CHAPTER 139 SENATE Substitute for HOUSE BILL No. 2399 (Amends Chapter 25) An Act concerning school districts; relating to the powers and duties thereof; relating to
the financing thereof; amending K.S.A. 10-1116a, as amended by section 2 of 2003
Senate Bill No. 4, 72-6417, 72-6431 and 72-6434 and K.S.A. 2002 Supp. 79-201x and
repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 10-1116a, as amended by section 2 of 2003 Senate
Bill No. 4, is hereby amended to read as follows: 10-1116a. The limitations
on expenditures imposed under the cash-basis law shall not apply to:

      (a) Expenditures in excess of current revenues made for municipally
owned and operated utilities out of the fund of such utilities caused by,
or resulting from the meeting of, extraordinary emergencies including
drought emergencies. In such cases expenditures in excess of current
revenues may be made by declaring an extraordinary emergency by res-
olution adopted by the governing body and such resolution shall be pub-
lished at least once in a newspaper of general circulation in such city.
Thereupon, such governing body may issue interest bearing no-fund war-
rants on such utility fund in an amount, including outstanding previously
issued no-fund warrants, not to exceed 25% of the revenues from sales
of service of such utility for the preceding year. Such warrants shall be
redeemed within three years from date of issuance and shall bear interest
at a rate of not to exceed the maximum rate of interest prescribed by
K.S.A. 10-1009, and amendments thereto. Upon the declaration of a
drought emergency, the governing body may issue such warrants for wa-
ter system improvement purposes in an amount not to exceed 50% of the
revenue received from the sale of water for the preceding year. Such
warrants shall be redeemed within five years from the date of issuance
and shall bear interest at a rate not to exceed the maximum rate of interest
prescribed by K.S.A. 10-1009, and amendments thereto.

      (b) Expenditures in any month by school districts which are in excess
of current revenues if the deficit or shortage in revenues is caused by, or
a result of, the late distribution payment of state aid after the date pre-
scribed for the payment of state aid during such month under K.S.A. 72-
6417 or 72-6434, and amendments thereto.

      The provisions of this subsection shall apply to expenditures made in
school year 2001-2002, school year 2002-2003, school year 2003-2004,
school year 2004-2005, school year 2005-2006 and school year 2006-2007.

      Sec.  2. K.S.A. 72-6417 is hereby amended to read as follows: 72-
6417. (a) The distribution of general state aid under this act shall be made
in accordance with appropriation acts each year as provided in this sec-
tion.

      (b)  (1) In the months of July through May of each school year, the
state board shall determine the amount of general state aid which will be
required by each district to maintain operations in each such month. In
making such determination, the state board shall take into consideration
the district's access to local effort sources and the obligations of the gen-
eral fund which must be satisfied during the month. The amount deter-
mined by the state board under this provision is the amount of general
state aid which will be distributed to the district in the months of July
through May;

      (2) in the month of June of each school year, subject to the provisions
of subsection (d), payment shall be made of the full amount of the general
state aid entitlement determined for the school year, less the sum of the
monthly payments made in the months of July through May.

      (c) The state board of education shall prescribe the dates upon which
the distribution of payments of general state aid to school districts shall
be due. Payments of general state aid shall be distributed to districts once
each month at a time to be determined on the dates prescribed by the
state board. The state board shall certify to the director of accounts and
reports the amount due as general state aid to each district in each of the
months of July through June. Such certification, and the amount of gen-
eral state aid payable from the state general fund, shall be approved by
the director of the budget. The director of accounts and reports shall
draw warrants on the state treasurer payable to the district treasurer of
each district entitled to payment of general state aid, pursuant to vouchers
approved by the state board. Upon receipt of such warrant, each district
treasurer shall deposit the amount of general state aid in the general fund,
except that, an amount equal to the amount of federal impact aid not
included in the local effort of a district may be disposed of as provided
in subsection (a) of K.S.A. 72-6427, and amendments thereto.

      (d) If any amount of general state aid that is due to be paid during
the month of June of a school year pursuant to the other provisions of this
section is not paid on or before June 30 of such school year, then such
payment shall be paid on or after the ensuing July 1, as soon as moneys
are available therefor. Any payment of general state aid that is due to be
paid during the month of June of a school year and that is paid to school
districts on or after the ensuing July 1 shall be recorded and accounted
for by school districts as a receipt for the school year ending on the pre-
ceding June 30.

      Sec.  3. K.S.A. 72-6434 is hereby amended to read as follows: 72-
6434. (a) In each school year, each district that has adopted a local option
budget is eligible for entitlement to an amount of supplemental general
state aid. Entitlement of a district to supplemental general state aid shall
be determined by the state board as provided in this subsection. The state
board shall:

      (1) Determine the amount of the assessed valuation per pupil in the
preceding school year of each district in the state;

      (2) rank the districts from low to high on the basis of the amounts of
assessed valuation per pupil determined under (1);

      (3) identify the amount of the assessed valuation per pupil located at
the 75th percentile of the amounts ranked under (2);

      (4) divide the assessed valuation per pupil of the district in the pre-
ceding school year by the amount identified under (3);

      (5) subtract the ratio obtained under (4) from 1.0. If the resulting
ratio equals or exceeds 1.0, the eligibility of the district for entitlement
to supplemental general state aid shall lapse. If the resulting ratio is less
than 1.0, the district is entitled to receive supplemental general state aid
in an amount which shall be determined by the state board by multiplying
the amount of the local option budget of the district by such ratio. The
product is the amount of supplemental general state aid the district is
entitled to receive for the school year.

