CHAPTER 206 HOUSE BILL No. 2266 An  Act concerning certain electric generation facilities; relating to regulation and taxation
thereof; amending K.S.A. 2000 Supp. 66-104 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2000 Supp. 66-104 is hereby amended to read as
follows: 66-104. (a) The term ``public utility,'' as used in this act, shall be
construed to mean every corporation, company, individual, association of
persons, their trustees, lessees or receivers, that now or hereafter may
own, control, operate or manage, except for private use, any equipment,
plant or generating machinery, or any part thereof, for the transmission
of telephone messages or for the transmission of telegraph messages in
or through any part of the state, or the conveyance of oil and gas through
pipelines in or through any part of the state, except pipelines less than 15
miles in length and not operated in connection with or for the general
commercial supply of gas or oil, and all companies for the production,
transmission, delivery or furnishing of heat, light, water or power. No
cooperative, cooperative society, nonprofit or mutual corporation or as-
sociation which is engaged solely in furnishing telephone service to sub-
scribers from one telephone line without owning or operating its own
separate central office facilities, shall be subject to the jurisdiction and
control of the commission as provided herein, except that it shall not
construct or extend its facilities across or beyond the territorial boundaries
of any telephone company or cooperative without first obtaining approval
of the commission. As used herein, the term ``transmission of telephone
messages'' shall include the transmission by wire or other means of any
voice, data, signals or facsimile communications, including all such com-
munications now in existence or as may be developed in the future.

      (b) The term ``public utility'' shall also include that portion of every
municipally owned or operated electric or gas utility located outside of
and more than three miles from the corporate limits of such municipality,
but nothing in this act shall apply to a municipally owned or operated
utility, or portion thereof, located within the corporate limits of such
municipality or located outside of such corporate limits but within three
miles thereof except as provided in K.S.A. 66-131a, and amendments
thereto.

      (c) Except as herein provided, the power and authority to control and
regulate all public utilities and common carriers situated and operated
wholly or principally within any city or principally operated for the benefit
of such city or its people, shall be vested exclusively in such city, subject
only to the right to apply for relief to the corporation commission as
provided in K.S.A. 66-133, and amendments thereto, and to the provi-
sions of K.S.A. 66-131a and K.S.A. 2000 Supp. 66-104e, and amendments
thereto. A transit system principally engaged in rendering local transpor-
tation service in and between contiguous cities in this and another state
by means of street railway, trolley bus and motor bus lines, or any com-
bination thereof, shall be deemed to be a public utility as that term is
used in this act and, as such, shall be subject to the jurisdiction of the
commission.

      (d) The term ``public utility'' shall not include any activity of an oth-
erwise jurisdictional corporation, company, individual, association of per-
sons, their trustees, lessees or receivers as to the marketing or sale of
compressed natural gas for end use as motor vehicle fuel.

      (e) At the option of an otherwise jurisdictional entity, the term ``public
utility'' shall not include any activity or facility of such entity as to the
generation, marketing and sale of electricity generated by an electric gen-
eration facility or addition to an electric generation facility which:

      (1) Is newly constructed and placed in service on or after January 1,
2001; and

      (2) is not in the rate base of: (A) An electric public utility that is
subject to rate regulation by the state corporation commission; (B) any
cooperative, as defined by K.S.A. 17-4603 and amendments thereto, or
any nonstock member-owned cooperative corporation incorporated in
this state; or (C) a municipally owned or operated electric utility.

      (f) Additional generating capacity achieved through efficiency gains
by refurbishing or replacing existing equipment at generating facilities
placed in service before January 1, 2001, shall not qualify under subsec-
tion (e).

      New Sec.  2. As used in sections 2 and 3, and amendments thereto:

      (a) ``Independent power producer property'' means all or any portion
of property used solely in the generation, marketing and sale of electricity
generated by an electric generation facility described in subsection (e) of
K.S.A. 66-104, and amendments thereto. Independent power producer
property shall not include property used in generating electricity by nu-
clear resources or technologies or by renewable energy resources or tech-
nologies, as defined in K.S.A. 79-201, and amendments thereto;

      (b) ``peak load plant'' means an independent power plant used during
maximum load periods.

      New Sec.  3. The following described property, to the extent herein
specified, shall be exempt from all property or ad valorem taxes levied
under the laws of the state of Kansas:

      (a) All electric generation facilities described in subsection (e) of
K.S.A. 66-104, and amendments thereto.

      (b) The provisions of subsection (a) shall apply:

      (1) Except as provided in paragraph (2), from and after commence-
ment of construction of such property and for the 12 taxable years im-
mediately following the taxable year in which construction of such prop-
erty is completed; or

      (2) for peak load plants, from and after commencement of construc-
tion of such property and for the six taxable years immediately following
the taxable year in which construction of such property is completed.

      (c) All pollution control devices purchased for or constructed or in-
stalled at electric generation facilities described in subsection (e) of K.S.A.
66-104, and amendments thereto.

      (d) The provisions of subsection (c) shall apply:

      (1) Except as provided in paragraph (2), from and after purchase or
commencement of construction or installation of such property and for
the 12 taxable years immediately following the taxable year in which such
property is purchased or construction or installation of such property is
completed; or

      (2) for a peak load plant, from and after purchase or commencement
of construction or installation of such property and for the six taxable
years immediately following the taxable year in which such property is
purchased or construction or installation of such property is completed.

      (e) The provisions of this section shall apply to all taxable years com-
mencing after December 31, 2000.

      New Sec.  4. (a) For the purpose of financing the construction, pur-
chase and installation of pollution control devices at electric generation
facilities and additions to electric generation facilities described in sub-
section (e) of K.S.A. 66-104, and amendments thereto, the Kansas de-
velopment finance authority is hereby authorized to issue revenue bonds
in amounts sufficient to pay the costs of such construction, purchase and
installation, including any required interest on the bonds during construc-
tion and installation, plus all amounts required for the costs of bond is-
suance and any required reserves on the bonds. The bonds, and interest
thereon, issued pursuant to this section shall be payable from revenues
derived from sales of generation from the electric generation facility. As
used in this subsection, ``pollution control devices'' means any device or
structure required to meet air emission or water discharge standards im-
posed by state or federal law.

      (b) The provisions of subsection (a) of K.S.A. 74-8905, and amend-
ments thereto, shall not prohibit the issuance of bonds by the Kansas
development finance authority for the purposes of this section and any
such issuance of bonds is exempt from the provisions of subsection (a) of
K.S.A. 74-8905, and amendments thereto, which would operate to pre-
clude such issuance.

      (c) Revenue bonds, including refunding revenue bonds, issued here-
under shall not constitute an indebtedness of the state of Kansas, nor
shall they constitute indebtedness within the meaning of any constitu-
tional or statutory provision limiting the incurring of indebtedness.

      (d) Revenue bonds, including refunding revenue bonds, issued here-
under and the income derived therefrom are and shall be exempt from
all state, county and municipal taxation in the state of Kansas, except
Kansas estate taxes.

 Sec.  5. K.S.A. 2000 Supp. 66-104 is hereby repealed.

      Sec.  6. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 22, 2001.
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