CHAPTER  116 Substitute for SENATE BILL No. 83 (Amended by Chapter 158) An Act concerning school districts; relating to certain funds; enacting the school budgeting
best practices reform act; amending K.S.A. 12-1663, 12-2615, 44-505c, 72-4141, 72-
5390, 72-6409, 72-6425, 72-6428, 72-8209, 72-8223, 72-8302, 72-8316, 72-8317, 72-
8415a, 72-8415b, 75-6110, 79-2926 and 79-2927 and repealing the existing sections; also
repealing K.S.A. 72-3703.
Be it enacted by the Legislature of the State of Kansas:

      New Section  1. (a) There is hereby established in every school dis-
trict a special liability expense fund. Moneys in such fund shall be used
to:

      (1) Pay the cost of providing for its defense and the defense of em-
ployees pursuant to the Kansas tort claims act and for the payment of
claims and other direct and indirect costs resulting from the implemen-
tation of such act; and

      (2) pay judgments rendered against the district.

      (b) The district shall credit to the special liability expense fund any
moneys received by the district from any source which may be lawfully
utilized for the purposes specified by this section including the proceeds
of tax levies hereinafter authorized and provided. Any balance remaining
in the special liability expense fund at the end of the budget year shall
be carried forward into that fund for succeeding budget years. Such fund
shall not be subject to the provisions of K.S.A. 79-2925 through 79-2937,
and amendments thereto. In making the budget of the district, the
amounts credited to and the amount on hand in such special fund, and
the amount expended therefrom, shall be included in the annual budget
for the information of the residents of the district. Interest earned on the
investment of moneys in any such fund shall be credited to that fund.

      (c) Whenever the governing body of any school district determines
that moneys from other sources will be insufficient to pay such costs, the
governing body is hereby authorized to levy an annual tax upon all taxable
tangible property within the district in an amount determined by the
governing body to be necessary for such purpose and to pay a portion of
the principal and interest on bonds issued by cities under the authority
of K.S.A. 12-1774, and amendments thereto, for the financing of rede-
velopment projects upon property located in such school district.

      New Sec.  2. (a) There is hereby established in every school district
a special reserve fund. Moneys in such fund shall be used to:

      (1) Pay claims, judgments, expenses and other purposes relating to
health care services, disability income benefits and group life insurance
benefits as authorized by K.S.A. 72-8415a, and amendments thereto;

      (2) pay costs relating to uninsured losses; and

      (3) pay the cost of workers compensation insurance and workers com-
pensation claims, awards, expenses and other purposes authorized by the
workers compensation act.

      (b) Any balance remaining in the special reserve fund at the end of
the budget year shall be carried forward into that reserve fund for suc-
ceeding budget years. Such fund shall not be subject to the provisions of
K.S.A. 79-2925 through 79-2937, and amendments thereto. In preparing
the budget of such school district, the amounts credited to and the
amount on hand in the special reserve fund, and the amount expended
therefrom shall be included in the annual budget for the information of
the residents of the school district. Interest earned on the investment of
moneys in any such fund shall be credited to that fund.

      New Sec.  3. (a) There is hereby established in every school district
a textbook and student materials revolving fund. Moneys in such fund
shall be used to:

      (1) Purchase any items designated in K.S.A. 72-5389, and amend-
ments thereto;

      (2) pay the cost of materials or other items used in curricular, extra-
curricular or other school-related activities; and

      (3) purchase textbooks as authorized by K.S.A. 72-4141, and amend-
ments thereto.

      (b) Any balance remaining in the textbook and student materials re-
volving fund at the end of the budget year shall be carried forward into
that fund for succeeding budget years. Such fund shall not be subject to
the provisions of K.S.A. 79-2925 through 79-2937, and amendments
thereto. In preparing the budget of such school district, the amounts
credited to and the amount on hand in the textbook and student materials
revolving fund, and the amount expended therefrom shall be included in
the annual budget for the information of the residents of the school dis-
trict. Interest earned on the investment of moneys in any such fund shall
be credited to that fund.

