Session Law

Identifying Information:L. 2003 ch. 154
Other Identifying Information:2003 Senate Bill 285
Tax Type:Other
Brief Description:An Act concerning the department of commerce and housing; relating to changing the name of such agency; relating to other changes required by 2003 ERO 30; amending K.S.A. 2-3602, 12-1770a, as amended by section 1 of 2003 Senate Substitute for House Bill No. 2208, 12-1771b, 12-1771d, 12-1774, as amended by section 4 of 2003 Senate Substitute for House Bill No. 2208, 12-5242, 32-873, 32-874a, 32-874b, 32-874d, 32- 874e, 39-1605, 65-5721, 72-4436, 72-4437, 73-2402, 73-2404, 74-520a, 74-567, 74-575, 74-2622, 74-2916, 74-32,151, 74-4911f, 74-5002o, 74-5049, 74-5073, 74-5074, 74-5082, 74-5084, 74-5086a, 74-5089, 74-5091, 74-5095, 74-5096, 74-5097, 74-50,103, 74-50,104, 74-50,105, 74-50,106, 74-50,107, 74-50,108, 74-50,109, 74-50,110, 74-50,111, 74-50,114, 74-50,115, 74-50,131, 74-50,133, 74-50,134, 74-50,151, 74-50,152, 74-50,153,
74-50,156, 74-50,157, 74-50,158, 74-50,159, 74-50,160, 74-50,162, 74-50,163, 74-7295, 74-8001, 74-8002, 74-8004, 74-8005, 74-8006, 74-8007, 74-8010, 74-8101, 74-8221, 74-8405, 74-8831, 74-8904, 74-8928, 74-8930, 74-8942, 74-8943, 74-9001, as amended by section 1 of 2003 House Bill No. 2106, 74-9002, 74-9003, 74-9004, 74-9005, 74-9201 and 79-32,198 and K.S.A. 2002 Supp. 2-1921, 40-4702, 58-1401, 58-1405, 58-1406, 58-1407, 75-2935, 79-213, 79-251, 79-3271, 79-3271a, 79-32,160a, 79-32,197a, 79-3620, as amended by section 5 of 2003 Senate Substitute for House Bill No. 2208, 79-3620b and 79-3710, as amended by section 8 of 2003 Senate Substitute for House Bill No. 2208, and section 2 of 2003 Senate Substitute for House Bill No. 2208 and section 16 of 2003 Senate Bill No. 237 and repealing the existing sections; also repealing K.S.A. 74-5002f, 74-5002g, 74-5002h, 74-5002i, 74-5002j, 74-5002k, 74-5002n, 74-5083 and 4-5085.
Keywords:


Body:
CHAPTER 154

SENATE BILL No. 285

(Amends Chapters 83, 97 and 136)


An Act concerning the department of commerce and housing; relating to changing the
name of such agency; relating to other changes required by 2003 ERO 30; amending
K.S.A. 2-3602, 12-1770a, as amended by section 1 of 2003 Senate Substitute for House
Bill No. 2208, 12-1771b, 12-1771d, 12-1774, as amended by section 4 of 2003 Senate
Substitute for House Bill No. 2208, 12-5242, 32-873, 32-874a, 32-874b, 32-874d, 32-
874e, 39-1605, 65-5721, 72-4436, 72-4437, 73-2402, 73-2404, 74-520a, 74-567, 74-575,
74-2622, 74-2916, 74-32,151, 74-4911f, 74-5002o, 74-5049, 74-5073, 74-5074, 74-5082,
74-5084, 74-5086a, 74-5089, 74-5091, 74-5095, 74-5096, 74-5097, 74-50,103, 74-50,104,
74-50,105, 74-50,106, 74-50,107, 74-50,108, 74-50,109, 74-50,110, 74-50,111, 74-
50,114, 74-50,115, 74-50,131, 74-50,133, 74-50,134, 74-50,151, 74-50,152, 74-50,153,
74-50,156, 74-50,157, 74-50,158, 74-50,159, 74-50,160, 74-50,162, 74-50,163, 74-7295,
74-8001, 74-8002, 74-8004, 74-8005, 74-8006, 74-8007, 74-8010, 74-8101, 74-8221, 74-
8405, 74-8831, 74-8904, 74-8928, 74-8930, 74-8942, 74-8943, 74-9001, as amended by
section 1 of 2003 House Bill No. 2106, 74-9002, 74-9003, 74-9004, 74-9005, 74-9201
and 79-32,198 and K.S.A. 2002 Supp. 2-1921, 40-4702, 58-1401, 58-1405, 58-1406, 58-
1407, 75-2935, 79-213, 79-251, 79-3271, 79-3271a, 79-32,160a, 79-32,197a, 79-3620, as
amended by section 5 of 2003 Senate Substitute for House Bill No. 2208, 79-3620b and
79-3710, as amended by section 8 of 2003 Senate Substitute for House Bill No. 2208,
and section 2 of 2003 Senate Substitute for House Bill No. 2208 and section 16 of 2003
Senate Bill No. 237 and repealing the existing sections; also repealing K.S.A. 74-5002f,

74-5002g, 74-5002h, 74-5002i, 74-5002j, 74-5002k, 74-5002n, 74-5083 and 74-5085.


Be it enacted by the Legislature of the State of Kansas:

