pay period in which the compensation was earned shall be considered to
have been paid on the 21st day after the end of that pay period. Effective
January 1, 1986, gratuities, including tips received from persons other
than the employing unit, shall be considered wages when reported in
writing to the employer by the employee. Employees must furnish a writ-
ten statement to the employer, reporting all tips received if they total $20
or more for a calendar month whether the tips are received directly from
a person other than the employer or are paid over to the employee by
the employer. This includes amounts designated as tips by a customer
who uses a credit card to pay the bill. Notwithstanding the other provi-
sions of this subsection (o), wages paid in back pay awards or settlements
shall be allocated to the week or weeks and reported in the manner as
specified in the award or agreement, or, in the absence of such specificity
in the award or agreement, such wages shall be allocated to the week or
weeks in which such wages, in the judgment of the secretary, would have
been paid. The term ``wages'' shall not include:

      (1) That part of the remuneration which has been paid in a calendar
year to an individual by an employer or such employer's predecessor in
excess of $3,000 for all calendar years prior to 1972, $4,200 for the cal-
endar years 1972 to 1977, inclusive, $6,000 for calendar years 1978 to
1982, inclusive, $7,000 for the calendar year 1983, and $8,000 with re-
spect to employment during any calendar year following 1983, except that
if the definition of the term ``wages'' as contained in the federal unem-
ployment tax act is amended to include remuneration in excess of $8,000
paid to an individual by an employer under the federal act during any
calendar year, wages shall include remuneration paid in a calendar year
to an individual by an employer subject to this act or such employer's
predecessor with respect to employment during any calendar year up to
an amount equal to the dollar limitation specified in the federal unem-
ployment tax act. For the purposes of this subsection (o)(1), the term
``employment'' shall include service constituting employment under any
employment security law of another state or of the federal government;

      (2) the amount of any payment (including any amount paid by an
employing unit for insurance or annuities, or into a fund, to provide for
any such payment) made to, or on behalf of, an employee or any of such
employee's dependents under a plan or system established by an em-
ployer which makes provisions for employees generally, for a class or
classes of employees or for such employees or a class or classes of em-
ployees and their dependents, on account of (A) sickness or accident
disability, except in the case of any payment made to an employee or such
employee's dependents, this subparagraph shall exclude from the term
``wages'' only payments which are received under a workers compensation
law. Any third party which makes a payment included as wages by reason
of this subparagraph (2)(A) shall be treated as the employer with respect
to such wages, or (B) medical and hospitalization expenses in connection
with sickness or accident disability, or (C) death;

      (3) any payment on account of sickness or accident disability, or med-
ical or hospitalization expenses in connection with sickness or accident
disability, made by an employer to, or on behalf of, an employee after the
expiration of six calendar months following the last calendar month in
which the employee worked for such employer;

      (4) any payment made to, or on behalf of, an employee or such em-
ployee's beneficiary:

      (A) From or to a trust described in section 401(a) of the federal in-
ternal revenue code of 1986 which is exempt from tax under section
501(a) of the federal internal revenue code of 1986 at the time of such
payment unless such payment is made to an employee of the trust as
remuneration for services rendered as such employee and not as a ben-
eficiary of the trust;

      (B) under or to an annuity plan which, at the time of such payment,
is a plan described in section 403(a) of the federal internal revenue code
of 1986;

      (C) under a simplified employee pension as defined in section
408(k)(1) of the federal internal revenue code of 1986, other than any
contribution described in section 408(k)(6) of the federal internal revenue
code of 1986;

      (D) under or to an annuity contract described in section 403(b) of
the federal internal revenue code of 1986, other than a payment for the
purchase of such contract which was made by reason of a salary reduction
agreement whether evidenced by a written instrument or otherwise;

      (E) under or to an exempt governmental deferred compensation plan
as defined in section 3121(v)(3) of the federal internal revenue code of
1986;

      (F) to supplement pension benefits under a plan or trust described
in any of the foregoing provisions of this subparagraph to take into ac-
count some portion or all of the increase in the cost of living, as deter-
mined by the secretary of labor, since retirement but only if such sup-
plemental payments are under a plan which is treated as a welfare plan
under section 3(2)(B)(ii) of the federal employee retirement income se-
curity act of 1974; or

      (G) under a cafeteria plan within the meaning of section 125 of the
federal internal revenue code of 1986;

      (5) the payment by an employing unit (without deduction from the
remuneration of the employee) of the tax imposed upon an employee
under section 3101 of the federal internal revenue code of 1986 with
respect to remuneration paid to an employee for domestic service in a
private home of the employer or for agricultural labor;

      (6) remuneration paid in any medium other than cash to an employee
for service not in the course of the employer's trade or business;

      (7) remuneration paid to or on behalf of an employee if and to the
extent that at the time of the payment of such remuneration it is reason-
able to believe that a corresponding deduction is allowable under section
217 of the federal internal revenue code of 1986 relating to moving ex-
penses;

      (8) any payment or series of payments by an employer to an employee
or any of such employee's dependents which is paid:

      (A) Upon or after the termination of an employee's employment re-
lationship because of (i) death or (ii) retirement for disability; and

      (B) under a plan established by the employer which makes provisions
for employees generally, a class or classes of employees or for such em-
ployees or a class or classes of employees and their dependents, other
than any such payment or series of payments which would have been paid
if the employee's employment relationship had not been so terminated;

      (9) remuneration for agricultural labor paid in any medium other than
cash;

      (10) any payment made, or benefit furnished, to or for the benefit of
an employee if at the time of such payment or such furnishing it is rea-
sonable to believe that the employee will be able to exclude such payment
or benefit from income under section 129 of the federal internal revenue
code of 1986 which relates to dependent care assistance programs;

      (11) the value of any meals or lodging furnished by or on behalf of
the employer if at the time of such furnishing it is reasonable to believe
that the employee will be able to exclude such items from income under
section 119 of the federal internal revenue code of 1986;

      (12) any payment made by an employer to a survivor or the estate of
a former employee after the calendar year in which such employee died;

      (13) any benefit provided to or on behalf of an employee if at the
time such benefit is provided it is reasonable to believe that the employee
will be able to exclude such benefit from income under section 74(c), 117
or 132 of the federal internal revenue code of 1986; or

      (14) any payment made, or benefit furnished, to or for the benefit of
an employee, if at the time of such payment or such furnishing it is rea-
sonable to believe that the employee will be able to exclude such payment
or benefit from income under section 127 of the federal internal revenue
code of 1986 relating to educational assistance to the employee.

      Nothing in any paragraph of subsection (o), other than paragraph (1),
shall exclude from the term ``wages'': (1) Any employer contribution un-
der a qualified cash or deferred arrangement, as defined in section 401(k)
of the federal internal revenue code of 1986, to the extent that such
contribution is not included in gross income by reason of section 402(a)(8)
of the federal internal revenue code of 1986; or (2) any amount treated
as an employer contribution under section 414(h)(2) of the federal inter-
nal revenue code of 1986.

      Any amount deferred under a nonqualified deferred compensation
plan shall be taken into account for purposes of this section as of the later
of when the services are performed or when there is no substantial risk
of forfeiture of the rights to such amount. Any amount taken into account
as wages by reason of this paragraph, and the income attributable thereto,
shall not thereafter be treated as wages for purposes of this section. For
purposes of this paragraph, the term ``nonqualified deferred compensa-
tion plan'' means any plan or other arrangement for deferral of compen-
sation other than a plan described in subsection (o)(4).

      (p) ``Week'' means such period or periods of seven consecutive cal-
endar days, as the secretary may by rules and regulations prescribe.

      (q) ``Calendar quarter'' means the period of three consecutive cal-
endar months ending March 31, June 30, September 30 or December
31, or the equivalent thereof as the secretary may by rules and regulations
prescribe.

      (r) ``Insured work'' means employment for employers.

      (s) ``Approved training'' means any vocational training course or
course in basic education skills approved by the secretary or a person or
persons designated by the secretary.

      (t) ``American vessel'' or ``American aircraft'' means any vessel or air-
craft documented or numbered or otherwise registered under the laws
of the United States; and any vessel or aircraft which is neither docu-
mented or numbered or otherwise registered under the laws of the
United States nor documented under the laws of any foreign country, if
its crew performs service solely for one or more citizens or residents of
the United States or corporations organized under the laws of the United
States or of any state.

      (u) ``Institution of higher education,'' for the purposes of this section,
means an educational institution which:

      (1) Admits as regular students only individuals having a certificate of
graduation from a high school, or the recognized equivalent of such a
certificate;

      (2) is legally authorized in this state to provide a program of education
beyond high school;

      (3) provides an educational program for which it awards a bachelor's
or higher degree, or provides a program which is acceptable for full credit
toward such a degree, a program of postgraduate or postdoctoral studies,
or a program of training to prepare students for gainful employment in a
recognized occupation; and

      (4) is a public or other nonprofit institution.

      Notwithstanding any of the foregoing provisions of this subsection (u),
all colleges and universities in this state are institutions of higher educa-
tion for purposes of this section, except that no college, university, junior
college or other postsecondary school or institution which is operated by
the federal government or any agency thereof shall be an institution of
higher education for purposes of the employment security law.

      (v) ``Educational institution'' means any institution of higher educa-
tion, as defined in subsection (u) of this section, or any institution, except
private for profit institutions, in which participants, trainees or students
are offered an organized course of study or training designed to transfer
to them knowledge, skills, information, doctrines, attitudes or abilities
from, by or under the guidance of an instructor or teacher and which is
approved, licensed or issued a permit to operate as a school by the state
department of education or other government agency that is authorized
within the state to approve, license or issue a permit for the operation of
a school or to an Indian tribe in the operation of an educational institu-
tion. The courses of study or training which an educational institution
offers may be academic, technical, trade or preparation for gainful em-
ployment in a recognized occupation.

      (w)  (1) ``Agricultural labor'' means any remunerated service:

      (A) On a farm, in the employ of any person, in connection with cul-
tivating the soil, or in connection with raising or harvesting any agricul-
tural or horticultural commodity, including the raising, shearing, feeding,
caring for, training, and management of livestock, bees, poultry, and fur-
bearing animals and wildlife.

      (B) In the employ of the owner or tenant or other operator of a farm,
in connection with the operating, management, conservation, improve-
ment, or maintenance of such farm and its tools and equipment, or in
salvaging timber or clearing land of brush and other debris left by a hur-
ricane, if the major part of such service is performed on a farm.

      (C) In connection with the production or harvesting of any commod-
ity defined as an agricultural commodity in section (15)(g) of the agri-
cultural marketing act, as amended (46 Stat. 1500, sec. 3; 12 U.S.C. 1141j)
or in connection with the ginning of cotton, or in connection with the
operation or maintenance of ditches, canals, reservoirs or waterways, not
owned or operated for profit, used exclusively for supplying and storing
water for farming purposes.

      (D)  (i) In the employ of the operator of a farm in handling, planting,
drying, packing, packaging, processing, freezing, grading, storing, or de-
livering to storage or to market or to a carrier for transportation to market,
in its unmanufactured state, any agricultural or horticultural commodity;
but only if such operator produced more than 1/2 of the commodity with
respect to which such service is performed;

      (ii) in the employ of a group of operators of farms (or a cooperative
organization of which such operators are members) in the performance
of service described in paragraph (i) above of this subsection (w)(1)(D),
but only if such operators produced more than 1/2 of the commodity with
respect to which such service is performed;

      (iii) the provisions of paragraphs (i) and (ii) above of this subsection
(w)(1)(D) shall not be deemed to be applicable with respect to service
performed in connection with commercial canning or commercial freez-
ing or in connection with any agricultural or horticultural commodity after
its delivery to a terminal market for distribution for consumption.

      (E) On a farm operated for profit if such service is not in the course
of the employer's trade or business.

      (2) ``Agricultural labor'' does not include service performed prior to
January 1, 1980, by an individual who is an alien admitted to the United
States to perform service in agricultural labor pursuant to sections 214(c)
and 101(a)(15)(H) of the federal immigration and nationality act.

      (3) As used in this subsection (w), the term ``farm'' includes stock,
dairy, poultry, fruit, fur-bearing animal, and truck farms, plantations,
ranches, nurseries, ranges, greenhouses, or other similar structures used
primarily for the raising of agricultural or horticultural commodities, and
orchards.

      (4) For the purpose of this section, if an employing unit does not
maintain sufficient records to separate agricultural labor from other em-
ployment, all services performed during any pay period by an individual
for the person employing such individual shall be deemed to be agricul-
tural labor if services performed during 1/2 or more of such pay period
constitute agricultural labor; but if the services performed during more
than 1/2 of any such pay period by an individual for the person employing
such individual do not constitute agricultural labor, then none of the serv-
ices of such individual for such period shall be deemed to be agricultural
labor. As used in this subsection (w), the term ``pay period'' means a
period of not more than 31 consecutive days for which a payment of
remuneration is ordinarily made to the individual by the person employ-
ing such individual.

      (x) ``Reimbursing employer'' means any employer who makes pay-
ments in lieu of contributions to the employment security fund as pro-
vided in subsection (e) of K.S.A. 44-710 and amendments thereto.

      (y) ``Contributing employer'' means any employer other than a re-
imbursing employer or rated governmental employer.