      Sec.  4. K.S.A. 12-2615 is hereby amended to read as follows: 12-
2615. (a) The governing body of any city, county or school district may
establish by resolution a risk management reserve fund for the purpose
of providing moneys to reimburse such city, county or school district, in
whole or in part, from insurable losses not otherwise insured pay the costs
relating to any uninsured loss. The governing body of a city or county
may pay such costs from the risk management reserve fund of the city or
county. The board of education of any school district may pay such costs
from the special reserve fund of the district. The resolution establishing
such risk management reserve fund shall prescribe the purposes for which
moneys in the fund may be used, and any expenditure therefrom shall
require the approval of the governing body. Moneys may be paid into
such risk management reserve fund or special reserve fund from any
source which may be lawfully utilized for such purposes, including trans-
fers from the general fund, from any special liability expense fund estab-
lished in accordance with the provisions of K.S.A. 75-6110, and amend-
ments thereto, or from any other fund or grant program account of the
governmental unit in reasonable proportion to the estimated cost of self
insuring the risk losses covered by such reserve fund. Such fund funds.
Such funds shall not be subject to the provisions of K.S.A. 79-2925 to 79-
2937, inclusive, and acts amendatory thereof or supplemental thereto,
except that through 79-2937, and amendments thereto. In making the
budget of such city, county or school district, the amounts credited to and
the amount on hand in such reserve fund, and the amount expended
therefrom, shall be included in the annual budget for the information of
the residents. Interest earned on the investment of moneys in such re-
serve fund shall be credited to such fund.

      (b) If the governing body of any city, county or school district shall
determine determines on an actuarial basis that money which has been
credited to such fund, or any part thereof, is no longer needed for the
purposes for which it was established, said the governing body may trans-
fer such amount not needed to the funds or accounts from which the
money was received. Any money so transferred shall be budgeted in ac-
cordance with the provisions of K.S.A. 79-2925 to 79-2937, inclusive, and
acts amendatory thereof or supplemental through 79-2937, and amend-
ments thereto.

      Sec.  5. K.S.A. 44-505c is hereby amended to read as follows: 44-
505c. Any city, county, school district or other political subdivision or
municipality is hereby authorized to pay the cost of workmen's compen-
sation coverage for its employees as provided by this act and may pay
such costs from the various funds from which compensation is paid to its
employees. School districts may pay such costs from the special reserve
fund of the school district. Any such city, county, political subdivision or
municipality, except a school district, may levy annually at the time of its
levy of taxes an additional tax for such purpose and, in the case of cities,
counties and school districts, for the purpose of paying a portion of the
principal and interest on bonds issued by a city under the authority of
K.S.A. 12-1774, and amendments thereto, which, together with any other
fund available shall be sufficient to provide the cost thereof. Any taxing
subdivision authorized to levy a tax under this section, in lieu of levying
such tax, may pay such costs from any employee benefits contribution
fund established pursuant to K.S.A. 12-16,102, and amendments thereto.
Counties shall provide for coverage of district court officers and employ-
ees whose total salary is payable by counties. Such tax shall not be subject
to any tax levy limit prescribed by article 19 of chapter 79 of the Kansas
Statutes Annotated, or acts amendatory thereof or supplemental thereto.
Taxes levied by counties and cities under the authority of this act shall be
exempt from the limitations imposed under the provisions of K.S.A. 79-
5001 to 79-5016, inclusive, and amendments thereto.

      Sec.  6. K.S.A. 72-4141 is hereby amended to read as follows: 72-
4141. The board of education of any school district may establish a school
textbook rental plan for such grades as are maintained by the district
whereby such board shall purchase school textbooks to be used by the
pupils upon the payment by such pupils of a rental fee. Moneys received
by the board of education under this section shall be deposited in the
textbook and student materials revolving fund of the school district.

      Sec.  7. K.S.A. 72-5390 is hereby amended to read as follows: 72-
5390. (a) The board of education of any school district may prescribe,
assess and collect fees and supplemental charges for:

      (1) The use, rental or purchase by pupils of any of the items desig-
nated in K.S.A. 72-5389, and amendments thereto, to offset, in part or in
total, the expense of purchasing such items; and

      (2) participation in activities, or the use of facilities, materials and
equipment, which participation or use is not mandatory, but optional to
pupils, whether incidental to curricular, extracurricular or other school-
related activities.

      (b) Except as otherwise provided in this section, Moneys received by
a board of education under this section shall be deposited in the general
textbook and student materials revolving fund of the school district and
shall be considered reimbursements to the district for the purpose of the
school district finance and quality performance act and may be expended
whether the same have been budgeted or not and amounts so expended
shall not be considered operating expenses.

      (c) Moneys received by a board of education under this section for
the use, rental or purchase by pupils of any of the items designated in
paragraph (a) of K.S.A. 72-5389, and amendments thereto, may be de-
posited in the revolving fund established by the board for the purpose of
purchasing textbooks under the provisions of article 41 of chapter 72 of
Kansas Statutes Annotated, and the board may expend moneys from such
revolving fund for the purpose of purchasing the items.

      (d) The board of education may establish a revolving fund for the
purpose of purchasing any of the items designated in paragraphs (b)
through (e) of K.S.A. 72-5389, and amendments thereto, and moneys
received by the board of education under this section for use, rental or
purchase by pupils of any of the items may be deposited in such revolving
fund.