Section 1. On and after July 1, 2003, K.S.A. 2002 Supp. 2-1921 is
hereby amended to read as follows: 2-1921. (a) There is hereby created
the Kansas natural resource legacy alliance.
(b) The alliance shall consist of the following appointed members all
of whom shall be residents of the state of Kansas:
(1) The president of the senate or the president of the senate's des-
ignee, and two additional members appointed by the president of the
senate, two of whom shall be landowners who own at least 160 acres of
Kansas farm or ranch land and are principally engaged in production
agriculture;
(2) the minority leader of the senate or the minority leader of the
senate's designee and one additional member appointed by the minority
leader of the senate who shall be a landowner who owns at least 160 acres
and is principally engaged in production agriculture;
(3) the chairman of the senate committee on natural resources or the
chairman of the senate committee on natural resources' designee pro-
vided that such designee is a member of the legislature of the state of
Kansas;
(4) the speaker of the ho use of representatives or the speaker of the
house of representative's designee, and two additional members ap-
pointed by the speaker of the house of representatives, two of whom shall
be landowners who own at least 160 acres of Kansas farm or ranch land
and are principally engaged in production agriculture;
(5) the minority leader of the house of representatives or the minority
leader of the house of representative's designee and one additional mem-
ber appointed by the minority leader of the house of representatives who
shall be a landowner who owns at least 160 acres and is principally en-
gaged in production agriculture;
(6) the chairman of the house committee on environment or the
chairman of the house committee on environment's designee provided
that such designee is a member of the legislature of the state of Kansas;
and
(7) three members appointed by the governor, at least two of which
shall be landowners who own at least 160 acres of Kansas farm or ranch
land and are principally engaged in production agriculture.
(c) The following shall be nonvoting advisors to the members of the
alliance:
(1) The secretary of wildlife and parks or the secretary's designee;
(2) the secretary of agriculture or the secretary's designee;
(3) the executive director of the state conservation commission or the
executive director's designee;
(4) the secretary of health and environment or the secretary's desig-
nee;
(5) the director of the Kansas water office or the director's designee;
(6) the state forester or the state forester's designee;
(7) the secretary of commerce
and housing or the secretary of com-
merce and housing's
secretary's designee;
(8) the president of the Kansas farm bureau or the president's des-
ignee; and
(9) the president of the Kansas livestock association or the president's
designee.
(d) Officers making appointments pursuant to subsection (b) shall
consult and coordinate among themselves in making the appointments in
order to achieve a membership that represents a balance of knowledge
and experience among interests in natural resources, environmental in-
terests and related economic interests, including parks and recreation,
soil and water conservation, travel and tourism, economic development,
agriculture, outdoor recreation, landowners and homeowners, fish and
wildlife, forest resources, prairie and grassland resources and municipal-
ities. At least two such members shall represent environmental interests.
In making the appointments, the officers shall solicit and allow an op-
portunity for recommendations by interested groups and individual citi-
zens.
Sec. 2. On and after July 1, 2003, K.S.A. 2-3602 is hereby amended
to read as follows: (a) There is hereby created the Kansas agricultural
seed council.
(b) The council shall consist of seven members who will be elected
at the annual meeting of the Kansas seed industry association. The board
of directors of the Kansas seed industry association shall act as interim
council members until council members can be elected and qualified.
Vacancies which may occur shall be filled for unexpired terms by the
board of directors of the Kansas seed industry association from among
the seedsmen or representatives of seed product development, distribu-
tion and production of the state. Each council member appointed on and
after the effective date of this act, other than a council member appointed
to fill a vacancy for an unexpired term, shall be elected for a term of four
years except that three of the council members first elected on and after
the effective date of this act shall be elected for a term of two years. No
member may serve more than two consecutive terms. Upon the expiration
of a term of a member of the council, such member shall continue to
serve as a member of the council until a successor to such member is
elected and qualified.
(c) Members of the council shall be residents of this state and cur-
rently be active seedsmen. Members of the council shall include repre-
sentatives of seed product development, distribution and production. At
least three members shall be elected from the list of wholesalers regis-
tered with the department of agriculture and the remaining members
shall be active seedsmen or representatives of seed product development,
distribution and production elected at large. The elections will be held at

an open session to all seedsmen and representatives of seed product de-
velopment, distribution and production at the annual meeting of the Kan-
sas seed industry association.
(d) The director of the agricultural experiment stations of Kansas
state university of agriculture and applied science or the director's rep-
resentative and the director of the agricultural products development di-
vision of the department of commerce
and housing or the director's rep-
resentative shall serve as ex officio nonvoting members of the council.
(e) The council shall elect annually a chairperson from its member-
ship.
(f) A member of the council may cease to hold such member's po-
sition on the council for any of the following reasons, at the discretion of
a majority of the council, upon resolution duly adopted by the council
dismissing such member: (1) Failure to attend two or more regular meet-
ings of the council, if unexcused; or (2) ceasing to be an active seedsmen.
(g) Members of the Kansas agricultural seed council attending meet-
ings of such council, or attending a subcommittee meeting authorized by
such council, may be paid compensation and other expenses.
(h) The council shall meet at least once every calendar quarter reg-
ularly and hold an annual meeting which shall be open to the public. The
day, time and place of each meeting shall be determined by the council.
The chairperson or any three members of the council may call special
meetings of the council upon such notice as may be prescribed by the
duly adopted procedures of the council.
Sec. 3. On and after July 1, 2003, K.S.A. 12-1770a, as amended by
section 1 of 2003 Senate Substitute for House Bill No. 2208, is hereby
amended to read as follows: 12-1770a. As used in this act, unless the
context clearly shows otherwise:
(a) ``Auto race track facility'' means: (1) An auto race track facility and
facilities directly related and necessary to the operation of an auto race
track facility, including, but not limited to, grandstands, suites and viewing
areas, concessions, souvenir facilities, catering facilities, visitor and retail
centers, signage and temporary hospitality facilities, but excluding (2) ho-
tels, motels, restaurants and retail facilities, not directly related to or nec-
essary to the operation of such facility.
(b) ``Base year assessed valuation'' means the assessed valuation of all
real property within the boundaries of a redevelopment district on the
date the redevelopment district was established.
(c) ``Blighted area'' means an area which:
(1) Because of the presence of a majority of the following factors,
substantially impairs or arrests the development and growth of the mu-
nicipality or constitutes an economic or social liability or is a menace to
the public health, safety, morals or welfare in its present condition and
use:
(A) A substantial number of deteriorated or deteriorating structures;
(B) predominance of defective or inadequate street layout;
(C) unsanitary or unsafe conditions;
(D) deterioration of site improvements;
(E) tax or special assessment delinquency exceeding the fair market
value of the real property;
(F) defective or unusual conditions of title including but not limited
to cloudy or defective titles, multiple or unknown ownership interests to
the property;
(G) improper subdivision or obsolete platting or land uses;
(H) the existence of conditions which endanger life or property by
fire or other causes; or
(I) conditions which create economic obsolescence; or
(2) has been identified by any state or federal environmental agency
as being environmentally contaminated to an extent that requires a re-
medial investigation; feasibility study and remediation or other similar
state or federal action; or
(3) previously was found by resolution of the governing body to be a
slum or a blighted area under K.S.A. 17-4742
et seq. , and amendments
thereto.
(d) ``Conservation area'' means any improved area comprising 15%
or less of the land area within the corporate limits of a city in which 50%
or more of the structures in the area have an age of 35 years or more,
which area is not yet blighted, but may become a blighted area due to
the existence of a combination of two or more of the following factors:
(1) Dilapidation, obsolescence or deterioration of the structures;
(2) illegal use of individual structures;
(3) the presence of structures below minimum code standards;
(4) building abandonment;
(5) excessive vacancies;
(6) overcrowding of structures and community facilities; or
(7) inadequate utilities and infrastructure.
(e) ``De minimus'' means an amount less than 15% of the land area
within a redevelopment district.
(f) ``Developer'' means any person, firm, corporation, partnership or
limited liability company, other than a city.
(g) ``Eligible area'' means a blighted area, conservation area, enter-
prise zone, historic theater, major tourism area or a major commercial
entertainment and tourism area as determined by the secretary.
(h) ``Enterprise zone'' means an area within a city that was designated
as an enterprise zone prior to July 1, 1992, pursuant to K.S.A. 12-17,107
through 12-17,113, and amendments thereto, prior to its repeal and the
conservation, development or redevelopment of the area is necessary to
promote the general and economic welfare of such city.
(i) ``Environmental increment'' means the increment determined
pursuant to subsection (b) of K.S.A. 12-1771a, and amendments thereto.
(j) ``Environmentally contaminated area'' means an area of land hav-
ing contaminated groundwater or soil which is deemed environmentally
contaminated by the department of health and environment or the United
States environmental protection agency.
(k) ``Feasibility study'' means a study which shows whether a rede-
velopment or special bond project's benefits and tax increment revenue
and other available revenues under K.S.A. 12-1774 (a)(1), and amend-
ments thereto, are expected to exceed or be sufficient to pay for the
redevelopment or special bond project costs and the effect, if any, the
redevelopment or special bond project will have on any outstanding spe-
cial obligation bonds as authorized pursuant to subsection (a)(1)(D) of
K.S.A. 12-1774, and amendments thereto.
(l) ``Historic theater'' means a building constructed prior to 1940
which was constructed for the purpose of staging entertainment, includ-
ing motion pictures, vaudeville shows or operas, that is operated by a
nonprofit corporation and is designated by the state historic preservation
officer as eligible to be on the Kansas register of historic places or is a
member of the Kansas historic theatre association.
(m) ``Historic theater sales tax increment'' means the amount of state
and local sales tax revenue imposed pursuant to K.S.A. 12-187
et seq. , 79-
3601
et seq. and 79-3701 et seq. , and amendments thereto, collected from
taxpayers doing business within the historic theater that is in excess of
the amount of such taxes collected prior to the designation of the building
as a historic theater for purposes of this act.
(n) ``Major tourism area'' means an area for which the secretary has
made a finding the capital improvements costing not less than
$100,000,000 will be built in the state to construct an auto race track