      (z) ``Wage combining plan'' means a uniform national arrangement
approved by the United States secretary of labor in consultation with the
state unemployment compensation agencies and in which this state shall
participate, whereby wages earned in one or more states are transferred
to another state, called the ``paying state,'' and combined with wages in
the paying state, if any, for the payment of benefits under the laws of the
paying state and as provided by an arrangement so approved by the
United States secretary of labor.

      (aa) ``Domestic service'' means any service for a person in the oper-
ation and maintenance of a private household, local college club or local
chapter of a college fraternity or sorority, as distinguished from service
as an employee in the pursuit of an employer's trade, occupation, pro-
fession, enterprise or vocation.

      (bb) ``Rated governmental employer'' means any governmental entity
which elects to make payments as provided by K.S.A. 44-710d and
amendments thereto.

      (cc) ``Benefit cost payments'' means payments made to the employ-
ment security fund by a governmental entity electing to become a rated
governmental employer.

      (dd) ``Successor employer'' means any employer, as described in sub-
section (h) of this section, which acquires or in any manner succeeds to
(1) substantially all of the employing enterprises, organization, trade or
business of another employer or (2) substantially all the assets of another
employer.

      (ee) ``Predecessor employer'' means an employer, as described in
subsection (h) of this section, who has previously operated a business or
portion of a business with employment to which another employer has
succeeded.

      (ff) ``Lessor employing unit'' means any independently established
business entity which engages in the business of providing leased em-
ployees to a client lessee.

      (gg) ``Client lessee'' means any individual, organization, partnership,
corporation or other legal entity leasing employees from a lessor employ-
ing unit.

      Sec.  2. K.S.A. 44-706 is hereby amended to read as follows: 44-706.
An individual shall be disqualified for benefits:

      (a) If the individual left work voluntarily without good cause attrib-
utable to the work or the employer, subject to the other provisions of this
subsection (a). After a temporary job assignment, failure of an individual
to affirmatively request an additional assignment on the next succeeding
workday, if required by the employment agreement, after completion of
a given work assignment, shall constitute leaving work voluntarily. The
disqualification shall begin the day following the separation and shall con-
tinue until after the individual has become reemployed and has had earn-
ings from insured work of at least three times the individual's weekly
benefit amount. An individual shall not be disqualified under this sub-
section (a) if:

      (1) The individual was forced to leave work because of illness or injury
upon the advice of a licensed and practicing health care provider and,
upon learning of the necessity for absence, immediately notified the em-
ployer thereof, or the employer consented to the absence, and after re-
covery from the illness or injury, when recovery was certified by a prac-
ticing health care provider, the individual returned to the employer and
offered to perform services and the individual's regular work or compa-
rable and suitable work was not available; as used in this paragraph (1)
``health care provider'' means any person licensed by the proper licensing
authority of any state to engage in the practice of medicine and surgery,
osteopathy, chiropractic, dentistry, optometry, podiatry or psychology;

      (2) the individual left temporary work to return to the regular em-
ployer;

      (3) the individual left work to enlist in the armed forces of the United
States, but was rejected or delayed from entry;

      (4) the individual left work because of the voluntary or involuntary
transfer of the individual's spouse from one job to another job, which is
for the same employer or for a different employer, at a geographic loca-
tion which makes it unreasonable for the individual to continue work at
the individual's job;

      (5) the individual left work because of hazardous working conditions;
in determining whether or not working conditions are hazardous for an
individual, the degree of risk involved to the individual's health, safety
and morals, the individual's physical fitness and prior training and the
working conditions of workers engaged in the same or similar work for
the same and other employers in the locality shall be considered; as used
in this paragraph (5), ``hazardous working conditions'' means working con-
ditions that could result in a danger to the physical or mental well-being
of the individual; each determination as to whether hazardous working
conditions exist shall include, but shall not be limited to, a consideration
of (A) the safety measures used or the lack thereof, and (B) the condition
of equipment or lack of proper equipment; no work shall be considered
hazardous if the working conditions surrounding the individual's work are
the same or substantially the same as the working conditions generally
prevailing among individuals performing the same or similar work for
other employers engaged in the same or similar type of activity;

      (6) the individual left work to enter training approved under section
236(a)(1) of the federal trade act of 1974, provided the work left is not
of a substantially equal or higher skill level than the individual's past
adversely affected employment (as defined for purposes of the federal
trade act of 1974), and wages for such work are not less than 80% of the
individual's average weekly wage as determined for the purposes of the
federal trade act of 1974;

      (7) the individual left work because of unwelcome harassment of the
individual by the employer or another employee of which the employing
unit had knowledge;

      (8) the individual left work to accept better work; each determination
as to whether or not the work accepted is better work shall include, but
shall not be limited to, consideration of (A) the rate of pay, the hours of
work and the probable permanency of the work left as compared to the
work accepted, (B) the cost to the individual of getting to the work left
in comparison to the cost of getting to the work accepted, and (C) the
distance from the individual's place of residence to the work accepted in
comparison to the distance from the individual's residence to the work
left;

      (9) the individual left work as a result of being instructed or requested
by the employer, a supervisor or a fellow employee to perform a service
or commit an act in the scope of official job duties which is in violation
of an ordinance or statute;

      (10) the individual left work because of a violation of the work agree-
ment by the employing unit and, before the individual left, the individual
had exhausted all remedies provided in such agreement for the settlement
of disputes before terminating; or

      (11) after making reasonable efforts to preserve the work, the indi-
vidual left work due to a personal emergency of such nature and com-
pelling urgency that it would be contrary to good conscience to impose a
disqualification.

      (b) If the individual has been discharged for misconduct connected
with the individual's work. The disqualification shall begin the day follow-
ing the separation and shall continue until after the individual becomes
reemployed and has had earnings from insured work of at least three
times the individual's determined weekly benefit amount, except that if
an individual is discharged for gross misconduct connected with the in-
dividual's work, such individual shall be disqualified for benefits until such
individual again becomes employed and has had earnings from insured
work of at least eight times such individual's determined weekly benefit
amount. In addition, all wage credits attributable to the employment from
which the individual was discharged for gross misconduct connected with
the individual's work shall be canceled. No such cancellation of wage
credits shall affect prior payments made as a result of a prior separation.

      (1) For the purposes of this subsection (b), ``misconduct'' is defined
as a violation of a duty or obligation reasonably owed the employer as a
condition of employment. The term ``gross misconduct'' as used in this
subsection (b) shall be construed to mean conduct evincing extreme, will-
ful or wanton misconduct as defined by this subsection (b).

      (2) For the purposes of this subsection (b), the use of or impairment
caused by an alcoholic beverage, a cereal malt beverage or a nonprescri-
bed controlled substance by an individual while working shall be conclu-
sive evidence of misconduct and the possession of an alcoholic beverage,
a cereal malt beverage or a nonprescribed controlled substance by an
individual while working shall be prima facie evidence of conduct which
is a violation of a duty or obligation reasonably owed to the employer as
a condition of employment. For purposes of this subsection (b), the dis-
qualification of an individual from employment which disqualification is
required by the provisions of the drug free workplace act, 41 U.S.C. 701
et seq. or is otherwise required by law because the individual refused to
submit to or failed a chemical test which was required by law, shall be
conclusive evidence of misconduct. Refusal to submit to a chemical test
administered pursuant to an employee assistance program or other drug
or alcohol treatment program in which the individual was participating
voluntarily or as a condition of further employment shall also be conclu-
sive evidence of misconduct. Alcoholic liquor shall be defined as provided
in K.S.A. 41-102 and amendments thereto. Cereal malt beverage shall be
defined as provided in K.S.A. 41-2701 and amendments thereto. Con-
trolled substance shall be defined as provided in K.S.A. 65-4101 and
amendments thereto of the uniform controlled substances act. As used
in this subsection (b)(2), ``required by law'' means required by a federal
or state law, a federal or state rule or regulation having the force and
effect of law, a county resolution or municipal ordinance, or a policy
relating to public safety adopted in open meeting by the governing body
of any special district or other local governmental entity. An individual's
refusal to submit to a chemical test shall not be admissible evidence to
prove misconduct unless the test is required by and meets the standards
of the drug free workplace act, 41 U.S.C. 701 et seq., the test was ad-
ministered as part of an employee assistance program or other drug or
alcohol treatment program in which the employee was participating vol-
untarily or as a condition of further employment, the test was otherwise
required by law and the test constituted a required condition of employ-
ment for the individual's job, or, there was probable cause to believe that
the individual used, possessed or was impaired by an alcoholic beverage,
a cereal malt beverage or a controlled substance while working. The re-
sults of a chemical test shall not be admissible evidence to prove miscon-
duct unless the following conditions were met:

      (A) Either (i) the test was required by law, the test was administered
pursuant to the drug free workplace act, 41 U.S.C. 701 et seq., (ii) the
test was administered as part of an employee assistance program or other
drug or alcohol treatment program in which the employee was partici-
pating voluntarily or as a condition of further employment, (iii) the test
was required by law and the test constituted a required condition of em-
ployment for the individual's job, or (iv) there was probable cause to
believe that the individual used, had possession of, or was impaired by
the alcoholic beverage, the cereal malt beverage or the controlled sub-
stance while working;

      (B) the test sample was collected either (i) as prescribed by the drug
free workplace act, 41 U.S.C. 701 et seq., (ii) as prescribed by an em-
ployee assistance program or other drug or alcohol treatment program in
which the employee was participating voluntarily or as a condition of
further employment, (iii) as prescribed by a test which was required by
law and which constituted a required condition of employment for the
individual's job, or (iv) at a time contemporaneous with the events estab-
lishing probable cause;

      (C) the collecting and labeling of the test sample was performed by
a licensed health care professional or any other individual authorized to
collect or label test samples by federal or state law, or a federal or state
rule or regulation having the force and effect of law, including law en-
forcement personnel;

      (D) the test was performed by a laboratory approved by the United
States department of health and human services or licensed by the de-
partment of health and environment, except that a blood sample may be
tested for alcohol content by a laboratory commonly used for that purpose
by state law enforcement agencies;

      (E) the test was confirmed by gas chromatography, gas chromatog-
raphy-mass spectroscopy or other comparably reliable analytical method,
except that no such confirmation is required for a blood alcohol sample;
and

      (F) the foundation evidence must establish, beyond a reasonable
doubt, that the test results were from the sample taken from the individ-
ual.

      (3) For the purposes of this subsection (b), misconduct shall include,
but not be limited to repeated absence, including lateness, from sched-
uled work if the facts show:

      (A) The individual was absent without good cause;

      (B) the absence was in violation of the employer's written absentee-
ism policy;

      (C) the employer gave or sent written notice to the individual, at the
individual's last known address, that future absence may or will result in
discharge;

      (D) the employee had knowledge of the employer's written absen-
teeism policy; and

      (E) if an employee disputes being absent without good cause, the
employee shall present evidence that a majority of the employee's ab-
sences were for good cause.

      (4) An individual shall not be disqualified under this subsection (b)
if the individual is discharged under the following circumstances:

      (A) The employer discharged the individual after learning the indi-
vidual was seeking other work or when the individual gave notice of future
intent to quit;

      (B) the individual was making a good-faith effort to do the assigned
work but was discharged due to: (i) Inefficiency, (ii) unsatisfactory per-
formance due to inability, incapacity or lack of training or experience, (iii)
isolated instances of ordinary negligence or inadvertence, (iv) good-faith
errors in judgment or discretion, or (v) unsatisfactory work or conduct
due to circumstances beyond the individual's control; or

      (C) the individual's refusal to perform work in excess of the contract
of hire.

      (c) If the individual has failed, without good cause, to either apply
for suitable work when so directed by the employment office of the sec-
retary of human resources, or to accept suitable work when offered to
the individual by the employment office, the secretary of human re-
sources, or an employer, such disqualification shall begin with the week
in which such failure occurred and shall continue until the individual
becomes reemployed and has had earnings from insured work of at least
three times such individual's determined weekly benefit amount. In de-
termining whether or not any work is suitable for an individual, the sec-
retary of human resources, or a person or persons designated by the
secretary, shall consider the degree of risk involved to health, safety and
morals, physical fitness and prior training, experience and prior earnings,
length of unemployment and prospects for securing local work in the
individual's customary occupation or work for which the individual is rea-
sonably fitted by training or experience, and the distance of the available
work from the individual's residence. Notwithstanding any other provi-
sions of this act, an otherwise eligible individual shall not be disqualified
for refusing an offer of suitable employment, or failing to apply for suit-
able employment when notified by an employment office, or for leaving
the individual's most recent work accepted during approved training, in-
cluding training approved under section 236(a)(1) of the trade act of 1974,
if the acceptance of or applying for suitable employment or continuing
such work would require the individual to terminate approved training
and no work shall be deemed suitable and benefits shall not be denied
under this act to any otherwise eligible individual for refusing to accept
new work under any of the following conditions: (1) If the position offered
is vacant due directly to a strike, lockout or other labor dispute; (2) if the
remuneration, hours or other conditions of the work offered are substan-
tially less favorable to the individual than those prevailing for similar work
in the locality; (3) if as a condition of being employed, the individual would
be required to join or to resign from or refrain from joining any labor
organization.