      Sec.  8. K.S.A. 72-6409 is hereby amended to read as follows: 72-
6409. (a) ``General fund'' means the fund of a district from which oper-
ating expenses are paid and in which is deposited the proceeds from the
tax levied under K.S.A. 72-6431, and amendments thereto, all amounts
of general state aid under this act, payments under K.S.A. 72-7105a, and
amendments thereto, payments of federal funds made available under
the provisions of title I of public law 874, except amounts received for
assistance in cases of major disaster and amounts received under the low-
rent housing program, and such other moneys as are provided by law.

      (b) ``Operating expenses'' means the total expenditures and lawful
transfers from the general fund of a district during a school year for all
purposes, except expenditures for the purposes specified in K.S.A. 72-
6430, and amendments thereto.

      (c) ``General fund budget'' means the amount budgeted for operating
expenses in the general fund of a district.

      (d) ``Budget per pupil'' means the general fund budget of a district
divided by the enrollment of the district.

      (e) ``Program weighted fund'' means and includes the following funds
of a district: Transportation fund, Vocational education fund, and bilin-
gual education fund.

      (f) ``Categorical fund'' means and includes the following funds of a
district: Special education fund, food service fund, driver training fund,
adult education fund, adult supplementary education fund, area voca-
tional school fund, inservice education fund, parent education program
fund, summer program fund, extraordinary school program fund, and
educational excellence grant program fund.

      Sec.  9. K.S.A. 72-6425 is hereby amended to read as follows: 72-
6425. (a) There is hereby established in every district a fund which shall
be called the transportation fund which fund shall consist of all moneys
deposited therein or transferred thereto according to law. All moneys
received by the district for pupil transportation shall be credited to the
transportation general fund. The expenses of a district attributable to
pupil transportation shall be paid from the transportation general fund.
Any district may transfer moneys from its capital outlay fund to its trans-
portation fund for the purpose of purchasing buses and bus equipment.
If a board determines that any moneys which have been transferred to
its transportation fund from its capital outlay fund are not needed for the
purchase of buses or bus equipment, the board may transfer the moneys
back to the capital outlay fund.

      (b) The provisions of this section shall take effect and be in force
from and after July 1, 1992.

      (b) The transportation fund of each district is hereby abolished. Any
moneys in such fund shall be transferred and credited to the general fund
of the school district.

      Sec.  10. K.S.A. 72-6428 is hereby amended to read as follows: 72-
6428. (a) Any lawful transfer of moneys from the general fund of a district
to any other fund shall be an operating expense in the year the transfer
is made. The board of any district may transfer moneys from the general
fund to any categorical fund of the district in any school year. The board
of any district may transfer moneys from the general fund to any program
weighted fund of the district in any school year, subject to the following
conditions:

      (1) No board shall transfer moneys in any amount from the general
fund to a program weighted fund prior to maturation of the obligation of
the fund necessitating the transfer.

      (2) The board may transfer moneys in an amount not to exceed the
amount of the obligation of the program weighted fund necessitating the
transfer.

      (b) The board of any district may transfer moneys from the general
fund to the technology education fund of the district in any school year,
subject to the conditions imposed upon transferability of moneys from
the general fund to program weighted funds of the district.

      (c) The board of any district may transfer moneys from the general
fund to the contingency reserve fund of the district in any school year,
subject to the limitations imposed upon the amount authorized to be
maintained in the contingency reserve fund under K.S.A. 72-6426, and
amendments thereto.

      (d) (c) The board of any district may transfer moneys from the general
fund to the capital outlay fund of the district in any school year, subject
to the following conditions:

      (1) No board shall transfer moneys in any amount from the general
fund to the capital outlay fund prior to June 1 in any school year.

      (2) The board of any of the districts with 10,000 or more enrollment
may transfer moneys in an amount not to exceed an amount equal to 1%
of the general fund budget.

      (3) The board of any district, other than the districts with 10,000 or
more enrollment, may transfer moneys in an amount not to exceed an
amount equal to 2% of the general fund budget.

      (4) No board shall transfer moneys in any amount from the general
fund to the capital outlay fund in any school year commencing after June
30, 1993, unless such board, in its adopted budget for such year, shall
have budgeted a capital outlay levy at (A) not less than a 3.5 mill rate or
(B) not less than the mill rate necessary to produce the same amount of
money that would have been produced by a 3.5 mill rate in the 1988-89
school year, whichever of (A) or (B) is the greater mill rate.

      (e) Any district may make capital outlay expenditures from the gen-
eral fund for acquisition of equipment and repair of school buildings.