facility.
(o) ``Real property taxes'' means all taxes levied on an ad valorem basis
upon land and improvements thereon.
(p) ``Redevelopment project area'' or ``project area'' means an area
designated by a city within a redevelopment district.
(q) ``Redevelopment project costs'' means those costs necessary to
implement a redevelopment plan, including, but not limited to costs in-
curred for:
(1) Acquisition of property within the redevelopment project area;
(2) payment of relocation assistance;
(3) site preparation including utility relocations;
(4) sanitary and storm sewers and lift stations;
(5) drainage conduits, channels, levees and river walk canal facilities;
(6) street grading, paving, graveling, macadamizing, curbing, gutter-
ing and surfacing;
(7) street light fixtures, connection and facilities;
(8) underground gas, water, heating and electrical services and con-
nections located within the public right-of-way;
(9) sidewalks and pedestrian underpasses or overpasses;
(10) drives and driveway approaches located within the public right-
of-way;
(11) water mains and extensions;
(12) plazas and arcades;
(13) parking facilities;
(14) landscaping and plantings, fountains, shelters, benches, sculp-
tures, lighting, decorations and similar amenities; and
(15) all related expenses to redevelop and finance the redevelopment
project.
Redevelopment project costs shall not include costs incurred in con-
nection with the construction of buildings or other structures to be owned
by or leased to a developer, however, the ``redevelopment project costs''
shall include costs incurred in connection with the construction of build-
ings or other structures to be owned or leased to a developer which in-
cludes an auto race track facility or is in a redevelopment district including
some or all of the land and buildings comprising a state mental institution
closed pursuant to section 2 of chapter 219 of the 1995 Session Laws of
Kansas.
(r) ``Redevelopment district'' means the specific area declared to be
an eligible area in which the city may develop one or more redevelopment
projects.
(s) ``Redevelopment district plan'' or ``district plan'' means the pre-
liminary plan that identifies all of the proposed redevelopment project
areas and identifies in a general manner all of the buildings, facilities and
improvements in each that are proposed to be constructed or improved
in each redevelopment project area.
(t) ``Redevelopment project'' means the approved project to imple-
ment a project plan for the development of the established redevelop-
ment district.
(u) ``Redevelopment project plan'' or ``project plan'' means the plan
adopted by a municipality for the development of a redevelopment pro-
ject or projects which conforms with K.S.A. 12-1772, and amendments
thereto, in a redevelopment district.
(v) ``Secretary'' means the secretary of commerce
and housing .
(w) ``Substantial change'' means, as applicable, a change wherein the
proposed plan or plans differ substantially from the intended purpose for
which the district plan or project plan was approved.
(x) ``Tax increment'' means that amount of real property taxes col-
lected from real property located within the redevelopment district that
is in excess of the amount of real property taxes which is collected from
the base year assessed valuation.
(y) ``Taxing subdivision'' means the county, city, unified school district
and any other taxing subdivision levying real property taxes, the territory
or jurisdiction of which includes any currently existing or subsequently
created redevelopment district.
(z) ``Special bond project'' means a
redevelopment project with at
least a $50,000,000 capital investment and $50,000,000 in projected gross
annual sales revenues or for areas outside of metropolitan statistical areas,
as defined by the federal office of management and budget
as of June
30, 1999,
the secretary finds the project meets the requirements of sub-
section (g) and would be of regional or statewide importance, but a ``spe-
cial bond project'' shall not include a project for a gambling casino.
(aa) ``Marketing study'' means a study conducted to examine the im-
pact of the redevelopment or special bond project upon similar businesses
in the projected market area.
(bb) ``Projected market area'' means any area within the state in
which the redevelopment or special bond project is projected to have a
substantial fiscal or market impact upon businesses in such area.
(cc) ``River walk canal facilities'' means a canal and related water fea-
tures located adjacent to a river which flows through a major commercial
entertainment and tourism area and facilities related or contiguous
thereto, including, but not limited to pedestrian walkways and prome-
nades, landscaping and parking facilities.
(dd) ``Commence work'' means the manifest commencement of ac-
tual operations on the development site, such as, erecting a building,
excavating the ground to lay a foundation or a basement or work of like
description which a person with reasonable diligence can see and rec-
ognize as being done with the intention and purpose to continue work
until the project is completed.
(ee) ``Major commercial entertainment and tourism area''
shall may
include, but not be limited to, a major multi-sport athletic complex.
(ff) ``Major multi-sport athletic complex'' means an athletic complex
that is utilized for the training of athletes, the practice of athletic teams,
the playing of athletic games or the hosting of events. Such project may
include playing fields, parking lots and other developments.
Sec. 4. On and after July 1, 2003, K.S.A. 12-1771b is hereby
amended to read as follows: 12-1771b. (a) The boundaries of any re-
development district in a major tourism area including an auto race track
facility located in Wyandotte county, shall, without regard to that portion
of the district pertaining to the auto race track facility, be as follows:
Beginning at the intersection of Interstate 70 and Interstate 435; West
along Interstate 70 to 118th Street; North along 118th Street to State
Avenue; Northeasterly along proposed relocated State Avenue to 110th
Street; North along 110th Street to Parallel Parkway; East along Parallel
Parkway to Interstate 435; South along Interstate 435 to Interstate 70.
(b) Any major tourism area may include an additional area not ex-
ceeding 400 acres of additional property, excluding roads and highways,
in addition to the property necessary for the auto race track facility upon
a finding by the governor that the development plan and each project
within such additional area will enhance the major tourism area. For the
development of each project within such additional area the city shall
select qualified developers pursuant to a request for proposals in accord-
ance with written official procedures approved by the governing body of
the city. Any project within such additional area that is financed in whole
or in part by special obligation bonds payable from revenues derived from
subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto, shall
not be entitled to any real property tax abatements or the revenues de-
scribed in K.S.A. 12-1775, and amendments thereto. Any project within