      (d) For any week with respect to which the secretary of human re-
sources, or a person or persons designated by the secretary, finds that the
individual's unemployment is due to a stoppage of work which exists be-
cause of a labor dispute or there would have been a work stoppage had
normal operations not been maintained with other personnel previously
and currently employed by the same employer at the factory, establish-
ment or other premises at which the individual is or was last employed,
except that this subsection (d) shall not apply if it is shown to the satis-
faction of the secretary of human resources, or a person or persons des-
ignated by the secretary, that: (1) The individual is not participating in or
financing or directly interested in the labor dispute which caused the
stoppage of work; and (2) the individual does not belong to a grade or
class of workers of which, immediately before the commencement of the
stoppage, there were members employed at the premises at which the
stoppage occurs any of whom are participating in or financing or directly
interested in the dispute. If in any case separate branches of work which
are commonly conducted as separate businesses in separate premises are
conducted in separate departments of the same premises, each such de-
partment shall, for the purpose of this subsection (d), be deemed to be
a separate factory, establishment or other premises. For the purposes of
this subsection (d), failure or refusal to cross a picket line or refusal for
any reason during the continuance of such labor dispute to accept the
individual's available and customary work at the factory, establishment or
other premises where the individual is or was last employed shall be
considered as participation and interest in the labor dispute.

      (e) For any week with respect to which or a part of which the indi-
vidual has received or is seeking unemployment benefits under the un-
employment compensation law of any other state or of the United States,
except that if the appropriate agency of such other state or the United
States finally determines that the individual is not entitled to such un-
employment benefits, this disqualification shall not apply.

      (f) For any week with respect to which the individual is entitled to
receive any unemployment allowance or compensation granted by the
United States under an act of congress to ex-service men and women in
recognition of former service with the military or naval services of the
United States.

      (g) For the period of one year beginning with the first day following
the last week of unemployment for which the individual received benefits,
or for one year from the date the act was committed, whichever is the
later, if the individual, or another in such individual's behalf with the
knowledge of the individual, has knowingly made a false statement or
representation, or has knowingly failed to disclose a material fact to obtain
or increase benefits under this act or any other unemployment compen-
sation law administered by the secretary of human resources.

      (h) For any week with respect to which the individual is receiving
compensation for temporary total disability or permanent total disability
under the workmen's compensation law of any state or under a similar
law of the United States.

      (i) For any week of unemployment on the basis of service in an in-
structional, research or principal administrative capacity for an educa-
tional institution as defined in subsection (v) of K.S.A. 44-703 and amend-
ments thereto, if such week begins during the period between two
successive academic years or terms or, when an agreement provides in-
stead for a similar period between two regular but not successive terms
during such period or during a period of paid sabbatical leave provided
for in the individual's contract, if the individual performs such services in
the first of such academic years or terms and there is a contract or a
reasonable assurance that such individual will perform services in any
such capacity for any educational institution in the second of such aca-
demic years or terms.

      (j) For any week of unemployment on the basis of service in any
capacity other than service in an instructional, research, or administrative
capacity in an educational institution, as defined in subsection (v) of
K.S.A. 44-703 and amendments thereto, if such week begins during the
period between two successive academic years or terms if the individual
performs such services in the first of such academic years or terms and
there is a reasonable assurance that the individual will perform such serv-
ices in the second of such academic years or terms, except that if benefits
are denied to the individual under this subsection (j) and the individual
was not offered an opportunity to perform such services for the educa-
tional institution for the second of such academic years or terms, such
individual shall be entitled to a retroactive payment of benefits for each
week for which the individual filed a timely claim for benefits and for
which benefits were denied solely by reason of this subsection (j).

      (k) For any week of unemployment on the basis of service in any
capacity for an educational institution as defined in subsection (v) of
K.S.A. 44-703 and amendments thereto, if such week begins during an
established and customary vacation period or holiday recess, if the indi-
vidual performs services in the period immediately before such vacation
period or holiday recess and there is a reasonable assurance that such
individual will perform such services in the period immediately following
such vacation period or holiday recess.

      (l) For any week of unemployment on the basis of any services, sub-
stantially all of which consist of participating in sports or athletic events
or training or preparing to so participate, if such week begins during the
period between two successive sport seasons or similar period if such
individual performed services in the first of such seasons or similar per-
iods and there is a reasonable assurance that such individual will perform
such services in the later of such seasons or similar periods.

      (m) For any week on the basis of services performed by an alien
unless such alien is an individual who was lawfully admitted for perma-
nent residence at the time such services were performed, was lawfully
present for purposes of performing such services, or was permanently
residing in the United States under color of law at the time such services
were performed, including an alien who was lawfully present in the
United States as a result of the application of the provisions of section
212(d)(5) of the federal immigration and nationality act. Any data or in-
formation required of individuals applying for benefits to determine
whether benefits are not payable to them because of their alien status
shall be uniformly required from all applicants for benefits. In the case
of an individual whose application for benefits would otherwise be ap-
proved, no determination that benefits to such individual are not payable
because of such individual's alien status shall be made except upon a
preponderance of the evidence.

      (n) For any week in which an individual is receiving a governmental
or other pension, retirement or retired pay, annuity or other similar pe-
riodic payment under a plan maintained by a base period employer and
to which the entire contributions were provided by such employer, except
that: (1) If the entire contributions to such plan were provided by the
base period employer but such individual's weekly benefit amount ex-
ceeds such governmental or other pension, retirement or retired pay,
annuity or other similar periodic payment attributable to such week, the
weekly benefit amount payable to the individual shall be reduced (but
not below zero) by an amount equal to the amount of such pension,
retirement or retired pay, annuity or other similar periodic payment
which is attributable to such week; or (2) if only a portion of contributions
to such plan were provided by the base period employer, the weekly
benefit amount payable to such individual for such week shall be reduced
(but not below zero) by the prorated weekly amount of the pension, re-
tirement or retired pay, annuity or other similar periodic payment after
deduction of that portion of the pension, retirement or retired pay, an-
nuity or other similar periodic payment that is directly attributable to the
percentage of the contributions made to the plan by such individual; or
(3) if the entire contributions to the plan were provided by such individ-
ual, or by the individual and an employer (or any person or organization)
who is not a base period employer, no reduction in the weekly benefit
amount payable to the individual for such week shall be made under this
subsection (n); or (4) whatever portion of contributions to such plan were
provided by the base period employer, if the services performed for the
employer by such individual during the base period, or remuneration
received for the services, did not affect the individual's eligibility for, or
increased the amount of, such pension, retirement or retired pay, annuity
or other similar periodic payment, no reduction in the weekly benefit
amount payable to the individual for such week shall be made under this
subsection (n). The conditions specified in clause (4) of this subsection
(n) shall not apply to payments made under the social security act or the
railroad retirement act of 1974, or the corresponding provisions of prior
law. Payments made under these acts shall be treated as otherwise pro-
vided in this subsection (n). If the reduced weekly benefit amount is not
a multiple of $1, it shall be reduced to the next lower multiple of $1.

      (o) For any week of unemployment on the basis of services per-
formed in any capacity and under any of the circumstances described in
subsection (i), (j) or (k) which an individual performed in an educational
institution while in the employ of an educational service agency. For the
purposes of this subsection (o), the term ``educational service agency''
means a governmental agency or entity which is established and operated
exclusively for the purpose of providing such services to one or more
educational institutions.

      (p) For any week of unemployment on the basis of service as a school
bus or other motor vehicle driver employed by a private contractor to
transport pupils, students and school personnel to or from school-related
functions or activities for an educational institution, as defined in subsec-
tion (v) of K.S.A. 44-703 and amendments thereto, if such week begins
during the period between two successive academic years or during a
similar period between two regular terms, whether or not successive, if
the individual has a contract or contracts, or a reasonable assurance
thereof, to perform services in any such capacity with a private contractor
for any educational institution for both such academic years or both such
terms. An individual shall not be disqualified for benefits as provided in
this subsection (p) for any week of unemployment on the basis of service
as a bus or other motor vehicle driver employed by a private contractor
to transport persons to or from nonschool-related functions or activities.

      (q) For any week of unemployment on the basis of services per-
formed by the individual in any capacity and under any of the circum-
stances described in subsection (i), (j), (k) or (o) which are provided to
or on behalf of an educational institution, as defined in subsection (v) of
K.S.A. 44-703 and amendments thereto, while the individual is in the
employ of an employer which is a governmental entity, Indian tribe or
any employer described in section 501(c)(3) of the federal internal rev-
enue code of 1986 which is exempt from income under section 501(a) of
the code.

      (r) For any week in which an individual is registered at and attending
an established school, training facility or other educational institution, or
is on vacation during or between two successive academic years or terms.
An individual shall not be disqualified for benefits as provided in this
subsection (r) provided:

      (1) The individual was engaged in full-time employment concurrent
with the individual's school attendance; or

      (2) the individual is attending approved training as defined in sub-
section (s) of K.S.A. 44-703 and amendments thereto; or

      (3) the individual is attending evening, weekend or limited day time
classes, which would not affect availability for work, and is otherwise
eligible under subsection (c) of K.S.A. 44-705 and amendments thereto.

      (s) For any week with respect to which an individual is receiving or
has received remuneration in the form of a back pay award or settlement.
The remuneration shall be allocated to the week or weeks in the manner
as specified in the award or agreement, or in the absence of such speci-
ficity in the award or agreement, such remuneration shall be allocated to
the week or weeks in which such remuneration, in the judgment of the
secretary, would have been paid.

      (1) For any such weeks that an individual receives remuneration in
the form of a back pay award or settlement, an overpayment will be
established in the amount of unemployment benefits paid and shall be
collected from the claimant.

      (2) If an employer chooses to withhold from a back pay award or
settlement, amounts paid to a claimant while they claimed unemployment
benefits, such employer shall pay the department the amount withheld.
With respect to such amount, the secretary shall have available all of the
collection remedies authorized or provided in section K.S.A. 44-717, and
amendments thereto.

      Sec.  3. K.S.A. 44-710 is hereby amended to read as follows: 44-710.
(a) Payment. Contributions shall accrue and become payable by each
contributing employer for each calendar year in which the contributing
employer is subject to the employment security law with respect to wages
paid for employment. Such contributions shall become due and be paid
by each contributing employer to the secretary for the employment se-
curity fund in accordance with such rules and regulations as the secretary
may adopt and shall not be deducted, in whole or in part, from the wages
of individuals in such employer's employ. In the payment of any contri-
butions, a fractional part of $.01 shall be disregarded unless it amounts
to $.005 or more, in which case it shall be increased to $.01. Should
contributions for any calendar quarter be less than $1, no payment shall
be required.

      (b) Rates and base of contributions. (1) Except as provided in para-
graph (2) of this subsection, each contributing employer shall pay contri-
butions on wages paid by the contributing employer during each calendar
year with respect to employment as provided in K.S.A. 44-710a and
amendments thereto.

      (2)  (A) If the congress of the United States either amends or repeals
the Wagner-Peyser act, the federal unemployment tax act, the federal
social security act, or subtitle C of chapter 23 of the federal internal
revenue code of 1986, or any act or acts supplemental to or in lieu thereof,
or any part or parts of any such law, or if any such law, or any part or
parts thereof, are held invalid with the effect that appropriations of funds
by congress and grants thereof to the state of Kansas for the payment of
costs of administration of the employment security law are no longer
available for such purposes, or (B) if employers in Kansas subject to the
payment of tax under the federal unemployment tax act are granted full
credit against such tax for contributions or taxes paid to the secretary of
human resources, then, and in either such case, beginning with the year
in which the unavailability of federal appropriations and grants for such
purpose occurs or in which such change in liability for payment of such
federal tax occurs and for each year thereafter, the rate of contributions
of each contributing employer shall be equal to the total of .5% and the
rate of contributions as determined for such contributing employer under
K.S.A. 44-710a and amendments thereto. The amount of contributions
which each contributing employer becomes liable to pay under this par-
agraph (2) over the amount of contributions which such contributing em-
ployer would be otherwise liable to pay shall be credited to the employ-
ment security administration fund to be disbursed and paid out under the
same conditions and for the same purposes as other moneys are author-
ized to be paid from the employment security administration fund, except
that, if the secretary determines that as of the first day of January of any
year there is an excess in the employment security administration fund
over the amount required to be disbursed during such year, an amount
equal to such excess as determined by the secretary shall be transferred
to the employment security fund.

      (c) Charging of benefit payments. (1) The secretary shall maintain a
separate account for each contributing employer, and shall credit the
contributing employer's account with all the contributions paid on the
contributing employer's own behalf. Nothing in the employment security
law shall be construed to grant any employer or individuals in such em-
ployer's service prior claims or rights to the amounts paid by such em-
ployer into the employment security fund either on such employer's own
behalf or on behalf of such individuals. Benefits paid shall be charged
against the accounts of each base period employer in the proportion that
the base period wages paid to an eligible individual by each such employer
bears to the total wages in the base period. Benefits shall be charged to
contributing employers' accounts and rated governmental employers' ac-
counts upon the basis of benefits paid during each twelve-month period
ending on the computation date.