      (f) The provisions of this section shall take effect and be in force from
and after July 1, 1992.

      (d) The board of any district may transfer moneys from the general
fund to the special reserve fund.

      (e) The board of any district may transfer moneys from the general
fund to the special liability expense fund.

      (f) The board of any district may transfer moneys from the general
fund to the textbook and student materials revolving fund.

      Sec.  11. K.S.A. 72-8209 is hereby amended to read as follows: 72-
8209. Whenever any judgment rendered against any school district shall
become becomes final, the governing body thereof shall make a tax levy
board of education may levy a tax at the first tax levying period after such
judgment becomes final, sufficient to pay such amount and for the pur-
pose of paying a portion of the principal and interest on bonds issued by
cities under the authority of K.S.A. 12-1774, and amendments thereto,
for the financing of redevelopment projects upon property located within
the school district and such tax levy may be levied outside of tax levy
limitations prescribed by law. Such tax shall be collected as other school
district taxes, but no execution shall issue on such judgment against the
school district. In case the governing body neglects to levy the tax as
hereinbefore provided, then the judgment creditor may have and recover
a judgment against the officer or officers so in default, for the amount
due him or her on such judgment, with costs. Revenue from such levy
shall be deposited in the special liability expense fund of the school district.

      Sec.  12. K.S.A. 72-8302 is hereby amended to read as follows: 72-
8302. (a) The board of education of a school district may provide or
furnish transportation for pupils who are enrolled in the school district
to or from any school of the school district or to or from any school of
another school district attended by such pupils in accordance with the
provisions of an agreement entered into under authority of K.S.A. 72-
8233, and amendments thereto.

      (b)  (1) When any or all of the conditions specified in this provision
exist, the board of education of a school district shall provide or furnish
transportation for pupils who reside in the school district and who attend
any school of the school district or who attend any school of another
school district in accordance with the provisions of an agreement entered
into under authority of K.S.A. 72-8233, and amendments thereto. The
conditions which apply to the requirements of this provision are as fol-
lows:

      (A) The residence of the pupil is inside or outside the corporate limits
of a city, the school building attended is outside the corporate limits of a
city and the school building attended is more than 21/2 miles by the usually
traveled road from the residence of the pupil; or

      (B) the residence of the pupil is outside the corporate limits of a city,
the school building attended is inside the corporate limits of a city and
the school building attended is more than 21/2 miles by the usually traveled
road from the residence of the pupil; or

      (C) the residence of the pupil is inside the corporate limits of one
city, the school building attended is inside the corporate limits of a dif-
ferent city and the school building attended is more than 21/2 miles by
the usually traveled road from the residence of the pupil.

      (2) The provisions of this subsection are subject to the provisions of
subsections (c) and (d).

      (c) The board of education of every school district is authorized to
adopt rules and regulations to govern the conduct, control and discipline
of all pupils while being transported in school buses. The board may
suspend or revoke the transportation privilege or entitlement of any pupil
who violates any rules and regulations adopted by the board under au-
thority of this subsection.

      (d) The board of education of every school district may suspend or
revoke the transportation privilege or entitlement of any pupil who is
detained at school at the conclusion of the school day for violation of any
rules and regulations governing pupil conduct or for disobedience of an
order of a teacher or other school authority. Suspension or revocation of
the transportation privilege or entitlement of any pupil specified in this
subsection shall be limited to the school day or days on which the pupil
is detained at school. The provisions of this subsection do not apply to
any pupil who has been determined to be an exceptional child, except
gifted children, under the provisions of the special education for excep-
tional children act.

      (e)  (1) Subject to the limitations specified in this subsection, the
board of education of any school district may prescribe and collect fees
to offset, totally or in part, the costs incurred for the provision or fur-
nishing of transportation for pupils. The limitations which apply to the
authorization granted by this subsection are as follows:

      (A) Fees for the provision or furnishing of transportation for pupils
shall be prescribed and collected only to recover the costs incurred as a
result of and directly attributable to the provision or furnishing of trans-
portation for pupils and only to the extent that such costs are not reim-
bursed from any other source provided by law;

      (B) fees for the provision or furnishing of transportation may not be
assessed against or collected from any pupil who is counted in determin-
ing the transportation weighting of the school district under the provisions
of the school district finance and quality performance act or any pupil
who is determined to be a child with disabilities under the provisions of
the special education for exceptional children act or any pupil who is
eligible for free or reduced price meals under the national school lunch
act or any pupil who is entitled to transportation under the provisions of
subsection (a) of K.S.A. 72-8306, and amendments thereto, and who re-
sides 21/2 miles or more by the regular route of a school bus from the
school attended;

      (C) fees for the provision or furnishing of transportation for pupils in
accordance with the provisions of an agreement entered into under au-
thority of K.S.A. 72-8233 or 72-8307, and amendments thereto, shall be
controlled by the provisions of the agreement.