such additional area must be approved by the governor and construction
must be commenced by July 1, 2002. The city shall prepare and submit
annually to the governor, the secretary of commerce
and housing and the
legislature by each October 1, commencing October 1, 1999, and contin-
uing until October 1, 2002, a report describing the status of any projects
within such additional area. Any business located in Kansas within 50
miles of a major tourism area that relocates into a major tourism area
shall not receive any of the benefits of K.S.A. 12-1770
et seq. , and amend-
ments thereto.
(c) If a city determines that revenues from sources other than prop-
erty taxes will be sufficient to pay any special obligation bonds issued to
finance a redevelopment project for an auto race track facility as de-
scribed in subsection (a) of K.S.A. 12-1770a, and amendments thereto,
and the secretary of commerce
and housing makes a finding that such
project will create a major tourism area pursuant to subsection (n) of
K.S.A. 12-1770a, and amendments thereto, all real and personal property,
constituting an auto race track facility described in subsection (a) of K.S.A.
12-1770a, and amendments thereto, in such redevelopment district shall
be exempt from property taxation for a period ending on the earlier of
(1) the date which is 30 years after the date of the finding by the secretary
of commerce
and housing with respect to such major tourism area; or (2)
the date on which no such special obligation bonds issued to finance such
auto race track facility in a major tourism area remain outstanding.
(d) The city which is authorized to issue bonds pursuant to the pro-
visions of K.S.A. 12-1770
et seq. in order to finance a redevelopment
project in a major tourism area as defined by K.S.A. 12-1770a, and
amendments thereto, shall obtain underwriting services required by the
city for the issuance of such bonds pursuant to written proposals received
in accordance with this section.
(e) Each city which is authorized to issue such bonds shall establish
written official procedures for obtaining underwriting services required
for the issuance of such bonds, including specifications for requests for
proposals and criteria for evaluation of proposals on a competitive basis.
The proposal evaluation criteria shall include factors based on cost, ca-
pacity to provide the required services, qualifications and experience.
(f) Prior to the issuance of any such bonds to finance a redevelopment
project in a major tourism area after the effective date of this act, the city
shall publish notice of a request for proposals to provide the underwriting
services that are required by the city with regard to the proposed bond
issuance and shall mail requests for proposals to qualified interested par-
ties upon request for such notice. The city shall award contracts for such
underwriting services from the proposals received in accordance with the
procedures and evaluation criteria adopted by the city for such purpose.
A city shall publish such notice in the official newspaper of the city.
(g) A redevelopment project in a major tourism area for an auto race
track facility, shall be completed within 30 years from the date the sec-
retary makes the finding that the redevelopment project will create a
major tourism area pursuant to subsection (n) of K.S.A. 12-1770a, and
amendments thereto.
(h) The maximum maturity on bonds issued to finance projects pur-
suant to this act shall not exceed 20 years except that: (1) Such maximum
period of special obligation bonds not payable from revenues described
by subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto, is-
sued to finance an auto race track facility shall not exceed 30 years; and
(2) such maximum period, if the governor determines and makes and
submits a finding to the speaker of the house of representatives and the
president of the senate that a maturity greater than 20 years, but in no
event exceeding 30 years, is necessary for the economic feasibility of the
financing of an auto race track facility with special obligation bonds pay-
able primarily from revenues described by subsection (a)(1)(D) of K.S.A.
12-1774, and amendments thereto, may be extended in accordance with
such determination and finding.
Sec. 5. On and after July 1, 2003, K.S.A. 12-1771d is hereby
amended to read as follows: 12-1771d. The governing body of any mu-
nicipality may designate a building within such municipality to be a his-
toric theater if the governing body of the municipality and the secretary
of commerce
and housing agree that the building satisfies the require-
ments of subsection (i) of K.S.A. 12-1770a, and amendments thereto, and
will contribute significantly to the economic development of the city and
surrounding area.
Sec. 6. On and after July 1, 2003, K.S.A. 12-1774, as amended by
section 4 of 2003 Senate Substitute for House Bill No. 2208, is hereby
amended to read as follows: 12-1774. (a) (1) Any city shall have the power
to issue special obligation bonds in one or more series to finance the
undertaking of any redevelopment project in accordance with the provi-
sions of this act. Such special obligation bonds shall be made payable,
both as to principal and interest:
(A) From tax increments allocated to, and paid into a special fund of
the city under the provisions of K.S.A. 12-1775, and amendments thereto;
(B) from revenues of the city derived from or held in connection with
the undertaking and carrying out of any redevelopment project or projects
under this act including historic theater sales tax increments and envi-
ronmental increments;
(C) from any private sources, contributions or other financial assis-
tance from the state or federal government;
(D) from a pledge of a portion or all of the revenue received by the
city from transient guest, sales and use taxes collected pursuant to K.S.A.
12-1696
et seq., 79-3601 et seq., 79-3701 et seq. and 12-187 et seq., and
amendments thereto, and which are collected from taxpayers doing busi-
ness within that portion of the city's redevelopment district established
pursuant to K.S.A. 12-1771, and amendments thereto, occupied by a re-
development project if there first is a finding by the secretary of com-
merce
and housing that based upon the feasibility study the redevelop-
ment project will create a major tourism area for the state or if the project
is the restoration of a historic theater as defined in subsection (l) of K.S.A.
12-1770a, and amendments thereto, or the project has been designated
as a special bond project as defined in subsection (z) of K.S.A. 12-1770a,
and amendments thereto;
(E) (i) from a pledge of a portion or all increased revenue received
by the city from franchise fees collected from utilities and other busi-
nesses using public right-of-way within the redevelopment district; (ii)
from a pledge of a portion or all of the revenue received by the city from
sales taxes collected pursuant to K.S.A. 12-187, and amendments thereto;
or
(F) by any combination of these methods except that for a project
which has been designated as a special bond project as defined in sub-
section (z) of K.S.A. 12-1770a and amendments thereto, 100% of city and
county sales taxes collected pursuant to K.S.A. 12-187, and amendments
thereto, shall be pledged for such project except for amounts committed