      (2)  (A) Benefits paid in benefit years established by valid new claims
shall not be charged to the account of a contributing employer or rated
governmental employer who is a base period employer if the examiner
finds that claimant was separated from the claimant's most recent em-
ployment with such employer under any of the following conditions: (i)
Discharged for misconduct or gross misconduct connected with the in-
dividual's work; or (ii) leaving work voluntarily without good cause attrib-
utable to the claimant's work or the employer.

      (B) Where base period wage credits of a contributing employer or
rated governmental employer represent part-time employment and the
claimant continues in that part-time employment with that employer dur-
ing the period for which benefits are paid, then that employer's account
shall not be charged with any part of the benefits paid if the employer
provides the secretary with information as required by rules and regula-
tions. For the purposes of this subsection (c)(2)(B), ``part-time employ-
ment'' means any employment when an individual works concurrently for
two or more employers and also works less than full-time for at least one
of those employers because the individual's services are not required for
the customary, scheduled full-time hours prevailing at the work place or
the individual does not customarily work the regularly scheduled full-time
hours due to personal choice or circumstances.

      (C) No contributing employer or rated governmental employer's ac-
count shall be charged with any extended benefits paid in accordance
with the employment security law, except for weeks of unemployment
beginning after December 31, 1978, all contributing governmental em-
ployers and governmental rated employers shall be charged an amount
equal to all extended benefits paid.

      (D) No contributing employer or rated governmental employer's ac-
count will be charged for benefits paid a claimant while pursuing an ap-
proved training course as defined in subsection (s) of K.S.A. 44-703 and
amendments thereto.

      (E) No contributing employer or rated governmental employer's ac-
count shall be charged with respect to the benefits paid to any individual
whose base period wages include wages for services not covered by the
employment security law prior to January 1, 1978, to the extent that the
employment security fund is reimbursed for such benefits pursuant to
section 121 of public law 94-566 (90 Stat. 2673).

      (F) With respect to weeks of unemployment beginning after Decem-
ber 31, 1977, wages for insured work shall include wages paid for previ-
ously uncovered services. For the purposes of this subsection (c)(2)(F),
the term ``previously uncovered services'' means services which were not
covered employment, at any time during the one-year period ending De-
cember 31, 1975, except to the extent that assistance under title II of the
federal emergency jobs and unemployment assistance act of 1974 was
paid on the basis of such services, and which:

      (i) Are agricultural labor as defined in subsection (w) of K.S.A. 44-
703 and amendments thereto or domestic service as defined in subsection
(aa) of K.S.A. 44-703 and amendments thereto, or

      (ii) are services performed by an employee of this state or a political
subdivision thereof, as provided in subsection (i)(3)(E) of K.S.A. 44-703
and amendments thereto, or

      (iii) are services performed by an employee of a nonprofit educational
institution which is not an institution of higher education.

      (3) The examiner shall notify any base period employer whose ac-
count will be charged with benefits paid following the filing of a valid
new claim and a determination by the examiner based on all information
relating to the claim contained in the records of the division of employ-
ment. Such notice shall become final and benefits charged to the base
period employer's account in accordance with the claim unless within 10
calendar days from the date the notice was sent, the base period employer
requests in writing that the examiner reconsider the determination and
furnishes any required information in accordance with the secretary's
rules and regulations. In a similar manner, a notice of an additional claim
followed by the first payment of benefits with respect to the benefit year,
filed by an individual during a benefit year after a period in such year
during which such individual was employed, shall be given to any base
period employer of the individual who has requested such a notice within
10 calendar days from the date the notice of the valid new claim was sent
to such base period employer. For purposes of this subsection (c)(3), if
the required information is not submitted or postmarked within a re-
sponse time limit of 10 days after the base period employer notice was
sent, the base period employer shall be deemed to have waived its stand-
ing as a party to the proceedings arising from the claim and shall be barred
from protesting any subsequent decisions about the claim by the secre-
tary, a referee, the board of review or any court, except that the base
period employer's response time limit may be waived or extended by the
examiner or upon appeal, if timely response was impossible due to ex-
cusable neglect. The examiner shall notify the employer of the reconsid-
ered determination which shall be subject to appeal, or further reconsid-
eration, in accordance with the provisions of K.S.A. 44-709 and
amendments thereto.

      (4) Time, computation and extension. In computing the period of
time for a base period employer response or appeals under this section
from the examiner's or the special examiner's determination or from the
referee's decision, the day of the act, event or default from which the
designated period of time begins to run shall not be included. The last
day of the period shall be included unless it is a Saturday, Sunday or legal
holiday, in which event the period runs until the end of the next day
which is not a Saturday, Sunday or legal holiday.

      (d) Pooled fund. All contributions and payments in lieu of contribu-
tions and benefit cost payments to the employment security fund shall
be pooled and available to pay benefits to any individual entitled thereto
under the employment security law, regardless of the source of such con-
tributions or payments in lieu of contributions or benefit cost payments.

      (e) Election to become reimbursing employer; payment in lieu of con-
tributions. (1) Any governmental entity, Indian tribes or tribal units, (sub-
divisions, subsidiaries or business enterprises wholly owned by such In-
dian tribes), for which services are performed as described in subsection
(i)(3)(E) of K.S.A. 44-703 and amendments thereto or any nonprofit or-
ganization or group of nonprofit organizations described in section
501(c)(3) of the federal internal revenue code of 1986 which is exempt
from income tax under section 501(a) of such code, that becomes subject
to the employment security law may elect to become a reimbursing em-
ployer under this subsection (e)(1) and agree to pay the secretary for the
employment security fund an amount equal to the amount of regular
benefits and 1/2 of the extended benefits paid that are attributable to
service in the employ of such reimbursing employer, except that each
reimbursing governmental employer, Indian tribes or tribal units shall
pay an amount equal to the amount of regular benefits and extended
benefits paid for weeks of unemployment beginning after December 31,
1978, for governmental employers and December 21, 2000, for Indian
tribes or tribal units to individuals for weeks of unemployment which
begin during the effective period of such election.

      (A) Any employer identified in this subsection (e)(1) may elect to
become a reimbursing employer for a period encompassing not less than
four complete calendar years if such employer files with the secretary a
written notice of such election within the thirty-day period immediately
following January 1 of any calendar year or within the thirty-day period
immediately following the date on which a determination of subjectivity
to the employment security law is issued, whichever occurs later.

      (B) Any employer which makes an election to become a reimbursing
employer in accordance with subparagraph (A) of this subsection (e)(1)
will continue to be liable for payments in lieu of contributions until such
employer files with the secretary a written notice terminating its election
not later than 30 days prior to the beginning of the calendar year for
which such termination shall first be effective.

      (C) Any employer identified in this subsection (e)(1) which has re-
mained a contributing employer and has been paying contributions under
the employment security law for a period subsequent to January 1, 1972,
may change to a reimbursing employer by filing with the secretary not
later than 30 days prior to the beginning of any calendar year a written
notice of election to become a reimbursing employer. Such election shall
not be terminable by the employer for four complete calendar years.

      (D) The secretary may for good cause extend the period within which
a notice of election, or a notice of termination, must be filed and may
permit an election to be retroactive but not any earlier than with respect
to benefits paid after January 1 of the year such election is received.

      (E) The secretary, in accordance with such rules and regulations as
the secretary may adopt, shall notify each employer identified in subsec-
tion (e)(1) of any determination which the secretary may make of its status
as an employer and of the effective date of any election which it makes
to become a reimbursing employer and of any termination of such elec-
tion. Such determinations shall be subject to reconsideration, appeal and
review in accordance with the provisions of K.S.A. 44-710b and amend-
ments thereto.

      (2) Reimbursement reports and payments. Payments in lieu of con-
tributions shall be made in accordance with the provisions of paragraph
(A) of this subsection (e)(2) by all reimbursing employers except the state
of Kansas. Each reimbursing employer shall report total wages paid dur-
ing each calendar quarter by filing quarterly wage reports with the sec-
retary which shall be filed by the last day of the month following the close
of each calendar quarter. Wage reports are deemed filed as of the date
they are placed in the United States mail.

      (A) At the end of each calendar quarter, or at the end of any other
period as determined by the secretary, the secretary shall bill each re-
imbursing employer, except the state of Kansas, (i) an amount to be paid
which is equal to the full amount of regular benefits plus 1/2 of the amount
of extended benefits paid during such quarter or other prescribed period
that is attributable to service in the employ of such reimbursing employer;
and (ii) for weeks of unemployment beginning after December 31, 1978,
each reimbursing governmental employer and December 21, 2000, for
Indian tribes or tribal units shall be certified an amount to be paid which
is equal to the full amount of regular benefits and extended benefits paid
during such quarter or other prescribed period that is attributable to
service in the employ of such reimbursing governmental employer.

      (B) Payment of any bill rendered under paragraph (A) of this sub-
section (e)(2) shall be made not later than 30 days after such bill was
mailed to the last known address of the reimbursing employer, or oth-
erwise was delivered to such reimbursing employer, unless there has been
an application for review and redetermination in accordance with para-
graph (D) of this subsection (e)(2).

      (C) Payments made by any reimbursing employer under the provi-
sions of this subsection (e)(2) shall not be deducted or deductible, in
whole or in part, from the remuneration of individuals in the employ of
such employer.

      (D) The amount due specified in any bill from the secretary shall be
conclusive on the reimbursing employer, unless, not later than 15 days
after the bill was mailed to the last known address of such employer, or
was otherwise delivered to such employer, the reimbursing employer files
an application for redetermination in accordance with K.S.A. 44-710b and
amendments thereto.

      (E) Past due payments of amounts certified by the secretary under
this section shall be subject to the same interest, penalties and actions
required by K.S.A. 44-717 and amendments thereto. (1) If any nonprofit
organization or group of nonprofit organizations described in section
501(c)(3) of the federal internal revenue code of 1986 or governmental
reimbursing employer is delinquent in making payments of amounts cer-
tified by the secretary under this section, the secretary may terminate
such employer's election to make payments in lieu of contributions as of
the beginning of the next calendar year and such termination shall be
effective for such next calendar year and the calendar year thereafter so
that the termination is effective for two complete calendar years.
(2) Failure of the Indian tribe or tribal unit to make required payments,
including assessment of interest and penalty within 90 days of receipt of
the bill will cause the Indian tribe to lose the option to make payments in
lieu of contributions as described pursuant to paragraph (e)(1) for the
following tax year unless payment in full is received before contribution
rates for the next tax year are calculated. (3) Any Indian tribe that loses
the option to make payments in lieu of contributions due to late payment
or nonpayment, as described in paragraph (2), shall have such option
reinstated, if after a period of one year, all contributions have been made
on time and no contributions, payments in lieu of contributions for ben-
efits paid, penalties or interest remain outstanding.

      (F) Failure of the Indian tribe or any tribal unit thereof to make
required payments, including assessments of interest and penalties, after
all collection activities deemed necessary by the secretary have been ex-
hausted, will cause services performed by such tribe to not be treated as
employment for purposes of subsection (i)(3)(E) of K.S.A. 44-703 and
amendments thereto. If an Indian tribe fails to make payments required
under this section, including assessments of interest and penalties, within
90 days of a final notice of delinquency, the secretary shall immediately
notify the United States internal revenue service and the United States
department of labor. The secretary may determine that any Indian tribe
that loses coverage pursuant to this paragraph may have services per-
formed on behalf of such tribe again deemed ``employment'' if all contri-
butions, payments in lieu of contributions, penalties and interest have
been paid.

      (F) (G) In the discretion of the secretary, any employer who elects
to become liable for payments in lieu of contributions and any nonprofit
organization or group of nonprofit organizations described in section 501
(c)(3) of the federal internal revenue code of 1986 or governmental re-
imbursing employer or Indian tribe or tribal unit who is delinquent in
filing reports or in making payments of amounts certified by the secretary
under this section shall be required within 60 days after the effective date
of such election, in the case of an eligible employer so electing, or after
the date of notification to the delinquent employer under this subsection
(e)(2)(F) (e)(2)(G), in the case of a delinquent employer, to execute and
file with the secretary a surety bond, except that the employer may elect,
in lieu of a surety bond, to deposit with the secretary money or securities
as approved by the secretary or to purchase and deliver to an escrow
agent a certificate of deposit to guarantee payment. The amount of the
bond or, deposit or escrow agreement required by this subsection
(e)(2)(F) (e)(2)(G) shall not exceed 5.4% of the organization's taxable
wages paid for employment by the eligible employer during the four
calendar quarters immediately preceding the effective date of the election
or the date of notification, in the case of a delinquent employer. If the
employer did not pay wages in each of such four calendar quarters, the
amount of the bond or deposit shall be as determined by the secretary.
Upon the failure of an employer to comply with this subsection (e)(2)(F)
(e)(2)(G) within the time limits imposed or to maintain the required bond
or deposit, the secretary may terminate the election of such eligible em-
ployer or delinquent employer, as the case may be, to make payments in
lieu of contributions, and such termination shall be effective for the cur-
rent and next calendar year.