      (2) All moneys received by a school district from fees collected under
this subsection shall be deposited in the transportation general fund of
the district.

      Sec.  13. K.S.A. 72-8316 is hereby amended to read as follows: 72-
8316. (a) Any board of education, pursuant to a policy developed and
adopted by it, may provide for the use of district-owned or leased school
buses when such buses are not being used for regularly required school
purposes. The policy may provide for:

      (1)  (A) Transporting parents and other adults to or from school-re-
lated functions or activities, (B) transporting pupils to or from functions
or activities sponsored by organizations, the membership of which is prin-
cipally composed of children of school age, and (C) transporting persons
engaged in field trips in connection with their participation in an adult
education program maintained by the transporting school district or by
any other school district, within or outside the boundaries of the trans-
porting school district; and

      (2) contracting with (A) the governing body of any township, city or
county for transportation of individuals, groups or organizations, (B) the
governing authority of any nonpublic school for transportation of pupils
attending such nonpublic school to or from interschool or intraschool
functions or activities, (C) the board of trustees of any community college
for transportation of students enrolled in such community college to or
from attendance at class at the community college or to and from func-
tions or activities of the community college, (D) a public recreation com-
mission established and operated under the laws of this state, for any
purposes related to the operation of the recreation commission and all
programs and services thereof, (E) the board of education of any other
school district for transportation, on a cooperative and shared-cost basis,
of pupils, school personnel, parents and other adults to or from school-
related functions or activities, or (F) a four-year college or university, area
vocational school or area vocational-technical school for transportation of
students to or from attendance at class at the four-year college or uni-
versity, area vocational school or area vocational-technical school or for
transportation of students, alumni and other members of the public to or
from functions or activities of the four-year college or university, area
vocational school or area vocational-technical school.

      (b) The costs related to the use of school buses under authority of
this section shall not be considered in determining the transportation
weighting of a school district under article 64 of chapter 72 of Kansas
Statutes Annotated.

      (c) Transportation fees may be charged by the board to offset, totally
or in part, the costs incurred for the use of school buses under authority
of this section.

      (d) Any revenues received by a board of education as transportation
fees or under any contract entered into pursuant to this section shall be
deposited in the transportation general fund of the district and shall be
considered reimbursements to the district for the purpose of the school
district finance and quality performance act. Such revenues may be ex-
pended whether the same have been budgeted or not.

      (e) The provisions of subsection (c) of K.S.A. 8-1556, and amend-
ments thereto, apply to the use of school buses under authority of this
section.

      Sec.  14. K.S.A. 72-8317 is hereby amended to read as follows: 72-
8317. (a) The board of education of any school district, pursuant to a
policy developed and adopted by the board, may provide that whenever
the school district furnishes school bus transportation for pupils of the
school district to or from attendance at class in an area vocational school,
area vocational-technical school, technical college, community college, or
four-year college or university, adults who are students enrolled at any
such educational institution may be furnished such school bus transpor-
tation to or from attendance at class, on a space available basis, along with
the pupils of the school district. Whenever any school district shall furnish
transportation for adult students pursuant to a policy adopted under au-
thority of this section, such transportation shall be furnished subject to
such terms and conditions as the board of education of the school district
shall impose.

      (b) Fees for the furnishing of transportation for adult students pur-
suant to a policy adopted under authority of this section may be charged
such adult students to offset, totally or in part, any costs incurred by a
school district in the furnishing of such transportation, or such transpor-
tation may be furnished free of charge. Any revenues received by a board
of education as fees charged adult students for transportation furnished
under authority of this section shall be deposited in the transportation
general fund of the district and may be expended whether the same have
been budgeted or not.

      Sec.  15. K.S.A. 72-8415a is hereby amended to read as follows: 72-
8415a. (a) If the board of education of any school district elects to act as
a self-insurer for the provision of health care services, disability income
benefits or a group life insurance benefit as authorized by K.S.A. 72-8414,
and amendments thereto, the board shall make payments for claims, judg-
ments and expenses for health care services, disability income benefits or
group life insurance benefits, whichever is applicable from the special
reserve fund of the school district.

      The board of education may enter into a trust agreement with any
corporate entity having the powers of a trust company within the state of
Kansas, and may transfer from time to time amounts held in the special
reserve fund to the custody of the trustee for safeguarding and investment.
Any such trust agreement may grant the trustee the power to exercise
such fiscal management and administrative control as may be necessary
for the lawful and efficient management of any such amounts transferred
to the custody of the trustee.

