CHAPTER 183 SENATE BILL No. 481 An  Act concerning electronic procedures, records, transactions and signatures; relating to
electronic and digital signatures; electronic procurement procedures for certain govern-
mental entities; amending K.S.A. 2001 Supp. 16-1605, 72-6760 and 75-3739a and re-
pealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2001 Supp. 75-3739a is hereby amended to read
as follows: 75-3739a. (a) The director of purchases shall conduct a pilot
study utilizing the reverse auctioning electronic procurement process for
the purchase of selected goods or materials for one or more state agencies
in accordance with this section. The director of purchases shall adopt
policies and procedures for such pilot project in accordance with and
subject to the provisions of this section.

      (b) The provisions of K.S.A. 75-430, and amendments thereto, relat-
ing to advertisements in the Kansas register and the provisions of K.S.A.
75-3739 et seq., and amendments thereto, regarding procedures for
sealed bidding and the opening of bids shall not apply to bids or purchases
conducted under the pilot project utilizing the reverse auctioning elec-
tronic procurement process in accordance with this section. All bids sub-
mitted under the pilot project utilizing the reverse auctioning electronic
procurement process in accordance with this section shall be subject to
the open records act.

      (c) Reverse auctioning shall not be used for the acquisition of any
services for construction projects or for the acquisition of any other serv-
ices.

      (d) On or before January 15, 2002, and each six months thereafter
On or before January 15, 2003, and on or before January 15, 2004, the
director of purchases shall submit a written report to the secretary of the
legislative coordinating council, the secretary of the senate and the chief
clerk standing committee on commerce of the senate and the standing
committee on e-government of the house of representatives on the activ-
ities and results of the pilot project utilizing the reverse auctioning elec-
tronic procurement process under this section and make recommenda-
tions whether or not the authority to use such procurement process
should be continued beyond June 30, 2003 2004. The director of pur-
chases also shall notify each remaining member of the legislature of the
availability of copies of such report. The report shall be made by the
director by publishing such report on the internet and by notifying each
member that the report is available and providing, as part of such notice,
the uniform resource locator (URL) at which such report is available.

      (e) Each year, the legislative post auditor shall conduct a performance
audit of the pilot project utilizing the reverse auctioning electronic pro-
curement process under this section and the activities of the division of
purchases in relation to such pilot project. In conducting such audit, the
post auditor shall include a determination of the applicable factors spec-
ified in subsection (b) of K.S.A. 74-7287, and amendments thereto, and
such other factors as may be directed by the legislative post audit com-
mittee. Such audit shall be conducted as soon after the close of the fiscal
year as practicable. Upon completion of such audit, the legislative post
audit committee shall review and accept such report.

      (f) (e) As used in this section, ``reverse auctioning'' means a procure-
ment process following procedures approved by the director of purchases
where bidders are invited to bid on specific goods through real-time elec-
tronic bidding, with the award being made to the lowest responsible and
responsive bidder; during the bidding process, bidders' prices are re-
vealed and bidders shall have the opportunity to modify their bid prices
for the duration of the time period established for the bid opening.

      (g) (f) The provisions of this section shall expire June 30, 2003 2004.

      Sec.  2. K.S.A. 2001 Supp. 72-6760 is hereby amended to read as
follows: 72-6760. (a) Except as provided by this section and section 3, no
expenditure involving an amount greater than $10,000 for construction,
reconstruction or remodeling or for the purchase of materials, goods or
wares shall be made by the board of education of any school district except
upon sealed proposals, and to the lowest responsible bidder.

      (b) The provisions of subsection (a) do not apply to expenditures by
a board of education for the purchase of:

      (1) Services;

      (2) products required to be purchased under the provisions of K.S.A.
75-3317 through 75-3322, and amendments thereto;

      (3) educational materials directly related to curriculum and secured
by copyright;

      (4) motor fuels required to provide or furnish transportation;

      (5) perishable foods and foodstuffs required for operation of a school
lunch program;

      (6) articles or products that are produced, manufactured or provided
by inmates under the prison-made goods act of Kansas;

      (7) natural gas that will be consumed in buildings owned or operated
by the school district;

      (8) materials, goods or wares required for reconstructing, remodel-
ing, repairing or equipping buildings when such purchase has been ne-
cessitated by the occurrence of a loss against which the board of education
has purchased property or casualty insurance; and

      (9) materials, goods or wares which are purchased:

      (A) From vendors who have entered into contracts with the state
director of purchases pursuant to state purchasing statutes for purchases
by state agencies; and

      (B) under the same pricing provisions established in the state con-
tracts, subject to agreement of the vendor to honor the state contract
prices.

      (c) Whenever the board of education of any school district lets bids
for the purchase of materials, goods or wares and bids are submitted by
bidders domiciled within the school district and by bidders domiciled
outside the school district and the low bid is submitted by a bidder dom-
iciled outside the school district, the school district domiciliary which
submitted the lowest bid may be deemed the preferred bidder and
awarded the bid if:

      (1) The quality, suitability and usability of the materials, goods or
wares are equal;

      (2) the amount of the bid of the school district domiciliary is not more
than 1% greater than the amount of the low bid; and

      (3) the school district domiciliary agrees to meet the low bid by filing
a written agreement to that effect within 72 hours after receiving notifi-
cation of being deemed the preferred bidder.