to other use by election of voters prior to the effective date of this act.
The city may pledge such revenue to the repayment of such special
obligation bonds prior to, simultaneously with, or subsequent to the is-
suance of such special obligation bonds.
(2) Bonds issued under paragraph (1) of subsection (a) shall not be
general obligations of the city, nor in any event shall they give rise to a
charge against its general credit or taxing powers, or be payable out of
any funds or properties other than any of those set forth in paragraph (1)
of this subsection and such bonds shall so state on their face.
(3) Bonds issued under the provisions of paragraph (1) of this sub-
section shall be special obligations of the city and are declared to be
negotiable instruments. They shall be executed by the mayor and clerk
of the city and sealed with the corporate seal of the city. All details per-
taining to the issuance of such special obligation bonds and terms and
conditions thereof shall be determined by ordinance of the city. All special
obligation bonds issued pursuant to this act and all income or interest
therefrom shall be exempt from all state taxes except inheritance taxes.
Such special obligation bonds shall contain none of the recitals set forth
in K.S.A. 10-112, and amendments thereto. Such special obligation bonds
shall, however, contain the following recitals, viz., the authority under
which such special obligation bonds are issued, they are in conformity
with the provisions, restrictions and limitations thereof, and that such
special obligation bonds and the interest thereon are to be paid from the
money and revenue received as provided in paragraph (1) of this subsec-
tion.
(b) (1) Subject to the provisions of paragraph (2) of this subsection,
any city shall have the power to issue full faith and credit tax increment
bonds to finance the undertaking of any redevelopment project in ac-
cordance with the provisions of K.S.A. 12-1770
et seq., and amendments
thereto other than a project that will create a major tourism area or result
in the renovation of an historic theater. Such full faith and credit tax
increment bonds shall be made payable, both as to principal and interest:
(A) From the revenue sources identified in paragraph (1)(A), (B), (C),
(D) and (E) of subsection (a) or by any combination of these sources; and
(B) subject to the provisions of paragraph (2) of this subsection, from a
pledge of the city's full faith and credit to use its ad valorem taxing au-
thority for repayment thereof in the event all other authorized sources of
revenue are not sufficient.
(2) Except as provided in paragraph (3) of this subsection, before the
governing body of any city proposes to issue full faith and credit tax in-
crement bonds as authorized by this subsection, the feasibility study re-
quired by K.S.A. 12-1772, and amendments thereto, shall demonstrate
that the benefits derived from the project will exceed the cost and that
the income therefrom will be sufficient to pay the costs of the project.
No full faith and credit tax increment bonds shall be issued unless the
governing body states in the resolution required by K.S.A. 12-1772, and
amendments thereto, that it may issue such bonds to finance the proposed
redevelopment project. The governing body may issue the bonds unless
within 60 days following the date of the public hearing on the proposed
project plan a protest petition signed by 3% of the qualified voters of the
city is filed with the city clerk in accordance with the provisions of K.S.A.
25-3601
et seq. , and amendments thereto. If a sufficient petition is filed,
no full faith and credit tax increment bonds shall be issued until the
issuance of the bonds is approved by a majority of the voters voting at an
election thereon. Such election shall be called and held in the manner
provided by the general bond law. The failure of the voters to approve
the issuance of full faith and credit tax increment bonds shall not prevent
the city from issuing special obligation bonds in accordance with K.S.A.
12-1774, and amendments thereto. No such election shall be held in the
event the board of county commissioners or the board of education de-
termines, as provided in K.S.A. 12-1771, and amendments thereto, that
the proposed redevelopment district will have an adverse effect on the
county or school district.
(3) As an alternative to paragraph (2) of this subsection, any city which
adopts a project plan but does not state its intent to issue full faith and
credit tax increment bonds in the resolution required by K.S.A. 12-1772,
and amendments thereto, and has not acquired property in the redevel-
opment project area may issue full faith and credit tax increment bonds
if the governing body of the city adopts a resolution stating its intent to
issue the bonds and the issuance of the bonds is approved by a majority
of the voters voting at an election thereon. Such election shall be called
and held in the manner provided by the general bond law. The failure of
the voters to approve the issuance of full faith and credit tax increment
bonds shall not prevent the city from issuing special obligation bonds
pursuant to paragraph (1) of subsection (a). Any project plan adopted by
a city prior to the effective date of this act in accordance with K.S.A. 12-
1772, and amendments thereto, shall not be invalidated by any require-
ments of this act.
(4) During the progress of any redevelopment project in which the
redevelopment project costs will be financed, in whole or in part, with
the proceeds of full faith and credit tax increment bonds, the city may
issue temporary notes in the manner provided in K.S.A. 10-123, and
amendments thereto, to pay the redevelopment project costs for the pro-
ject. Such temporary notes shall not be issued and the city shall not ac-
quire property in the redevelopment project area until the requirements
of paragraph (2) or (3) of this subsection, whichever is applicable, have
been met.
(5) Full faith and credit tax increment bonds issued under this sub-
section shall be general obligations of the city and are declared to be
negotiable instruments. They shall be issued in accordance with the gen-
eral bond law. All such bonds and all income or interest therefrom shall
be exempt from all state taxes except inheritance taxes. The amount of
the full faith and credit tax increment bonds issued and outstanding which
exceeds 3% of the assessed valuation of the city shall be within the bonded
debt limit applicable to such city.
(6) Any city issuing special obligation bonds under the provisions of
this act may refund all or part of such issue pursuant to the provisions of
K.S.A. 10-116a, and amendments thereto.
(c) Any increment in ad valorem property taxes resulting from a re-
development project in the established redevelopment district under-
taken in accordance with the provisions of this act, shall be apportioned
to a special fund for the payment of the redevelopment project costs,
including the payment of principal and interest on any special obligation
bonds or full faith and credit tax increment bonds issued to finance such
project pursuant to this act and may be pledged to the payment of prin-
cipal and interest on such bonds.
Sec. 7. On and after July 1, 2003, K.S.A. 12-5242 is hereby amended
to read as follows: 12-5242. As used in the rural housing incentive district
act:
(a) ``City'' means any city incorporated in accordance with Kansas law
with a population of less than 40,000 in a county with a population of less
than 60,000, as certified to the secretary of state by the director of the
division of the budget on the previous July 1st in accordance with K.S.A
11-201, and amendments thereto;
(b) ``County'' means any county organized in accordance with K.S.A.