      (b) If the amount of appropriations for supplemental general state
aid is less than the amount each district is entitled to receive for the school
year, the state board shall prorate the amount appropriated among the
districts in proportion to the amount each district is entitled to receive.

      (c) The state board of education shall prescribe the dates upon which
the distribution of payments of supplemental general state aid to school
districts shall be due. Payments of supplemental general state aid shall
be distributed to districts at a time to be determined on the dates pre-
scribed by the state board. The state board shall certify to the director of
accounts and reports the amount due each district, and the director of
accounts and reports shall draw a warrant on the state treasurer payable
to the treasurer of the district. Upon receipt of the warrant, the treasurer
of the district shall credit the amount thereof to the supplemental general
fund of the district to be used for the purposes of such fund.

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

      (d) If any amount of supplemental general state aid that is due to be
paid during the month of June of a school year pursuant to the other
provisions of this section is not paid on or before June 30 of such school
year, then such payment shall be paid on or after the ensuing July 1, as
soon as moneys are available therefor. Any payment of supplemental gen-
eral state aid that is due to be paid during the month of June of a school
year and that is paid to school districts on or after the ensuing July 1 shall
be recorded and accounted for by school districts as a receipt for the
school year ending on the preceding June 30.

      New Sec.  4. Whenever a school district is required by law to make
any payment during the month of June and there is insufficient revenue
to make such payment as a result of the payment of state aid after the
date prescribed by the state board of education pursuant to K.S.A. 72-
6417 or 72-6434, and amendments thereto, the school district shall make
such payment as soon as moneys are available.

      New Sec.  5. (a) If the proposition to consolidate school districts is
approved as provided in K.S.A. 72-8704, and amendments thereto, the
temporary board of education specified in the agreement pursuant to
K.S.A. 72-8702, and amendments thereto, shall have the power to enter
into contracts, adopt resolutions and take other such actions as it deems
necessary to provide for the maintenance, finance and operation of the
consolidated unified school district. The temporary board shall have the
power to recognize a professional employees' organization for the purpose
of professional negotiation. The temporary board shall have the power to
enter into contracts of employment for all personnel it deems necessary
for operation of the consolidated unified school district.

      (b) No powers granted pursuant to this section shall be exercised
sooner than 90 days prior to the effective date of the consolidation of
such school districts.

      Sec.  6. K.S.A. 72-6431 is hereby amended to read as follows: 72-
6431. (a) The board of each district shall levy an ad valorem tax upon the
taxable tangible property of the district in the school years specified in
subsection (b) for the purpose of:

      (1) Financing that portion of the district's general fund budget which
is not financed from any other source provided by law;

      (2) paying a portion of the costs of operating and maintaining public
schools in partial fulfillment of the constitutional obligation of the legis-
lature to finance the educational interests of the state; and

      (3) with respect to any redevelopment district established prior to
July 1, 1997, pursuant to K.S.A. 12-1771, and amendments thereto, pay-
ing a portion of the principal and interest on bonds issued by cities under
authority of K.S.A. 12-1774, and amendments thereto, for the financing
of redevelopment projects upon property located within the district.

      (b) The tax required under subsection (a) shall be levied at a rate of
20 mills in the 2001-02 school year and in the 2002-03 school year school
year 2003-2004 and school year 2004-2005.

      (c) The proceeds from the tax levied by a district under authority of
this section, except the proceeds of such tax levied for the purpose of
paying a portion of the principal and interest on bonds issued by cities
under authority of K.S.A. 12-1774, and amendments thereto, for the fi-
nancing of redevelopment projects upon property located within the dis-
trict, shall be deposited in the general fund of the district.

      (d) On June 1 of each year, the amount, if any, by which a district's
local effort exceeds the amount of the district's state financial aid, as
determined by the state board, shall be remitted to the state treasurer.
Upon receipt of any such remittance, the state treasurer shall deposit the
same in the state treasury to the credit of the state school district finance
fund.

      (e) No district shall proceed under K.S.A. 79-1964, 79-1964a or 79-
1964b, and amendments thereto.

      Sec.  7. K.S.A. 2002 Supp. 79-201x is hereby amended to read as fol-
lows: 79-201x. For taxable years 2001 and 2002 2003 and 2004, the fol-
lowing described property, to the extent herein specified, shall be and is
hereby exempt from the property tax levied pursuant to the provisions of
K.S.A. 72-6431, and amendments thereto: Property used for residential
purposes to the extent of $20,000 of its appraised valuation.

 Sec.  8. K.S.A. 10-1116a, as amended by section 2 of 2003 Senate Bill
No. 4, 72-6417, 72-6431 and 72-6434 and K.S.A. 2002 Supp. 79-201x are
hereby repealed.

 Sec.  9. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved May 12, 2003.
 Published in the Kansas Register May 15, 2003.
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