      (G) (H) The state of Kansas shall make reimbursement payments
quarterly at a fiscal year rate which shall be based upon: (i) The available
balance in the state's reimbursing account as of December 31 of each
calendar year; (ii) the historical unemployment experience of all covered
state agencies during prior years; (iii) the estimate of total covered wages
to be paid during the ensuing calendar year; (iv) the applicable fiscal year
rate of the claims processing and auditing fee under K.S.A. 75-3798 and
amendments thereto; and (v) actuarial and other information furnished
to the secretary by the secretary of administration. In accordance with
K.S.A. 75-3798 and amendments thereto, the claims processing and au-
diting fees charged to state agencies shall be deducted from the amounts
collected for the reimbursement payments under this paragraph (G) (H)
prior to making the quarterly reimbursement payments for the state of
Kansas. The fiscal year rate shall be expressed as a percentage of covered
total wages and shall be the same for all covered state agencies. The fiscal
year rate for each fiscal year will be certified in writing by the secretary
to the secretary of administration on July 15 of each year and such cer-
tified rate shall become effective on the July 1 immediately following the
date of certification. A detailed listing of benefit charges applicable to the
state's reimbursing account shall be furnished quarterly by the secretary
to the secretary of administration and the total amount of charges de-
ducted from previous reimbursing payments made by the state. On Jan-
uary 1 of each year, if it is determined that benefit charges exceed the
amount of prior reimbursing payments, an upward adjustment shall be
made therefor in the fiscal year rate which will be certified on the ensuing
July 15. If total payments exceed benefit charges, all or part of the excess
may be refunded, at the discretion of the secretary, from the fund or
retained in the fund as part of the payments which may be required for
the next fiscal year.

      (3) Allocation of benefit costs. The reimbursing account of each re-
imbursing employer shall be charged the full amount of regular benefits
and 1/2 of the amount of extended benefits paid except that each reim-
bursing governmental employer's account shall be charged the full
amount of regular benefits and extended benefits paid for weeks of un-
employment beginning after December 31, 1978, to individuals whose
entire base period wage credits are from such employer. When benefits
received by an individual are based upon base period wage credits from
more than one employer then the reimbursing employer's or reimbursing
governmental employer's account shall be charged in the same ratio as
base period wage credits from such employer bear to the individual's total
base period wage credits. Notwithstanding any other provision of the
employment security law, no reimbursing employer's or reimbursing gov-
ernmental employer's account shall be charged for payments of extended
benefits which are wholly reimbursed to the state by the federal govern-
ment.

      (A) Proportionate allocation (when fewer than all reimbursing base
period employers are liable). If benefits paid to an individual are based
on wages paid by one or more reimbursing employers and on wages paid
by one or more contributing employers or rated governmental employers,
the amount of benefits payable by each reimbursing employer shall be
an amount which bears the same ratio to the total benefits paid to the
individual as the total base period wages paid to the individual by such
employer bears to the total base period wages paid to the individual by
all of such individual's base period employers.

      (B) Proportionate allocation (when all base period employers are re-
imbursing employers). If benefits paid to an individual are based on wages
paid by two or more reimbursing employers, the amount of benefits pay-
able by each such employer shall be an amount which bears the same
ratio to the total benefits paid to the individual as the total base period
wages paid to the individual by such employer bear to the total base
period wages paid to the individual by all of such individual's base period
employers.

      (4) Group accounts. Two or more reimbursing employers may file a
joint application to the secretary for the establishment of a group account
for the purpose of sharing the cost of benefits paid that are attributable
to service in the employment of such reimbursing employers. Each such
application shall identify and authorize a group representative to act as
the group's agent for the purposes of this subsection (e)(4). Upon ap-
proval of the application, the secretary shall establish a group account for
such employers effective as of the beginning of the calendar quarter in
which the secretary receives the application and shall notify the group's
representative of the effective date of the account. Such account shall
remain in effect for not less than four years and thereafter such account
shall remain in effect until terminated at the discretion of the secretary
or upon application by the group. Upon establishment of the account,
each member of the group shall be liable for payments in lieu of contri-
butions with respect to each calendar quarter in the amount that bears
the same ratio to the total benefits paid in such quarter that are attrib-
utable to service performed in the employ of all members of the group
as the total wages paid for service in employment by such member in
such quarter bear to the total wages paid during such quarter for service
performed in the employ of all members of the group. The secretary shall
adopt such rules and regulations as the secretary deems necessary with
respect to applications for establishment, maintenance and termination
of group accounts that are authorized by this subsection (e)(4), for ad-
dition of new members to, and withdrawal of active members from such
accounts, and for the determination of the amounts that are payable un-
der this subsection (e)(4) by members of the group and the time and
manner of such payments.

      Sec.  4. K.S.A. 44-710a is hereby amended to read as follows: 44-
710a. (a) Classification of employers by the secretary. The term ``em-
ployer'' as used in this section refers to contributing employers. The sec-
retary shall classify employers in accordance with their actual experience
in the payment of contributions on their own behalf and with respect to
benefits charged against their accounts with a view of fixing such contri-
bution rates as will reflect such experience. If, as of the date such clas-
sification of employers is made, the secretary finds that any employing
unit has failed to file any report required in connection therewith, or has
filed a report which the secretary finds incorrect or insufficient, the sec-
retary shall make an estimate of the information required from such em-
ploying unit on the basis of the best evidence reasonably available to the
secretary at the time, and notify the employing unit thereof by mail ad-
dressed to its last known address. Unless such employing unit shall file
the report or a corrected or sufficient report as the case may be, within
15 days after the mailing of such notice, the secretary shall compute such
employing unit's rate of contributions on the basis of such estimates, and
the rate as so determined shall be subject to increase but not to reduction
on the basis of subsequently ascertained information. The secretary shall
determine the contribution rate of each employer in accordance with the
requirements of this section.

      (1) New employers. (A) No employer will be eligible for a rate com-
putation until there have been 24 consecutive calendar months immedi-
ately preceding the computation date throughout which benefits could
have been charged against such employer's account.

      (B)  (i) Employers who are not eligible for a rate computation shall
pay contributions at an assigned rate equal to the sum of 1% plus the
greater of the average rate assigned in the preceding calendar year to all
employers in such industry division sector or the average rate assigned to
all covered employers during the preceding calendar year, except that in
no instance shall any such assigned rate be less than 2%. Employers en-
gaged in more than one type of industrial activity shall be classified by
principal activity. All rates assigned will remain in effect for a complete
calendar year. If the sale or acquisition of a new establishment would
require reclassification of the employer to a different industry division
sector, the employer would be promptly notified, and the contribution
rate applicable to the new industry division sector would become effective
the following January 1. For rate years 1995, 1996, 1997, 1998 and 1999
all employers who are not eligible for rate computation shall pay contri-
butions at the rate of 1%. However, for rate year 1996, 1997, 1998 and
1999 the 1% contribution rate for all employers who are not eligible for
a rate computation shall not be effective if the reserve fund ratio in col-
umn A of schedule III as determined by this section is less than 1.75%.

      (ii) For purposes of this subsection (a), employers shall be classified
by industrial activity in accordance with standard procedures as set forth
in rules and regulations adopted by the secretary.

      (C) ``Computation date'' means June 30 of each calendar year with
respect to rates of contribution applicable to the calendar year beginning
with the following January 1. In arriving at contribution rates for each
calendar year, contributions paid on or before July 31 following the com-
putation date for employment occurring on or prior to the computation
date shall be considered for each contributing employer who has been
subject to this act for a sufficient period of time to have such employer's
rate computed under this subsection (a).

      (2) Eligible employers. (A) A reserve ratio shall be computed for each
eligible employer by the following method: Total benefits charged to the
employer's account for all past years shall be deducted from all contri-
butions paid by such employer for all such years. The balance, positive
or negative, shall be divided by the employer's average annual payroll,
and the result shall constitute the employer reserve ratio.

      (B) Negative account balance employers as defined in subsection (d)
shall pay contributions at the rate of 5.4% for each calendar year. How-
ever, for rate years 1996, 1997, 1998 and 1999 all negative account bal-
ance eligible employers will be assigned rates and pay contributions in
accordance with the following schedule.

SCHEDULE IIA  

Rate Group

Reserve Ratio

Effective Rates

Negative Eligible Accounts

1  Less than	0.00 but greater than -0.40	1.1
2	-0.40 but greater than -0.80	1.2
3	-0.80 but greater than -1.20	1.3
4	-1.20 but greater than -1.60	1.4
5	-1.60 but greater than -2.00	1.5
6	-2.00 but greater than -2.40	1.6
7	-2.40 but greater than -2.80	1.7
8	-2.80 but greater than -3.20	1.8
9	-3.20 but greater than -3.60	1.9
10	-3.60 but greater than -4.00	2.0
11	-4.00 but greater than -4.40	2.1
12	-4.40 but greater than -4.80	2.2
13	-4.80 but greater than -5.20	2.3
14	-5.20 but greater than -5.60	2.4
15	-5.60 but greater than -6.00	2.5
16	-6.00 but greater than -6.40	2.6
17	-6.40 but greater than -6.80	2.7
18	-6.80 but greater than -7.20	2.8
19	-7.20 but greater than -7.60	2.9
20	-7.60 but greater than -8.00	3.0
21	-8.00 but greater than -8.40	3.1
22	-8.40 but greater than -8.80	3.2
23	-8.80 but greater than -9.20	3.3
24	-9.20 but greater than -9.60	3.4
25	-9.60 but greater than -10.00	3.5
26	-10.00 but greater than -10.40	3.6
27	-10.40 but greater than -10.80	3.7
28	-10.80 but greater than -11.20	3.8
29	-11.20 but greater than -11.60	3.9
30	-11.60 but greater than -12.00	4.0
31	-12.00 but greater than -12.40	4.1
32	-12.40 but greater than -12.80	4.2
33	-12.80 but greater than -13.20	4.3
34	-13.20 but greater than -13.60	4.4
35	-13.60 but greater than -14.00	4.5
36	-14.00 but greater than -14.40	4.6
37	-14.40 but greater than -14.80	4.7
38	-14.80 but greater than -15.20	4.8
39	-15.20 but greater than -15.60	4.9
40	-15.60 but greater than -16.00	5.0
41	-16.00 but greater than -16.40	5.1
42	-16.40 but greater than -16.80	5.2
43	-16.80 but greater than -17.20	5.3
44	-17.20 but greater than -17.60	5.4
45	-17.60 but greater than -18.00	5.5
46	-18.00 but greater than -18.40	5.6
47	-18.40 but greater than -18.80	5.7
48	-18.80 but greater than -19.20	5.8
49	-19.20 but greater than -19.60	5.9
50	-19.60 and less	6.0

      (C) Eligible employers, other than negative account balance employ-
ers, who do not meet the average annual payroll requirements as stated
in subsection (a)(2) of K.S.A. 44-703 and amendments thereto, will be
issued the maximum rate indicated in subsection (a)(3)(C) of this section
until such employer establishes a new period of 24 consecutive calendar
months immediately preceding the computation date throughout which
benefits could have been charged against such employer's account by
resuming the payment of wages. Contribution rates effective for each
calendar year thereafter shall be determined as prescribed below.

      (D) As of each computation date, the total of the taxable wages paid
during the twelve-month period prior to the computation date by all em-
ployers eligible for rate computation, except negative account balance
employers, shall be divided into 51 approximately equal parts designated
in column A of schedule I as ``rate groups,'' except, with regard to a year
in which the taxable wage base changes. The taxable wages used in the
calculation for such a year and the following year shall be an estimate of
what the taxable wages would have been if the new taxable wage base
had been in effect during the entire twelve-month period prior to the
computation date. The lowest numbered of such rate groups shall consist
of the employers with the most favorable reserve ratios, as defined in this
section, whose combined taxable wages paid are less than 1.96% of all
taxable wages paid by all eligible employers. Each succeeding higher
numbered rate group shall consist of employers with reserve ratios that
are less favorable than those of employers in the preceding lower num-
bered rate groups and whose taxable wages when combined with the
taxable wages of employers in all lower numbered rate groups equal the
appropriate percentage of total taxable wages designated in column B of
schedule I. Each eligible employer, other than a negative account balance
employer, shall be assigned an experience factor designated under col-
umn C of schedule I in accordance with the rate group to which the
employer is assigned on the basis of the employer's reserve ratio and
taxable payroll. If an employer's taxable payroll falls into more than one
rate group the employer shall be assigned the experience factor of the
lower numbered rate group. If one or more employers have reserve ratios
identical to that of the last employer included in the next lower numbered
rate group, all such employers shall be assigned the experience factor
designated to such last employer, notwithstanding the position of their
taxable payroll in column B of schedule I.