18-101 et seq., and amendments thereto, with a population of less than
40,000, as certified to the secretary of state by the director of the division
of the budget on the previous July 1st in accordance with K.S.A 11-201,
and amendments thereto;
(c) ``Developer'' means the person, firm or corporation responsible
under an agreement with the governing body to develop housing or re-
lated public facilities in a district.
(d) ``District'' means a rural housing incentive district established in
accordance with this act.
(e) ``Governing body'' means the board of county commissioners of
any county or the mayor and council, mayor and commissioners or board
of commissioners, as the laws affecting the organization and status of cities
affected may provide;
(f) ``Secretary'' means the secretary of commerce
and housing of the
state of Kansas.
(g) ``Real property taxes'' means and includes all taxes levied on an
ad valorem basis upon land and improvements thereon.
(h) ``Taxing subdivision'' means the county, the city, the unified
school district, and any other taxing subdivision levying real property
taxes, the territory or jurisdiction of which includes any currently existing
or subsequently created rural housing incentive district.
Sec. 8. On and after July 1, 2003, K.S.A. 32-873 is hereby amended
to read as follows: 32-873. Notwithstanding the provisions of K.S.A. 32-
867 through 32-872, the selection of any site by the secretary of wildlife
and parks and secretary of commerce
and housing pursuant to K.S.A. 32-
874d, and amendments thereto, shall not become final, nor shall any
revenue bonds be issued for the resort development, until the site so
selected and the amount of the bonds proposed to be issued have been
approved by the legislature or the state finance council acting on this
matter which is hereby characterized as a matter of legislative delegation
and subject to the guidelines prescribed in subsection (c) of K.S.A. 75-
3711c, and amendments thereto.
Sec. 9. On and after July 1, 2003, K.S.A. 32-874a is hereby amended
to read as follows: 32-874a. The feasibility study required under K.S.A.
32-874, and amendments thereto, being completed, the secretary of com-
merce
and housing , the secretary of wildlife and parks and the secretary
of transportation will develop an incentive plan outlining the state of Kan-
sas' commitment toward building a lake resort which shall include, but
not limited to, infrastructure improvements, utility improvements and tax
incentives to be offered for sites at, including, but not limited to the six
state parks selected in the feasibility study reported to the 1998 legisla-
ture: Cheney, Clinton, El Dorado, Hillsdale, Perry and Milford.
Sec. 10. On and after July 1, 2003, K.S.A. 32-874b is hereby
amended to read as follows: 32-874b. Once the state incentive packages
are agreed upon, the secretary of wildlife and parks, under K.S.A. 32-
807, 32-830 and 32-831, and amendments thereto, and the secretary of
commerce
and housing under K.S.A. 74-5005, and amendments thereto,
will take the incentive package for each lake resort site to communities
adjacent to each state park, revealing what the state is willing to commit
to the development of a lake resort near each lake resort community and
negotiate and determine what each community is willing to offer as an
incentive to have the lake resort develop near its community.
Sec. 11. On and after July 1, 2003, K.S.A. 32-874d is hereby
amended to read as follows: 32-874d. (a) When the incentive packages
for each of the lake resorts is determined, the secretary of wildlife and
parks and the secretary of commerce
and housing shall develop requests
for proposals which include the incentive packages for each site. The
proposals received from developers under subsection (h)(6) of K.S.A. 32-
807, and amendments thereto, shall be sealed.
(b) The department of wildlife and parks and the department of com-
merce
and housing shall advertise for proposal plans with bids for devel-
opment of sites selected under K.S.A. 32-867, 32-868, 32-871 and 32-
872, and amendments thereto. Advertisements for proposals with bids
shall be published in the Kansas register and once each week for two
consecutive weeks in a newspaper having general circulation in the com-
munity at least 60 days before the time for receiving the proposals with
bids. The advertisement shall also be posted on readily accessible bulletin
boards in all offices of the two departments and on the information net-
work of Kansas. The advertisement shall identify the area to be developed,
the purpose of the development and shall state that such further infor-
mation as is available may be obtained from either departments' office in
Topeka.
The two secretaries shall consider all proposals with bids submitted,
the financial and legal ability of the private sector developers making such
proposals with bids to carry them out and may negotiate with any private
sector developer for a proposal with bid. The secretaries may accept such
proposal with bid as it deems to be in the public interest and in further-
ance of the purposes of this act.
(c) Once proposals are received from developers wishing to contract
for building the resort, the secretary of wildlife and parks utilizing powers
and authority granted under K.S.A. 32-807, 32-862, 32-863 and 32-867
through 32-872, and amendments thereto, and the secretary of commerce

and housing
under K.S.A. 74-5005, and amendments thereto, shall select,
negotiate and contract for the construction of a lake resort which shall be
operated as a private concession and developed with private funding to
include, but not limited to, the issuance of revenue bonds under K.S.A.
32-857 through 32-864, and amendments thereto.
(d) The secretary of wildlife and parks and the secretary of commerce

and housing
may engage a private consultant to assist in the development
of a contract for the selected site. Consistent with the powers and au-
thority granted to the secretary of wildlife and parks, the secretary may
waive any relevant park fees, obtain revenue from the resort and resort
facilities and include penalty provisions in the contract regarding non-
performance by the operator and developer of the resort.
(e) The secretary of wildlife and parks and the secretary of commerce

and housing
shall not seek approval under K.S.A. 32-873, and amend-
ments thereto, until the requirements of subsections (a) through (d) are
satisfied.
Sec. 12. On and after July 1, 2003, K.S.A. 32-874e is hereby amended
to read as follows: 32-874e. The secretary of wildlife and parks and the
secretary of commerce
and housing shall present a joint report concerning
negotiations, site selection, and status of the resort to the legislature,
house committee on tourism, senate committee on transportation and
tourism and to the governor during the 1999 legislative session.
Sec. 13. On and after July 1, 2003, K.S.A. 39-1605 is hereby
amended to read as follows: 39-1605. (a) There is hereby established the
governor's mental health services planning council. The council shall con-
sist of 25 members.
(b) So the composition of the council is in compliance with the
requirements of public law 102-321 and supplementary federal acts, per-
sons appointed to the council will be in accordance with the following:
(1) Nine members shall be state agency representatives who shall