      (d) The provisions of subsection (c) do not apply to expenditures for
construction, reconstruction or remodeling.

      New Sec.  3. (a) The state board of education shall allow every school
district to participate in a reverse auctioning electronic procurement pro-
cess and on-line bidding process. The state board of education shall de-
velop guidelines and procedures for those school districts choosing to use
these procurement processes.

      (b) The school board of any school district desiring to utilize on-line
bidding or reverse auctioning must first conduct a public hearing to de-
termine whether or not the administration of that school district will util-
ize such procedures for purchasing services, materials, goods or wares.

      (c) Whenever the board of education of any school district is required
to accept bids prior to the expenditure of money to purchase materials,
goods or wares or whenever the board chooses to request the submission
of bids prior to the expenditure of money to purchase materials, goods
or wares, the board may conduct a reverse auctioning electronic pro-
curement process for the purchase of such, materials, goods or wares.

      (d) Whenever the board of education of any school district is required
to accept bids prior to the expenditure of money to purchase services,
materials, goods or wares or whenever the board chooses to request the
submission of bids prior to the expenditure of money to purchase services,
materials, goods or wares, the board may conduct an on-line bidding
process for the purchase of such services, materials, goods or wares.

      (e) If a school district utilizes a reverse auctioning electronic process
or an on-line bidding process authorized by this section, the provisions
of any law requiring procedures for sealed bidding and the opening of
bids shall not apply to such purchases.

      (f) Reverse auctioning shall not be used for the acquisition of any
services for construction projects or for the acquisition of any other serv-
ices.

      (g) On or before January 15, 2003, and January 15, 2004, the board
of education of a school district which utilizes a reverse auctioning elec-
tronic process or an on-line bidding process authorized by this section,
shall submit a written report to the state board of education. The report
shall include a comparison of the final pricing offered, the percentage in
the increase or decrease or the number of bidders participating in the
bidding, the number of bidders outside the state of Kansas, the number
of bid protests and any other information deemed appropriate by the state
board of education.

      (h) As used in this section:

      (1) ``Reverse auctioning'' means a procurement process of where bid-
ders are invited to bid on specific materials, goods or wares through real-
time electronic bidding, with the award being made to the lowest re-
sponsible and responsive bidder; during the bidding process, bidders'
prices are revealed and bidders shall have the opportunity to modify their
bid prices for the duration of the time period established for the bid
opening; and

      (2) ``on-line bidding'' means a procurement process in which a school
district electronically receives bids for services, materials, goods or wares
in a competitive bidding event.

      (g) The provisions of this section shall expire on June 30, 2004.

      Sec.  4. K.S.A. 2001 Supp. 16-1605 is hereby amended to read as
follows: 16-1605. (a) This act does not require a record or signature to be
created, generated, sent, communicated, received, stored or otherwise
processed or used by electronic means or in electronic form.

      (b) This act applies only to transactions between parties each of which
has agreed to conduct transactions by electronic means. Whether the
parties agree to conduct a transaction by electronic means is determined
from the context and surrounding circumstances, including the parties'
conduct.

      (c) A party that agrees to conduct a transaction by electronic means
may refuse to conduct other transactions by electronic means. The right
granted by this subsection may not be waived by agreement.

      (d) Except as otherwise provided in this act, the effect of any of its
provisions may be varied by agreement. The presence in certain provi-
sions of this act of the words ``unless otherwise agreed'', or words of
similar import, does not imply that the effect of other provisions may not
be varied by agreement.

      (e) Whether an electronic record or electronic signature has legal
consequences is determined by this act and other applicable law.

      (f) This The uniform electronic transactions act does not require any
person to use or permit the use of electronic or digital signatures.

      (g) Any agency may adopt rules and regulations governing the
agency's use of digital signatures as long as the rules and regulations meet
or exceed those adopted by the secretary. Any state agency that offers or
provides the option of using an electronic signature to persons doing busi-
ness with that state agency shall establish written standards governing
the use of those electronic signatures as follows:

      (1) On or before December 31, 2002, for electronic signature appli-
cations that are in use by the state agency before July 1, 2002; or

      (2) before offering or providing the option of using an electronic sig-
nature for any applications implemented on or after July 1, 2002.

      (h) The uniform electronic transactions act does not require any per-
son to use or permit the use of digital signatures.

      (i) The secretary of state shall adopt rules and regulations governing
the use of digital signatures by state agencies. Each state agency offering
or providing the option of using a digital signature to persons doing busi-
ness with that state agency shall implement digital signatures in a manner
consistent with the regulations of the secretary of state, except that the
state agency may adopt rules and regulations governing that agency's use
of digital signatures that exceed the minimum standards established by
the rules and regulations of the secretary of state.

      Sec.  5. K.S.A. 2001 Supp. 16-1605, 72-6760 and 75-3739a are hereby
repealed.

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

Approved May 29, 2002.
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