SCHEDULE I--Eligible Employers

Column A	Column B	Column C
Rate	Cumulative	Experience factor
group	taxable payroll	(Ratio to total wages)
1	Less than 1.96%	.025%
2	1.96% but less than 3.92	.04
3	3.92 but less than 5.88	.08
4	5.88 but less than 7.84	.12
5	7.84 but less than 9.80	.16
6	9.80 but less than 11.76	.20
7	11.76 but less than 13.72	.24
8	13.72 but less than 15.68	.28
9	15.68 but less than 17.64	.32
10	17.64 but less than 19.60	.36
11	19.60 but less than 21.56	.40
12	21.56 but less than 23.52	.44
13	23.52 but less than 25.48	.48
14	25.48 but less than 27.44	.52
15	27.44 but less than 29.40	.56
16	29.40 but less than 31.36	.60
17	31.36 but less than 33.32	.64
18	33.32 but less than 35.28	.68
19	35.28 but less than 37.24	.72
20	37.24 but less than 39.20	.76
21	39.20 but less than 41.16	.80
22	41.16 but less than 43.12	.84
23	43.12 but less than 45.08	.88
24	45.08 but less than 47.04	.92
25	47.04 but less than 49.00	.96
26	49.00 but less than 50.96	1.00
27	50.96 but less than 52.92	1.04
28	52.92 but less than 54.88	1.08
29	54.88 but less than 56.84	1.12
30	56.84 but less than 58.80	1.16
31	58.80 but less than 60.76	1.20
32	60.76 but less than 62.72	1.24
33	62.72 but less than 64.68	1.28
34	64.68 but less than 66.64	1.32
35	66.64 but less than 68.60	1.36
36	68.60 but less than 70.56	1.40
37	70.56 but less than 72.52	1.44
38	72.52 but less than 74.48	1.48
39	74.48 but less than 76.44	1.52
40	76.44 but less than 78.40	1.56
41	78.40 but less than 80.36	1.60
42	80.36 but less than 82.32	1.64
43	82.32 but less than 84.28	1.68
44	84.28 but less than 86.24	1.72
45	86.24 but less than 88.20	1.76
46	88.20 but less than 90.16	1.80
47	90.16 but less than 92.12	1.84
48	92.12 but less than 94.08	1.88
49	94.08 but less than 96.04	1.92
50	96.04 but less than 98.00	1.96
51	98.00 and over	2.00

      (E) Negative account balance employers shall, in addition to paying
the rate provided for in subsection (a)(2)(B) of this section, except for
rate years 1996, 1997, 1998 and 1999, pay a surcharge based on the size
of the employer's negative reserve ratio, the calculation which is provided
for in subsection (a)(2) of this section. The amount of the surcharge shall
be determined from column B of schedule II of this section. Each neg-
ative account balance employer who does not satisfy the requirements to
have an average annual payroll, as defined by subsection (a)(2) of K.S.A.
44-703 and amendments thereto, shall be assigned a surcharge of 2%.
Contribution payments made pursuant to this subsection (a)(2)(E) shall
be credited to the appropriate account of such negative account balance
employer.

SCHEDULE II--Surcharge on Negative Accounts Column A                                                                                           Column B

Negative Reserve Ratio                                   Surcharge as a percent

of taxable wages

Less than 2.0%	0.20%
2.0% but less than 4.0	.40
4.0 but less than 6.0	.60
6.0 but less than 8.0	.80
8.0 but less than 10.0	1.00
10.0 but less than 12.0	1.20
12.0 but less than 14.0	1.40
14.0 but less than 16.0	1.60
16.0 but less than 18.0	1.80
18.0 and over	2.00

      (3) Planned yield. (A) For rate year 1995, and all years thereafter, the
average required yield shall be determined from schedule III of this sec-
tion, and the planned yield on total wages in column B of schedule III
shall be determined by the reserve fund ratio in column A of schedule
III. The reserve fund ratio shall be determined by dividing total assets in
the employment security fund provided for in subsection (a) of K.S.A.
44-712 and amendments thereto, excluding all moneys credited to the
account of this state pursuant to section 903 of the federal social security
act, as amended, which have been appropriated by the state legislature,
whether or not withdrawn from the trust fund, and excluding contribu-
tions not yet paid on July 31 by total payrolls for contributing employers
for the preceding fiscal year which ended June 30. For rate years 2000,
2001 and 2002, schedule IIIA shall apply.

SCHEDULE IIIA--Fund Control Ratios to Total Wages Column A                                                                                           Column B

Reserve Fund Ratio                                                             Planned Yield

4.250 and over	0.00
4.225 but less than 4.250	0.01
4.200 but less than 4.225	0.02
4.175 but less than 4.200	0.03
4.150 but less than 4.175	0.04
4.125 but less than 4.150	0.05
4.100 but less than 4.125	0.06
4.075 but less than 4.100	0.07
4.050 but less than 4.075	0.08
4.025 but less than 4.050	0.09
4.000 but less than 4.025	0.10
3.950 but less than 4.000	0.11
3.900 but less than 3.950	0.12
3.850 but less than 3.900	0.13
3.800 but less than 3.850	0.14
3.750 but less than 3.800	0.15
3.700 but less than 3.750	0.16
3.650 but less than 3.700	0.17
3.600 but less than 3.650	0.18
3.550 but less than 3.600	0.19
3.500 but less than 3.550	0.20
3.450 but less than 3.500	0.21
3.400 but less than 3.450	0.22
3.350 but less than 3.400	0.23
3.300 but less than 3.350	0.24
3.250 but less than 3.300	0.25
3.200 but less than 3.250	0.26
3.150 but less than 3.200	0.27
3.100 but less than 3.150	0.28
3.050 but less than 3.100	0.29
3.000 but less than 3.050	0.30
2.950 but less than 3.000	0.31
2.900 but less than 2.950	0.32
2.850 but less than 2.900	0.33
2.800 but less than 2.850	0.34
2.750 but less than 2.800	0.35
2.700 but less than 2.750	0.36
2.650 but less than 2.700	0.37
2.600 but less than 2.650	0.38
2.550 but less than 2.600	0.39
2.500 but less than 2.550	0.40
2.450 but less than 2.500	0.41
2.400 but less than 2.450	0.42
2.350 but less than 2.400	0.43
2.300 but less than 2.350	0.44
2.250 but less than 2.300	0.45
2.200 but less than 2.250	0.46
2.150 but less than 2.200	0.47
2.100 but less than 2.150	0.48
2.050 but less than 2.100	0.49
2.000 but less than 2.050	0.50
1.975 but less than 2.000	0.51
1.950 but less than 1.975	0.52
1.925 but less than 1.950	0.53
1.900 but less than 1.925	0.54
1.875 but less than 1.900	0.55
1.850 but less than 1.875	0.56
1.825 but less than 1.850	0.57
1.800 but less than 1.825	0.58
1.775 but less than 1.800	0.59
1.750 but less than 1.775	0.60
1.725 but less than 1.750	0.61
1.700 but less than 1.725	0.62
1.675 but less than 1.700	0.63
1.650 but less than 1.675	0.64
1.625 but less than 1.650	0.65
1.600 but less than 1.625	0.66
1.575 but less than 1.600	0.67
1.550 but less than 1.575	0.68
1.525 but less than 1.550	0.69
1.500 but less than 1.525	0.70
1.475 but less than 1.500	0.71
1.450 but less than 1.475	0.72
1.425 but less than 1.450	0.73
1.400 but less than 1.425	0.74
1.375 but less than 1.400	0.75
1.350 but less than 1.375	0.76
1.325 but less than 1.350	0.77
1.300 but less than 1.325	0.78
1.275 but less than 1.300	0.79
1.250 but less than 1.275	0.80
1.225 but less than 1.250	0.81
1.200 but less than 1.225	0.82
1.175 but less than 1.200	0.83
1.150 but less than 1.175	0.84
1.125 but less than 1.150	0.85
1.100 but less than 1.125	0.86
1.075 but less than 1.100	0.87
1.050 but less than 1.075	0.88
1.025 but less than 1.050	0.89
1.000 but less than 1.025	0.90
0.900 but less than 1.000	0.91
0.800 but less than 0.900	0.92
0.700 but less than 0.800	0.93
0.600 but less than 0.700	0.94
0.500 but less than 0.600	0.95
0.400 but less than 0.500	0.96
0.300 but less than 0.400	0.97
0.200 but less than 0.300	0.98
0.100 but less than 0.200	0.99
Less than 0.100%	1.00

SCHEDULE III--Fund Control Ratios to Total Wages Column A                                                                                           Column B

Reserve Fund Ratio                                                             Planned Yield

4.500 and over	0.00
4.475 but less than 4.500	0.01
4.450 but less than 4.475	0.02
4.425 but less than 4.450	0.03
4.400 but less than 4.425	0.04
4.375 but less than 4.400	0.05
4.350 but less than 4.375	0.06
4.325 but less than 4.350	0.07
4.300 but less than 4.325	0.08
4.275 but less than 4.300	0.09
4.250 but less than 4.275	0.10
4.225 but less than 4.250	0.11
4.200 but less than 4.225	0.12
4.175 but less than 4.200	0.13
4.150 but less than 4.175	0.14
4.125 but less than 4.150	0.15
4.100 but less than 4.125	0.16
4.075 but less than 4.100	0.17
4.050 but less than 4.075	0.18
4.025 but less than 4.050	0.19
4.000 but less than 4.025	0.20
3.950 but less than 4.000	0.21
3.900 but less than 3.950	0.22
3.850 but less than 3.900	0.23
3.800 but less than 3.850	0.24
3.750 but less than 3.800	0.25
3.700 but less than 3.750	0.26
3.650 but less than 3.700	0.27
3.600 but less than 3.650	0.28
3.550 but less than 3.600	0.29
3.500 but less than 3.550	0.30
3.450 but less than 3.500	0.31
3.400 but less than 3.450	0.32
3.350 but less than 3.400	0.33
3.300 but less than 3.350	0.34
3.250 but less than 3.300	0.35
3.200 but less than 3.250	0.36
3.150 but less than 3.200	0.37
3.100 but less than 3.150	0.38
3.050 but less than 3.100	0.39
3.000 but less than 3.050	0.40
2.950 but less than 3.000	0.41
2.900 but less than 2.950	0.42
2.850 but less than 2.900	0.43
2.800 but less than 2.850	0.44
2.750 but less than 2.800	0.45
2.700 but less than 2.750	0.46
2.650 but less than 2.700	0.47
2.600 but less than 2.650	0.48
2.550 but less than 2.600	0.49
2.500 but less than 2.550	0.50
2.450 but less than 2.500	0.51
2.400 but less than 2.450	0.52
2.350 but less than 2.400	0.53
2.300 but less than 2.350	0.54
2.250 but less than 2.300	0.55
2.200 but less than 2.250	0.56
2.150 but less than 2.200	0.57
2.100 but less than 2.150	0.58
2.050 but less than 2.100	0.59
2.000 but less than 2.050	0.60
1.975 but less than 2.000	0.61
1.950 but less than 1.975	0.62
1.925 but less than 1.950	0.63
1.900 but less than 1.925	0.64
1.875 but less than 1.900	0.65
1.850 but less than 1.875	0.66
1.825 but less than 1.850	0.67
1.800 but less than 1.825	0.68
1.775 but less than 1.800	0.69
1.750 but less than 1.775	0.70
1.725 but less than 1.750	0.71
1.700 but less than 1.725	0.72
1.675 but less than 1.700	0.73
1.650 but less than 1.675	0.74
1.625 but less than 1.650	0.75
1.600 but less than 1.625	0.76
1.575 but less than 1.600	0.77
1.550 but less than 1.575	0.78
1.525 but less than 1.550	0.79
1.500 but less than 1.525	0.80
1.475 but less than 1.500	0.81
1.450 but less than 1.475	0.82
1.425 but less than 1.450	0.83
1.400 but less than 1.425	0.84
1.375 but less than 1.400	0.85
1.350 but less than 1.375	0.86
1.325 but less than 1.350	0.87
1.300 but less than 1.325	0.88
1.275 but less than 1.300	0.89
1.250 but less than 1.275	0.90
1.225 but less than 1.250	0.91
1.200 but less than 1.225	0.92
1.175 but less than 1.200	0.93
1.150 but less than 1.175	0.94
1.125 but less than 1.150	0.95
1.100 but less than 1.125	0.96
1.075 but less than 1.100	0.97
1.050 but less than 1.075	0.98
1.025 but less than 1.050	0.99
1.000 but less than 1.025	1.00
0.900 but less than 1.000	1.01
0.800 but less than 0.900	1.02
0.700 but less than 0.800	1.03
0.600 but less than 0.700	1.04
0.500 but less than 0.600	1.05
0.400 but less than 0.500	1.06
0.300 but less than 0.400	1.07
0.200 but less than 0.300	1.08
0.100 but less than 0.200	1.09
Less than 0.100%	1.10

      (B) Adjustment to taxable wages. The planned yield as a percent of
total wages, as determined in this subsection (a)(3), shall be adjusted to
taxable wages by multiplying by the ratio of total wages to taxable wages
for all contributing employers for the preceding fiscal year ending June
30, except, with regard to a year in which the taxable wage base changes.
The taxable wages used in the calculation for such a year and the following
year shall be an estimate of what the taxable wages would have been if
the new taxable wage base had been in effect during all of the preceding
fiscal year ending June 30.