      (b) If the board of education of any school district or the board of
trustees of any community college elects to act as a self-insurer for the
provision of health care services or, disability income benefits, or a group
life insurance benefit, or all three, as authorized by K.S.A. 72-8414, and
amendments thereto, it shall by resolution the board shall create a sep-
arate health care services reserve fund or disability income benefits re-
serve fund, or a separate group life insurance benefit reserve fund, or all
three, in the budget of the school district or community college, which-
ever is applicable, which shall be reserve funds for the payments of claims,
judgments and expenses for health care services or disability income ben-
efits or group life insurance benefits, whichever is applicable. Any balance
remaining in any such reserve fund at the end of the fiscal year shall be
carried forward into that reserve fund for succeeding fiscal years. No such
fund shall be subject to the provisions of K.S.A. 79-2925 through 79-2937,
and amendments thereto, except that. In preparing the budget of such
school district or community college, the amounts credited to and the
amount on hand in any such reserve fund, and the amount expended
therefrom shall be included in the annual budget for the information of
the residents. Interest earned on the investment of moneys in any such
fund shall be credited to that fund.

      (b) In the discretion of the board of education or The board of trus-
tees, it may enter into a trust agreement with any corporate entity having
the powers of a trust company within the state of Kansas, and may transfer
from time to time amounts held in the health care services reserve fund
or the disability income benefits reserve fund, or the group life insurance
benefit reserve fund, or all three, to the custody of the trustee for safe-
guarding and investment. Any such trust agreement may grant the trustee
the power to exercise such fiscal management and administrative control
as may be necessary for the lawful and efficient management of any such
amounts transferred to the custody of the trustee.

      Sec.  16. K.S.A. 72-8415b is hereby amended to read as follows: 72-
8415b. (a) Any school district or community college that elects to become
a self-insurer under the provisions of K.S.A. 72-8414, and amendments
thereto, may transfer such amounts moneys from its general fund to the
health care services reserve fund or the disability income benefits reserve
fund, or the group life benefit reserve fund, or all three, as may be
deemed necessary to meet the cost of health care services or disability
income benefits, or group life insurance claims, whichever is applicable
special reserve fund of the district as provided by K.S.A. 72-6428, and
amendments thereto.

      (b) Any community college that elects to become a self-insurer under
the provisions of K.S.A. 72-8414, and amendments thereto, may transfer
such amounts from its general fund to the health care services reserve
fund or the disability income benefits reserve fund, or the group life ben-
efit reserve fund, or all three, as may be deemed necessary to meet the
cost of health care services or disability income benefits, or group life
insurance claims, whichever is applicable.

      Sec.  17. K.S.A. 75-6110 is hereby amended to read as follows: 75-
6110. (a) Except as provided for school districts, payments by municipal-
ities for the cost of providing for its defense and the defense of employees
pursuant to this act and for the payment of claims and other direct and
indirect costs resulting from the implementation of this act may be paid
from the general or other existing fund of such municipality or from a
special liability expense fund established for such purpose pursuant to
subsection (b). School districts shall make such payments from the special
liability expense fund of the school district.

      (b) Whenever the governing body of any municipality shall determine
that it is advisable to establish a special fund for the payment of such
costs and to establish a reserve therefor, in lieu of paying the same out
of the general or other existing fund of the municipality, such governing
body may create and establish a special liability expense fund for the
payment of such costs and may place therein any moneys received by the
municipality from any source whatsoever which may be lawfully utilized
for such purpose including the proceeds of tax levies hereinafter author-
ized and provided. Such fund shall not be subject to the provisions of
K.S.A. 79-2925 to 79-2937, inclusive, and any acts amendatory thereof or
supplemental thereto, except that through 79-2937, and amendments
thereto. In making the budget of such municipality, the amounts credited
to and the amount on hand in such special fund, and the amount ex-
pended therefrom, shall be included in the annual budget for the infor-
mation of the residents of such municipality.

      (c) Whenever the governing body of any municipality which is au-
thorized by law to levy taxes upon property has established a special lia-
bility expense fund under the provisions of this section and shall deter-
mine determines that moneys from other sources will be insufficient to
pay such costs, the governing body is hereby authorized to may levy an
annual tax upon all taxable tangible property within the municipality in
an amount determined by the governing body to be necessary for such
purpose and in the case of cities, counties and school districts and coun-
ties, to pay a portion of the principal and interest on bonds issued by cities
under the authority of K.S.A. 12-1774, and amendments thereto, for the
financing of redevelopment projects upon property located in such city
or county or such school district.