include:
(A) The commissioner of mental health and developmental disabili-
ties;
(B) the secretary of social and rehabilitation services shall appoint one
member for each of the following areas: vocational rehabilitation, alcohol
and drug abuse services, medical services and children and family serv-
ices;
(C) the commissioner of juvenile justice;
(D) the commissioner of education;
(E) the secretary of corrections; and
(F) the secretary of commerce
and housing . If a commissioner or
secretary is unable to participate, the commissioner or secretary shall
appoint a designee as the official member of the council.
(2) The governor shall appoint the following persons to the council:
(A) One member shall be a person licensed to practice medicine and
surgery with board certification in psychiatry;
(B) two members shall be executive directors of mental health cen-
ters; and
(C) 13 members shall be individuals who are not state employees or
providers of mental health services. Of the 13 members, four members
shall be adult consumers with serious and persistent mental illness; three
members shall be immediate family members of adult consumers with
serious and persistent mental illnesses; four members shall be family
members of minor children or youth with severe emotional disturbances;
and two members shall be members of the general public.
(c) The terms of members who are currently serving on the council
shall expire on the effective date of this act. At that time, appointees of
the governor under subsection (b)(2) shall be appointed to the council by
the governor with 1/2 appointed for a term of two years and the other 1/2
for a term of four years as specified by the governor. Thereafter, each
member appointed to the council by the governor shall be appointed for
a term of four years.
(d) Each member of the council shall serve until a successor is ap-
pointed and qualified. In the case of a vacancy on the council, a successor
of like qualifications shall be appointed or designated to fill the unexpired
term in accordance with subsections (b)(1) and (2).
(e) The governor shall designate the chairperson of the council. The
members of the council shall elect a vice-chairperson.
(f) Members of the governor's mental health services planning coun-
cil attending meetings of the council, or attending a subcommittee meet-
ing thereof authorized by the council, shall be paid amounts provided in
subsection (e) of K.S.A. 75-3223 and amendments thereto.
Sec. 14. On and after July 1, 2003, K.S.A. 2002 Supp. 40-4702 is
hereby amended to read as follows: 40-4702. (a) The governor of the state
of Kansas shall appoint a cabinet level committee which shall be known
as the Kansas business health policy committee.
(b) The Kansas business health policy committee, hereinafter re-
ferred to as the health committee, shall consist of:
(1) The secretary of the department of commerce
and housing or the
secretary's designee;
(2) the secretary of the department of social and rehabilitation serv-
ices or the secretary's designee;
(3) the commissioner of insurance or the commissioner's designee;
(4) one member appointed by the president of the senate;
(5) one member appointed by the speaker of the house of represen-
tatives;
(6) one member appointed by the minority leader of the senate;
(7) one member appointed by the minority leader of the house of
representatives; and
(8) three members at large from the private sector appointed by the
governor.
The secretary of each state agency represented on this committee shall
provide such staff and other resources as the health committee may re-
quire.
(c) (1) The initial meeting of the health committee shall be convened
within 60 days after the effective date of this act by the governor at a time
and place designated by the governor.
(2) Meetings of the health committee subsequent to its initial meet-
ing shall be held and conducted in accordance with policies and proce-
dures established by the health committee.
(3) Commencing at the time of the initial meeting of the health com-
mittee, the powers, authorities, duties and responsibilities conferred and
imposed upon the health committee by this act shall be operative and
effective.
(d) The health committee shall develop and approve a request for
proposals for a qualified entity to serve as the Kansas business health
partnership, hereinafter referred to as health partnership, which shall
provide a mechanism to combine federal and state subsidies with contri-
butions from small employers and eligible employees to purchase health
insurance in accordance with guidelines developed by the health com-
mittee.
(e) The health committee shall evaluate responses to the request for
proposals and select the qualified entity to serve as the health partnership.
(f) The health committee shall:
(1) Develop, approve and revise subsidy eligibility criteria provided
that:
(A) Low wage and modest wage employees of small employers shall
be eligible for subsidies if:
(1) The small employer has not previously offered health insurance
coverage; or
(2) the small employer has previously offered health insurance cov-
erage and a majority of such small employer's employees are low wage
or modest wage employees as defined in K.S.A. 40-4701, and amend-
ments thereto;
(B) any small employer's eligible employee with a child who is eligible
for coverage under the state childrens' health insurance program estab-
lished by K.S.A. 38-2001
et seq. , and amendments thereto, or in the state
medical assistance program shall be eligible automatically for a subsidy
and shall be included in the determination of eligibility for the small
employer and its low-and-modest wage employees; and
(C) at least 70% of the small employer's eligible employees without
group health insurance coverage from another source are insured through
the partnership; and
(2) determine and arrange for eligibility determination for subsidies
of low wage or modest wage employees; and
(3) develop subsidy schedules based upon eligible employee wage
levels and family income.
(g) The health committee shall oversee and monitor the ongoing op-
eration of any subsidy program and the financial accountability of all sub-
sidy funds. If, in the judgment of the health committee, the entity selected
to serve as the health partnership fails to perform as intended, the health
committee may terminate its selection and designation of that entity as
the health partnership and may issue a new request for proposal and
select a different qualified entity to serve as the health partnership.
(h) The health committee is hereby authorized to accept funds from
the federal government, or its agencies, or any other source whatsoever
for research studies, investigation, planning and other purposes related
to implementation of the objectives of this act. Any funds so received
shall be deposited in the state treasury and shall be credited to a special
revenue fund which is hereby created and shall be known as the health
committee insurance fund and used in accordance with or direction of

the contributing federal agencies. Expenditures from such fund may be
made for any purpose in keeping with the responsibilities, functions and
authority of the department. Warrants on such fund shall be drawn in
the same manner as required of other state agencies upon vouchers
signed by the secretary of the department of social and rehabilitation
services upon receiving prior approval of the health committee.
(i) The health committee is authorized to develop policies for the
administration of the subsidy program and for the use of additional federal
or private funds to subsidize health insurance coverage for low-and-mod-
est wage employees of predominantly low-wage small employers.
(j) The health committee is hereby authorized to organize, or cause
to be organized, one or more advisory committees. No member of any
advisory committee established under this subsection shall have previ-
ously received or currently receive any payment or other compensation
from the health partnership. The membership of each advisory committee
established under this subsection shall contain at least one representative
who is a small employer and one representative who is an eligible em-
ployee as defined in K.S.A. 40-4701, and amendments thereto, and one
representative of the insurance industry.
Sec. 15. On and after July 1, 2003, K.S.A. 2002 Supp. 58-1401 is
hereby amended to read as follows: 58-1401. As used in this act:
(a) ``Dwelling'' means any single family residence and each individual
living unit in a duplex or triplex residential building which is constructed
with public financial assistance.
(b) ``Public financial assistance'' means:
(1) A building contract or similar contractual agreement with any
state agency;
(2) any real estate received by the owner through a donation by the
state;
(3) state tax credits;
(4) grant assistance from state funds;
(5) state loan guarantees; or
(6) federal funds administered by the state or a state agency.
(c)
``Secretary''``Director'' means the secretary of the Kansas depart-
ment of commerce and housing
director of the division of housing in the
Kansas development finance authority
.
Sec. 16. On and after July 1, 2003, K.S.A. 2002 Supp. 58-1405 is
hereby amended to read as follows: 58-1405. (a) Upon application there-
for, the
secretarydirector may waive any requirement of K.S.A. 2002
Supp. 58-1402, and amendments thereto. Applications for a waiver shall
be submitted to the
secretarydirector. If the secretarydirector deter-
mines that such compliance is financially or environmentally impractical,
the
secretarydirector may waive such requirement. The secretarydirec-
tor
shall render a decision regarding any application submitted pursuant
to this section within 60 days of receipt thereof.
(b) Unless otherwise provided by rules and regulations adopted by
the
secretarydirector , proceedings to consider a waiver under this section
shall be conducted in accordance with the provisions of the Kansas ad-
ministrative procedure act.
(c) Appeals from the decision of the
secretarydirector shall be gov-
erned by the provisions of the act for judicial review and civil enforcement
of agency actions.
Sec. 17. On and after July 1, 2003, K.S.A. 2002 Supp. 58-1406 is
hereby amended to read as follows: 58-1406. The provisions of this act
shall not apply to any dwelling which is:
(a) A private residence which is owner-occupied or which is under
contract for occupation by the owner;
(b) a private residence for which an individual tax credit
is received;
(c) a private residence which is financed with funds from the federal
housing administration, rural development programs administered by the
United States department of agriculture or under a single-family mort-
gage guarantee assistance program;
(d) a private residence for which rental vouchers or certificates under
42 U.S.C. § 1437 are accepted;
(e) financed with public funds other than state funds or federal funds
administered by the state or a state agency; or
(f) a dwelling the design or construction of which commenced prior
to July 1, 2002, as evidenced by (1) a payment for such design or con-
struction, (2) a contract for such design or construction or (3) or other
proof sufficient to the
secretarydirector as prescribed by rules and reg-
ulations.
Sec. 18. On and after July 1, 2003, K.S.A. 2002 Supp. 58-1407 is
hereby amended to read as follows: 58-1407. The
secretary director shall
adopt any rules and regulations necessary to implement the provisions of
this act.
Sec. 19. On and after July 1, 2003, K.S.A. 65-5721 is hereby
amended to read as follows: 65-5721. (a) On the effective date of this
order, there is hereby established the commission on emergency planning
and response.
(b) The membership of the commission on emergency planning and
response shall consist of the agency head or secretary or a designated
person of authority from the following agencies:
(1) the fire marshal;
(2) the department of health and environment;
(3) the department of transportation;
(4) the Kansas highway patrol;
(5) the adjutant general; and
(6) the department of commerce
and housing.
(c) In addition, the membership of the commission on emergency
planning and response shall also consist of seven members appointed by
the governor as follows:
(1) Two individuals shall be representative of counties;
(2) two individuals selected to represent cities; and
(3) three individuals selected to represent businesses and industries.
(d) A designee of the adjutant general shall serve as the secretary of
the commission on emergency planning and response. The adjutant gen-
eral shall provide staff support for the commission on emergency planning
and response.
(e) Of the members first appointed to the commission on emergency
planning and response by the governor, one representative of cities, one
representative of counties, and one representative of business and indus-
try shall serve a term of two years, and the remainder of the members
appointed by the governor shall serve terms of three years. Thereafter,
members who represent cities, counties, and business and industry shall
serve terms of four years and until the successor has been appointed. Any
vacancy in the office of an appointed member shall be filled for the unex-
pired term by appointment by the governor.
(f) A chairperson shall be elected annually by the members of the
commission. A vice-chairperson shall be designated by the chairperson to