      (C) Effective rates. Except with regard to rates for negative account
balance employers, employer contribution rates to be effective for the
ensuing calendar year shall be computed by adjusting proportionately the
experience factors from schedule I of this section to the required yield
on taxable wages. For the purposes of this subsection (a)(3), all rates
computed shall be rounded to the nearest .01% and for calendar year
1983 and ensuing calendar years, the maximum effective contribution rate
shall not exceed 5.4%. For rate years 1995, 1996, 1997, 1998 and 1999,
employers, who are current in filing of all reports and in payment of all
contributions due, shall be issued a contributions rate of 0%. To be eli-
gible for the 0% rate for rate year 1995, an employer must file all delin-
quent reports and pay all contributions due within a 30-day period fol-
lowing the date of mailing of the amended rating notice. For rate year
1996, 1997, 1998 and 1999 in order to be eligible for the 0% rate, em-
ployers must file all reports due and pay all contributions due on or before
January 31, 1996, January 31, 1997, January 31, 1998 and January 31,
1999, respectively. However, for rate year 1996, 1997, 1998 and 1999 the
0% contribution rate for such eligible employers shall not be effective if
the reserve fund ratio in column A of schedule III as determined by this
section is less than 1.75%. For rate years 1996, 1997, 1998 and 1999 the
rates in schedule IIA shall apply unless the reserve fund ratio in column
A of schedule III as determined by this section is less than 1.75%. On
January 15 of 2000, 2001 and 2002, the secretary shall report to the leg-
islature concerning the adequacy of the fund. On July 15 of 2000, 2001
and 2002, the secretary shall make the same report to the legislative co-
ordinating council. As a part of such report, the secretary shall include
any recommendations for adjustment of schedule IIIA.

      (b) Successor classification. (1) For the purposes of this subsection
(b), whenever an employing unit, whether or not it is an ``employing unit''
within the meaning of subsection (g) of K.S.A. 44-703 and amendments
thereto, becomes an employer pursuant to subsection (h)(4) of K.S.A. 44-
703 and amendments thereto or is an employer at the time of acquisition
and meets the definition of a ``successor employer'' as defined by sub-
section (dd) of K.S.A. 44-703 and amendments thereto and is controlled
substantially either directly or indirectly by legally enforceable means or
otherwise by the same interest or interests, shall acquire the experience
rating factors of the predecessor employer. These factors consist of all
contributions paid, benefit experience and annual payrolls of the prede-
cessor employer.

      (2) A successor employer as defined by subsection (h)(4) or subsec-
tion (dd) of K.S.A. 44-703 and amendments thereto may receive the ex-
perience rating factors of the predecessor employer if an application is
made to the secretary or the secretary's designee in writing within 120
days of the date of the transfer.

      (3) Whenever an employing unit, whether or not it is an ``employing
unit'' within the meaning of subsection (g) of K.S.A. 44-703 and amend-
ments thereto, acquires or in any manner succeeds to a percentage of an
employer's annual payroll which is less than 100% and intends to continue
the acquired percentage as a going business, (A) shall acquire the same
percentage of the predecessor's experience factors if the employer is con-
trolled substantially, either directly or indirectly or by legally enforceable
means or otherwise, by the same interest or interests or (B) may acquire
the same percentage of the predecessor's experience factors if: (i) The
predecessor employer and successor employing unit make an application
in writing on the form prescribed by the secretary, (ii) the application is
submitted within 120 days of the date of the transfer, (iii) the successor
employing unit is or becomes an employer subject to this act immediately
after the transfer, (iv) the percentage of the experience rating factors
transferred shall not be thereafter used in computing the contribution
rate for the predecessor employer, and (v) the secretary finds that such
transfer will not tend to defeat or obstruct the object and purposes of this
act.

      (4) If the acquiring employing unit was an employer subject to this
act prior to the date of the transfer, the rate of contribution for the period
from such date to the end of the then current contribution year shall be
the same as the contribution rate prior to the date of the transfer. An
employing unit which was not subject to this act prior to the date of the
transfer shall have a newly computed rate based on the transferred ex-
perience rating factors as of the computation date immediately preceding
the date of acquisition. These experience rating factors consist of all con-
tributions paid, benefit experience and annual payrolls.

      (5) Whenever an employer's account has been terminated as pro-
vided in subsections (d) and (e) of K.S.A. 44-711 and amendments thereto
and the employer continues with employment to liquidate the business
operations, that employer shall continue to be an ``employer'' subject to
the employment security law as provided in subsection (h)(8) of K.S.A.
44-703 and amendments thereto. The rate of contribution from the date
of transfer to the end of the then current calendar year shall be the same
as the contribution rate prior to the date of the transfer. At the completion
of the then current calendar year, the rate of contribution shall be that
of a ``new employer'' as described in subsection (a)(1) of this section.

      (6) No rate computation will be permitted an employing unit suc-
ceeding to the experience of another employing unit pursuant to this
section for any period subsequent to such succession except in accordance
with rules and regulations adopted by the secretary. Any such regulations
shall be consistent with federal requirements for additional credit allow-
ance in section 3303 of the federal internal revenue code of 1986, and
consistent with the provisions of this act.

      (c) Voluntary contributions. Notwithstanding any other provision of
the employment security law, any employer may make voluntary pay-
ments for the purpose of reducing or maintaining a reduced rate in ad-
dition to the contributions required under this section. Such voluntary
payments may be made only during the thirty-day period immediately
following the date of mailing of experience rating notices for a calendar
year. All such voluntary contribution payments shall be paid prior to the
expiration of 120 days after the beginning of the year for which such rates
are effective. The amount of voluntary contributions shall be credited to
the employer's account as of the next preceding computation date and
the employer's rate shall be computed accordingly, except that no em-
ployer's rate shall be reduced more than five rate groups as provided in
schedule I of this section as the result of a voluntary payment. An em-
ployer not having a negative account balance may have such employer's
rate reduced not more than five rate groups as provided in schedule I of
this section as a result of a voluntary payment. An employer having a
negative account balance may have such employer's rate reduced to that
prescribed for rate group 51 of schedule I of this section by making a
voluntary payment in the amount of such negative account balance or to
that rate prescribed for rate groups 50 through 47 of schedule I of this
section by making an additional voluntary payment that would increase
such employer's reserve ratio to the lower limit required for such rate
groups 50 through 47. Under no circumstances shall voluntary payments
be refunded in whole or in part.

      (d) As used in this section, ``negative account balance employer''
means an eligible employer whose total benefits charged to such em-
ployer's account for all past years have exceeded all contributions paid by
such employer for all such years.

      (e) The secretary of human resources shall annually prepare and sub-
mit a certification as to the solvency and adequacy of the amount credited
to the state of Kansas' account in the federal employment security trust
fund to the governor and the employment security advisory council. Com-
mencing in calendar year 1994, the certification shall be submitted on or
before December 1 of each calendar year and shall be for the twelve-
month period ending on June 30 of that calendar year. In arriving at the
certification contributions paid on or before July 31 following the twelve-
month period ending date of June 30 shall be considered. Each certifi-
cation shall be used to determine the need for any adjustment to schedule
III in subsection (a)(3)(A) and to assist in preparing legislation to accom-
plish any such adjustment.

      Sec.  5. K.S.A. 44-717 is hereby amended to read as follows: 44-717.
(a) (1) Penalties on past-due reports, interest on past-due contributions,
payments in lieu of contributions and benefit cost payments. Any em-
ployer or any officer or agent of an employer, who fails to file any wage
report or contribution return by the last day of the month following the
close of each calendar quarter to which they are related shall pay a penalty
as provided by this subsection (a) for each month or fraction of a month
until the report or return is received by the secretary of human resources.
The penalty for each month or fraction of a month shall be an amount
equal to .05% of the total wages paid by the employer during the quarter,
except that no penalty shall be less than $25 nor more than $200 for each
such report or return not timely filed. Contributions and benefit cost
payments unpaid by the last day of the month following the last calendar
quarter to which they are related and payments in lieu of contributions
unpaid 30 days after the mailing of the statement of benefit charges, shall
bear interest at the rate of 1% per month or fraction of a month until
payment is received by the secretary of human resources except that an
employing unit, which is not theretofore subject to this law and which
becomes an employer and does not refuse to make the reports, returns
and contributions, payments in lieu of contributions and benefit cost pay-
ments required under this law, shall not be liable for such penalty or
interest if the wage reports and contribution returns required are filed
and the contributions, payments in lieu of contributions or benefit cost
payments required are paid within 10 days following notification by the
secretary of human resources that a determination has been made fixing
its status as an employer subject to this law. Upon written request and
good cause shown, the secretary of human resources may abate any pen-
alty or interest or portion thereof provided for by this subsection (a).
Interest amounting to less than $1 shall be waived by the secretary of
human resources and shall not be collected. Penalties and interest col-
lected pursuant to this subsection shall be paid into the special employ-
ment security fund. For all purposes under this section, amounts assessed
as surcharges under subsection (j) or under K.S.A. 44-710a and amend-
ments thereto shall be considered to be contributions and shall be subject
to penalties and interest imposed under this section and to collection in
the manner provided by this section. For purposes of this subsection, a
wage report, a contribution return, a contribution, a payment in lieu of
contribution or a benefit cost payment is deemed to be filed or paid as
of the date it is placed in the United States mail.

      (2) Notices of payment and reporting delinquency to Indian tribes or
their tribal units shall include information that failure to make full pay-
ment within the prescribed time frame:

      (i) will cause the Indian tribe to be liable for taxes under FUTA;

      (ii) will cause the Indian tribe to lose the option to make payments in
lieu of contributions;

      (iii) could cause the Indian tribe to be excepted from the definition of
``employer,'' as provided in paragraph (h)(3) of K.S.A. 44-703, and
amendments thereto, and services in the employ of the Indian tribe, as
provided in paragraph (i)(3)(E) of K.S.A. 44-703, and amendments
thereto, to be excepted from ``employment.''

      (b) Collection. (1) If, after due notice, any employer defaults in pay-
ment of any penalty, contributions, payments in lieu of contributions,
benefit cost payments, or interest thereon the amount due may be col-
lected by civil action in the name of the secretary of human resources
and the employer adjudged in default shall pay the cost of such action.
Civil actions brought under this section to collect contributions, payments
in lieu of contributions, benefit cost payments, penalties, or interest
thereon from an employer shall be heard by the district court at the
earliest possible date and shall be entitled to preference upon the cal-
endar of the court over all other civil actions except petitions for judicial
review under this act and cases arising under the workmen's compensa-
tion act. All liability determinations of contributions due, payments in lieu
of contributions or benefit cost payments due shall be made within a
period of five years from the date such contributions, payments in lieu of
contributions or benefit cost payments were due except such determi-
nations may be made for any time when an employer has filed fraudulent
reports with intent to evade liability.

      (2) Any employing unit which is not a resident of this state and which
exercises the privilege of having one or more individuals perform service
for it within this state and any resident employing unit which exercises
that privilege and thereafter removes from this state, shall be deemed
thereby to appoint the secretary of state as its agent and attorney for the
acceptance of process in any civil action under this subsection. In insti-
tuting such an action against any such employing unit the secretary of
human resources shall cause such process or notice to be filed with the
secretary of state and such service shall be sufficient service upon such
employing unit and shall be of the same force and validity as if served
upon it personally within this state. The secretary of human resources
shall send notice immediately of the service of such process or notice,
together with a copy thereof, by registered or certified mail, return receipt
requested, to such employing unit at its last-known address and such
return receipt, the affidavit of compliance of the secretary of human re-
sources with the provisions of this section, and a copy of the notice of
service, shall be appended to the original of the process filed in the court
in which such civil action is pending.

      (3) Any contractor, who is or becomes an employer under the pro-
visions of this act, who contracts with any subcontractor, who also is or
becomes an employer under the provisions of this act, shall be directly
liable for such contributions, penalties and interest due from the subcon-
tractor and the secretary of human resources shall have all of the remedies
of collection against the contractor under the provisions of this act as
though the services in question were performed directly for the contrac-
tor, unless the contractor requires the subcontractor to provide a good
and sufficient bond guaranteeing payment of all contributions, penalties
and interest due or to become due with respect to wages paid for em-
ployment on the contract. For the purpose of this subsection (b)(3), the
words, ``contractor'' and ``subcontractor'' mean and include individuals,
partnerships, firms or corporations, or other associations of persons en-
gaged in the business of the construction, alteration, repairing, disman-
tling or demolition of buildings, roads, bridges, viaducts, sewers, water
and gas mains, streets, disposal plants, water filters, tanks and towers,
airports, dams, levees and canals, oil and gas wells, water wells, pipelines,
and every other type of structure, project, development or improvement
coming within the definition of real property.

      (4) The district courts of this state shall entertain, in the manner
provided in subsections (b)(1), (b)(2) and (b)(3), actions to collect con-
tributions, payments in lieu of contributions, benefit cost payments and
other amounts owed including interest thereon for which liability has
accrued under the employment security law of any other state or of the
federal government.

      (c) Priorities under legal dissolutions or distributions. In the event of
any distribution of employer's assets pursuant to an order of any court
under the laws of this state, including but not limited to any probate
proceeding, interpleader, receivership, assignment for benefit of credi-
tors, adjudicated insolvency, composition or similar proceedings, contri-
butions or payments in lieu of contributions then or thereafter due shall
be paid in full from the moneys which shall first come into the estate,
prior to all other claims, except claims for wages of not more than $250
to each claimant, earned within six months of the commencement of the
proceedings. In the event of an employer's adjudication in bankruptcy,
judicially confirmed extension proposal, or composition, under the federal
bankruptcy act of 1898, as amended, contributions then or thereafter due
shall be entitled to such priority as is provided in that act for taxes due
any state of the United States.