      Sec.  18. K.S.A. 79-2926 is hereby amended to read as follows: 79-
2926. (a) Subject to the provisions of subsection (b), the director of ac-
counts and reports shall prepare and prescribe forms for the annual budg-
ets of all taxing subdivisions or municipalities of the state. Such forms
shall show the information required by this act and by K.S.A. 1973 Supp.
79-4401 et seq., necessary and proper to fully disclose complete infor-
mation as to the financial condition of such taxing subdivision or munic-
ipality, and the receipts and expenditures thereof, both past and antici-
pated.

      (b)  (1) From and after July 1, 2004 and based upon recommendations
by the state department of education, the director shall prepare and pre-
scribe forms for the annual budget and a summary of the proposed budget
of school districts. The state department of education shall make such
recommendations after considering the best practices and standards es-
tablished by the government finance officers association and the associ-
ation of school business officials.

      (2)  (A) The school district budget form shall include a separate table
outlining the aggregate amount of expenditures for salaries and wages for
the following categories:

      (i) Certified and noncertified administrators;

      (ii) persons employed full-time as teachers;

      (iii) other certified employees who are not employed full-time as
teachers;

      (iv) classified employees;

      (v) other positions designated by the state department of education;
and

      (vi) substitutes and other temporary employees.

      (B) The school district budget form shall show the number of full-time
employee positions specified in paragraph (A) of this subsection and the
average salaries or wages for such positions.

      (C) The school district budget form shall show any other information
recommended by the state department of education.

      (3) The summary of the proposed budget form shall include:

      (A) An overview of the proposed budget of the school district and the
budgetary process;

      (B) a summary of the changes in the proposed budget from the pre-
vious budget year;

      (C) a summary of the estimated expenditures to be made and revenues
to be received in the ensuing budget year and the sources of such revenue;

      (D) the internet website address for school building report cards com-
piled by the state department of education; and

      (E) any other information specified by the state department of edu-
cation.

      (4) Nothing in this subsection (b) shall be construed as limiting the
authority of school districts to develop and provide material or informa-
tion in addition to that required by the state department of education.

      (5) The state department of education shall provide technical advice
and assistance to school districts to insure compliance with the provisions
of this section.

      (c) All such budget and tax levy forms shall be printed by the director
division of printing and in such quantity as required by the director. The
director shall deliver the forms for all school districts to the clerk of the
board of education of each school district. The forms for all other taxing
subdivisions or municipalities of the state shall be delivered by the direc-
tor to the county clerk of each county, who shall immediately deliver the
same to the presiding officer of the governing body of the said respective
taxing subdivisions or municipalities within the county. Whenever in ar-
ticle 29 of chapter 79 of Kansas Statutes Annotated the words state au-
ditor or auditor of state, or words of like effect, occur, the same shall
mean director of accounts and reports.

      Sec.  19. K.S.A. 79-2927 is hereby amended to read as follows: 79-
2927. (a) The governing body of each taxing subdivision or municipality
shall meet not later than the first day of August of each year, and shall
prepare in writing on forms furnished by the director of accounts and
reports a budget itemized and classified by funds and showing amounts
to be raised by taxation and from other sources for the ensuing budget
year. The budget shall show in parallel columns all amounts and items to
be expended for the ensuing budget year and the amounts appropriated
for corresponding or other items during the current budget year and
amounts expended for corresponding or other items during the preceding
budget year. The budget for each fund shall not include any item for
sundry or miscellaneous purposes in excess of 10% of the total. Except
for school districts, municipal universities and community colleges, the
budget for each fund may include a non-appropriated balance of not to
exceed 5% of the total of each fund.

      (b) The budget shall show in parallel columns the amount of revenue
actually received from taxation and from other sources, with the amount
from each source separately stated for the preceding budget year and the
amount actually received and estimated to be received from taxation and
from sources other than direct taxation with the amount for each source
separately stated for the current budget year and also the amount esti-
mated to be received during the ensuing budget year, with the amount
estimated to be received from each source separately stated. Except as
provided by section 20, and amendments thereto, the budget of expend-
itures for each fund shall balance with the budget of revenues for such
fund and that portion of the budget of revenues to be derived from ad
valorem property taxation shall not exceed the amount of tax which can
be raised by any fund limit or aggregate limit placed upon such fund.

      New Sec.  20. (a) When preparing the budget for a school district,
the board of education of the district shall budget to expend only the
amount estimated to be spent from each fund of the school district.

      (b) Except as provided by this subsection, any unexpended moneys
remaining in a fund of a school district at the end of the budget year may
be carried forward into such fund for succeeding budget years. The pro-
visions of this subsection shall not apply to the general fund or the sup-
plemental general fund of the school district.