      (d) Assessments. If any employer fails to file a report or return re-
quired by the secretary of human resources for the determination of con-
tributions, or payments in lieu of contributions, or benefit cost payments,
the secretary of human resources may make such reports or returns or
cause the same to be made, on the basis of such information as the sec-
retary may be able to obtain and shall collect the contributions, payments
in lieu of contributions or benefit cost payments as determined together
with any interest due under this act. The secretary of human resources
shall immediately forward to the employer a copy of the assessment by
registered or certified mail to the employer's address as it appears on the
records of the agency, and such assessment shall be final unless the em-
ployer protests such assessment and files a corrected report or return for
the period covered by the assessment within 15 days after the mailing of
the copy of assessment. Failure to receive such notice shall not invalidate
the assessment. Notice in writing shall be presumed to have been given
when deposited as certified or registered matter in the United States mail,
addressed to the person to be charged with notice at such person's address
as it appears on the records of the agency.

      (e)  (1) Lien. If any employer or person who is liable to pay contri-
butions, payments in lieu of contributions or benefit cost payments ne-
glects or refuses to pay the same after demand, the amount, including
interest and penalty, shall be a lien in favor of the state of Kansas, sec-
retary of human resources, upon all property and rights to property,
whether real or personal, belonging to such employer or person. Such
lien shall not be valid as against any mortgagee, pledgee, purchaser or
judgment creditor until notice thereof has been filed by the secretary of
human resources in the office of register of deeds in any county in the
state of Kansas, in which such property is located, and when so filed shall
be notice to all persons claiming an interest in the property of the em-
ployer or person against whom filed. The register of deeds shall enter
such notices in the financing statement record and shall also record the
same in full in miscellaneous record and index the same against the name
of the delinquent employer. The register of deeds shall accept, file, and
record such notice without prepayment of any fee, but lawful fees shall
be added to the amount of such lien and collected when satisfaction is
presented for entry. Such lien shall be satisfied of record upon the pres-
entation of a certificate of discharge by the state of Kansas, secretary of
human resources. Nothing contained in this subsection (e) shall be con-
strued as an invalidation of any lien or notice filed in the name of the
unemployment compensation division or the employment security divi-
sion and such liens shall be and remain in full force and effect until
satisfied as provided by this subsection (e).

      (2) Authority of secretary or authorized representative. If any em-
ployer or person who is liable to pay any contributions, payments in lieu
of contributions or benefit cost payments, including interest and penalty,
neglects or refuses to pay the same within 10 days after notice and de-
mand therefor, the secretary or the secretary's authorized representative
may collect such contributions, payments in lieu of contributions or ben-
efit cost payments, including interest and penalty, and such further
amount as is sufficient to cover the expenses of the levy, by levy upon all
property and rights to property which belong to the employer or person
or which have a lien created thereon by this subsection (e) for the pay-
ment of such contributions, payments in lieu of contributions or benefit
cost payments, including interest and penalty. As used in this subsection
(e), ``property'' includes all real property and personal property, whether
tangible or intangible, except such property which is exempt under K.S.A.
60-2301 et seq., and amendments thereto. Levy may be made upon the
accrued salary or wages of any officer, employee or elected official of any
state or local governmental entity which is subject to K.S.A. 60-723 and
amendments thereto, by serving a notice of levy as provided in subsection
(d) of K.S.A. 60-304 and amendments thereto. If the secretary or the
secretary's authorized representative makes a finding that the collection
of the amount of such contributions, payments in lieu of contributions or
benefit cost payments, including interest and penalty, is in jeopardy, no-
tice and demand for immediate payment of such amount may be made
by the secretary or the secretary's authorized representative and, upon
failure or refusal to pay such amount, immediate collection of such
amount by levy shall be lawful without regard to the ten-day period pro-
vided in this subsection (e).

      (3) Seizure and sale of property. The authority to levy granted under
this subsection (e) includes the power of seizure by any means. A levy
shall extend only to property possessed and obligations existing at the
time thereof. In any case in which the secretary or the secretary's au-
thorized representative may levy upon property or rights to property, the
secretary or the secretary's authorized representative may seize and sell
such property or rights to property.

      (4) Successive seizures. Whenever any property or right to property
upon which levy has been made under this subsection (e) is not sufficient
to satisfy the claim of the secretary for which levy is made, the secretary
or the secretary's authorized representative may proceed thereafter and
as often as may be necessary, to levy in like manner upon any other
property or rights to property which belongs to the employer or person
against whom such claim exists or upon which a lien is created by this
subsection (e) until the amount due from the employer or person, to-
gether with all expenses, is fully paid.

      (f) Warrant. In addition or as an alternative to any other remedy
provided by this section and provided that no appeal or other proceeding
for review permitted by this law shall then be pending and the time for
taking thereof shall have expired, the secretary of human resources or an
authorized representative of the secretary may issue a warrant certifying
the amount of contributions, payments in lieu of contributions, benefit
cost payments, interest or penalty, and the name of the employer liable
for same after giving 15 days prior notice. Upon request, service of final
notices shall be made by the sheriff within the sheriff's county, by the
sheriff's deputy or some person specially appointed by the secretary for
that purpose, or by the secretary's designee. A person specially appointed
by the secretary or the secretary's designee to serve final notices may
make service any place in the state. Final notices shall be served as fol-
lows:

      (1) Individual. Service upon an individual, other than a minor or in-
capacitated person, shall be made by delivering a copy of the final notice
to the individual personally or by leaving a copy at such individual's dwell-
ing house or usual place of abode with some person of suitable age and
discretion then residing therein, by leaving a copy at the business estab-
lishment of the employer with an officer or employee of the establish-
ment, or by delivering a copy to an agent authorized by appointment or
by law to receive service of process, but if the agent is one designated by
a statute to receive service, such further notice as the statute requires
shall be given. If service as prescribed above cannot be made with due
diligence, the secretary or the secretary's designee may order service to
be made by leaving a copy of the final notice at the employer's dwelling
house, usual place of abode or business establishment.

      (2) Corporations and partnerships. Service upon a domestic or for-
eign corporation or upon a partnership or other unincorporated associa-
tion, when by law it may be sued as such, shall be made by delivering a
copy of the final notice to an officer, partner or resident managing or
general agent thereof by leaving a copy at any business office of the em-
ployer with the person having charge thereof or by delivering a copy to
any other agent authorized by appointment or required by law to receive
service of process, if the agent is one authorized by law to receive service
and, if the law so requires, by also mailing a copy to the employer.

      (3) Refusal to accept service. In all cases when the person to be
served, or an agent authorized by such person to accept service of peti-
tions and summonses, shall refuse to receive copies of the final notice,
the offer of the duly authorized process server to deliver copies thereof
and such refusal shall be sufficient service of such notice.

      (4) Proof of service. (A) Every officer to whom a final notice or other
process shall be delivered for service within or without the state, shall
make return thereof in writing stating the time, place and manner of
service of such writ, and shall sign such officer's name to such return.

      (B) If service of the notice is made by a person appointed by the
secretary or the secretary's designee to make service, such person shall
make an affidavit as to the time, place and manner of service thereof in
a form prescribed by the secretary or the secretary's designee.

      (5) Time for return. The officer or other person receiving a final no-
tice shall make a return of service promptly and shall send such return
to the secretary or the secretary's designee in any event within 10 days
after the service is effected. If the final notice cannot be served it shall
be returned to the secretary or the secretary's designee within 30 days
after the date of issue with a statement of the reason for the failure to
serve the same. The original return shall be attached to and filed with
any warrant thereafter filed.

      (6) Service by mail. (A) Upon direction of the secretary or the sec-
retary's designee, service by mail may be effected by forwarding a copy
of the notice to the employer by registered or certified mail to the em-
ployer's address as it appears on the records of the agency. A copy of the
return receipt shall be attached to and filed with any warrant thereafter
filed.

      (B) The secretary of human resources or an authorized representative
of the secretary may file the warrant for record in the office of the clerk
of the district court in the county in which the employer owing such
contributions, payments in lieu of contributions, benefit cost payments,
interest, or penalty has business property. The warrant shall certify the
amount of contributions, payments in lieu of contributions, benefit cost
payments, interest and penalty due, and the name of the employer liable
for such amount. It shall be the duty of the clerk of the district court to
file such warrant of record and enter the warrant in the records of the
district court for judgment and decrees under the procedure prescribed
for filing transcripts of judgment.

      (C) The clerk shall enter, on the day the warrant is filed, the case on
the appearance docket, together with the amount and the time of filing
the warrant. From the time of filing such warrant, the amount of the
contributions, payments in lieu of contributions, benefit cost payments,
interest, and penalty, certified therein, shall have the force and effect of
a judgment of the district court until the same is satisfied by the secretary
of human resources or an authorized representative or attorney for the
secretary. Execution shall be issuable at the request of the secretary of
human resources, an authorized representative or attorney for the sec-
retary, as is provided in the case of other judgments.

      (D) Postjudgment procedures shall be the same as for judgments
according to the code of civil procedure.

      (E) Warrants shall be satisfied of record by payment to the clerk of
the district court of the contributions, payments in lieu of contributions,
benefit cost payments, penalty, interest to date, and court costs. Warrants
may also be satisfied of record by payment to the clerk of the district
court of all court costs accrued in the case and by filing a certificate by
the secretary of human resources, certifying that the contributions, pay-
ments in lieu of contributions, benefit cost payments, interest and penalty
have been paid.

      (g) Remedies cumulative. The foregoing remedies shall be cumulative
and no action taken shall be construed as an election on the part of the
state or any of its officers to pursue any remedy or action under this
section to the exclusion of any other remedy or action for which provision
is made.

      (h) Refunds. If any individual, governmental entity or organization
makes application for refund or adjustment of any amount paid as con-
tributions, benefit cost payments or interest under this law and the sec-
retary of human resources determines that such amount or any portion
thereof was erroneously collected, except for amounts less than $1, the
secretary of human resources shall allow such individual or organization
to make an adjustment thereof, in connection with subsequent contri-
bution payments, or if such adjustment cannot be made the secretary of
human resources shall refund the amount, except for amounts less than
$1, from the employment security fund, except that all interest errone-
ously collected which has been paid into the special employment security
fund shall be refunded out of the special employment security fund. No
adjustment or refund shall be allowed with respect to a payment as con-
tributions, benefit cost payments or interest unless an application therefor
is made on or before whichever of the following dates is later: (1) One
year from the date on which such payment was made; or (2) three years
from the last day of the period with respect to which such payment was
made. For like cause and within the same period adjustment or refund
may be so made on the secretary's own initiative. The secretary of human
resources shall not be required to refund any contributions, payments in
lieu of contributions or benefit cost payments based upon wages paid
which have been used as base-period wages in a determination of a claim-
ant's benefit rights when justifiable and correct payments have been made
to the claimant as the result of such determination. For all taxable years
commencing after December 31, 1997, interest at the rate prescribed in
K.S.A. 79-2968 and amendments thereto shall be allowed on a contri-
bution or benefit cost payment which the secretary has determined was
erroneously collected pursuant to this section.

      (i)  (1) Cash deposit or bond. If any contributing employer is delin-
quent in making payments under the employment security law during any
two quarters of the most recent four-quarter period, the secretary or the
secretary's authorized representative shall have the discretionary power
to require such contributing employer either to deposit cash or to file a
bond with sufficient sureties to guarantee the payment of contributions,
penalty and interest owed by such employer.

      (2) The amount of such cash deposit or bond shall be not less than
the largest total amount of contributions, penalty and interest reported
by the employer in two of the four calendar quarters preceding any de-
linquency. Such cash deposit or bond shall be required until the employer
has shown timely filing of reports and payment of contributions for four
consecutive calendar quarters.

      (3) Failure to file such cash deposit or bond shall subject the em-
ployer to a surcharge of 2.0% which shall be in addition to the rate of
contributions assigned to the employer under K.S.A. 44-710a and amend-
ments thereto. Contributions paid as a result of this surcharge shall not
be credited to the employer's experience rating account. This surcharge
shall be effective during the next full calendar year after its imposition
and during each full calendar year thereafter until the employer has filed
the required cash deposit or bond or has shown timely filing of reports
and payment of contributions for four consecutive calendar quarters.

      (j) Any officer, major stockholder or other person who has charge of
the affairs of an employer, which is an employing unit described in section
501(c)(3) of the federal internal revenue code of 1954 or which is any
other corporate organization or association, or any member or manager
of a limited liability company, or any public official, who willfully fails to
pay the amount of contributions, payments in lieu of contributions or
benefit cost payments required to be paid under the employment security
law on the date on which such amount becomes delinquent, shall be
personally liable for the total amount of the contributions, payments in
lieu of contributions or benefit cost payments and any penalties and in-
terest due and unpaid by such employing unit. The secretary or the sec-
retary's authorized representative may assess such person for the total
amount of contributions, payments in lieu of contributions or benefit cost
payments and any penalties, and interest computed as due and owing.
With respect to such persons and such amounts assessed, the secretary
shall have available all of the collection remedies authorized or provided
by this section.

 Sec.  6. K.S.A. 44-703, 44-706, 44-710, 44-710a and 44-717 are
hereby repealed.
 Sec.  7. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 19, 2001.
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