      (c) Whenever unexpended moneys in a school district fund are car-
ried forward into such fund for the succeeding budget year, the budget
of the school district shall reflect the ending balance in such fund which
the school district estimates will be carried forward to the succeeding
budget year.

      (d) If the board of education determines it is necessary to expend
moneys which had been budgeted to be carried forward into the next
succeeding budget year, the board shall amend its previously adopted
budget. Any amended budget shall be subject to the same publication,
notice and public hearing requirements as is required by K.S.A. 79-2929,
and amendments thereto, for the adoption of the original budget.

      New Sec.  21. (a) Each year the board of education of a school district
shall prepare a budget and a summary of the proposed budget. Such
budget and summary shall be in the form prescribed by the director
pursuant to K.S.A. 79-2926, and amendments thereto.

      (b) The budget and the summary of the proposed budget shall be on
file at the administrative offices of the school district. Copies of such
budget and summary shall be available upon request.

      (c) The notice required to be published by K.S.A. 79-2929, and
amendments thereto, shall include a statement that the budget and the
summary of the proposed budget is on file at the administrative offices
of the district and that copies of such budget and summary are available
upon request.

      New Sec.  22. (a) From and after July 1, 2004, each year the board
of education of a school district shall prepare a profile of the school dis-
trict. The profile shall include any information specified by the state de-
partment of education to be included in such profile, including but not
limited to, information relating to the governing body of the school dis-
trict, an overview of the budget of the school district adopted by the board
pursuant to K.S.A. 79-2925 through 79-2935, and amendments thereto,
and the budgetary process.

      (b) The profile of the school district shall be on file at the adminis-
trative offices of the school district. Copies of the profile of the school
district shall be available upon request.

      (c) The notice required to be published by K.S.A. 79-2929, and
amendments thereto, shall include a statement that a profile of the school
district will be on file at the administrative offices of the district after the
board adopts the budget for the ensuing budget year and that copies of
the profile will be available upon request.

      Sec.  23. K.S.A. 12-1663 is hereby amended to read as follows: 12-
1663. (a) Where any public agency receives federal aid through any fed-
eral agency for any purpose to be used alone or with funds of the public
agency, such federal aid may be expended without regard to budget lim-
itations and over, above or outside the budget, and such expenditures
shall not be charged against the budget of the current or any other budget
year of the public agency; and. Where a public agency spends from budg-
eted funds and later is reimbursed by federal aid, such expenditure from
budgeted funds shall be a reimbursed expense and if received after the
budget year, shall increase the current budget to the same amount unless
the budget had anticipated and included the reimbursement as income.

      (b) In addition to the requirements of subsection (a), a school district
shall include all revenues and expenditures, including, but not limited to,
federal aid and other grants, gifts and miscellaneous income, in all budget
documents prepared by the school district, including documents submit-
ted to the department of education. In order to account for such revenues
and expenditures separately, each school district shall budget for federal
aid and other grants and gifts, other than scholarships, received, which
funds shall not be subject to limitations on the expenditure of moneys in
such funds.

      Sec.  24. K.S.A. 72-8223 is hereby amended to read as follows: 72-
8223. (a) The secretary of social and rehabilitation services shall pay tui-
tion to the board of education of any school district for children in any
institution under the jurisdiction of the secretary who attend any of the
schools of such school district. The amount of tuition shall be determined
on the basis of the average operating cost per pupil of the school district,
less the proportionate amount of state aid received by such school district
as determined by the state board of education. Whenever feasible, the
board of education of such school district shall work with the department
of social and rehabilitation services to maximize federal matching funds.


      (b) Payments of tuition received under this section by the board of
education of any school district for attendance of children at school in
regular educational programs shall be deposited in the general fund of
the school district and considered as reimbursements of the district for
the purpose of the school district finance and quality performance act.
tuition reimbursement fund.

      (c) There is hereby established in every district a fund which shall be
called the tuition reimbursement fund, which fund shall consist of all
moneys deposited therein or transferred thereto according to law. The
expenses of a district attributable to the costs of providing educational
services to a child in an institution under the jurisdiction of the secretary
who attends the school shall be paid from the tuition reimbursement fund.

 Sec.  25. K.S.A. 12-1663, 12-2615, 44-505c, 72-3703, 72-4141, 72-
5390, 72-6409, 72-6425, 72-6428, 72-8209, 72-8223, 72-8302, 72-8316,
72-8317, 72-8415a, 72-8415b, 75-6110, 79-2926 and 79-2927 are hereby
repealed.

 Sec.  26. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 21, 2003.
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