serve in the absence of the chairperson.
(g) For attending meetings of such commission, or attending a sub-
committee meeting thereof authorized by such commission, those mem-
bers of the commission appointed by the governor shall be paid compen-
sation, subsistence allowances, mileage and other expenses as provided
in K.S.A. 75-3223, and amendments thereto.
Sec. 20. On and after July 1, 2003, K.S.A. 72-4436 is hereby
amended to read as follows: 72-4436. As used in this act:
(a) ``Area vocational school,'' ``area vocational-technical school,''
``community college'' and ``school year'' have the meanings respectively
ascribed thereto in K.S.A. 72-4412 and amendments thereto.
(b) ``Operating budget'' has the meaning ascribed thereto in K.S.A.
72-4430 and amendments thereto.
(c) ``School'' means any area vocational school, any area vocational-
technical school and any community college.
(d) ``Vocational education instructional equipment aid'' means state
financial aid distributed under this act by the secretary of commerce
and
housing
to a school for the purpose of acquiring vocational education
instructional equipment.
Sec. 21. On and after July 1, 2003, K.S.A. 72-4437 is hereby
amended to read as follows: 72-4437. (a) Subject to the provisions of
appropriations acts, vocational education instructional equipment aid
shall be distributed to schools in accordance with this act. Any such dis-
tribution shall be on a competitive basis and the amount thereof for each
school shall be determined by the secretary of commerce
and housing on
the basis of the condition of existing equipment and potential for stimu-
lating economic growth and enhancing employment opportunities within
the state. The secretary of commerce
and housing shall establish criteria
for evaluating applications of schools for vocational education instruc-
tional equipment aid.
(b) Payments of vocational education instructional equipment aid
shall be distributed by the secretary of commerce
and housing on dates
to be determined by the secretary. Upon receipt of such payment, the
treasurer of each area vocational school shall deposit the amount thereof
to the credit of the area vocational school fund. The treasurer of each
area vocational-technical school shall deposit the amount of such warrant
to the credit of the vocational education instructional equipment fund
established by this act.
Sec. 22. On and after July 1, 2003, K.S.A. 73-2402 is hereby
amended to read as follows: 73-2402. (a) There is hereby created an
advisory committee to assist in the work of the Kansas territorial sesqui-
centennial commission. The advisory committee shall be composed of the
following members:
(1) The executive director of the Kansas state historical society, who
shall serve as chairperson of the advisory committee;
(2) the director of the Kansas humanities council or the director's
designee;
(3) the director of the Kansas arts commission or the director's des-
ignee;
(4) the director of the division of travel and tourism development of
the department of commerce
and housing or the director's designee;
(5) the commissioner of education or the commissioner's designee;
(6) fifteen members appointed by the governor as follows: (A) Six
members of history faculties of universities under the supervision of the
state board of regents; (B) six members of history faculties of community
colleges or private colleges or universities in the state; (C) a representative
of the travel industry association of Kansas; (D) a representative of the
Kansas museums association; and (E) a representative of the territorial
Kansas heritage alliance;
(7) two members appointed by the speaker of the house of represen-
tatives;
(8) two members appointed by the minority leader of the house of
representatives;
(9) tw o members appointed by the president of the senate; and
(10) two members appointed by the minority leader of the senate.
(b) The chairperson of the advisory committee shall appoint a person
to serve as secretary of the committee.
(c) Members of the advisory committee shall serve without compen-
sation or reimbursement of expenses.
Sec. 23. On and after July 1, 2003, K.S.A. 73-2404 is hereby
amended to read as follows: 73-2404. (a) In fulfilling its responsibilities,
the Kansas territorial sesquicentennial commission shall consult, coop-
erate with and seek advice from appropriate state agencies, local and
public bodies, learned societies and historical, patriotic, philanthropic,
civil, professional and related organizations. State agencies shall cooperate
with the commission in planning, encouraging, developing and coordi-
nating appropriate commemorative activities.
(b) The chief executive officer of each state university shall cooperate
with the commission, especially in the encouragement and coordination
of scholarly works and presentations on the history, culture and political
activities related to the territorial period in Kansas history.
(c) The state historical society and the state librarian shall cooperate
with the commission, especially in the development and displays of ex-
hibits and collections and in the development of bibliographies, catalogs
and other materials relevant to the territorial period.
(d) The division of travel and tourism development of the department
of commerce
and housing shall cooperate with the commission in mar-
keting to potential visitors to the state commemorative activities enabling
visitors to experience the cultural heritage of Kansas.
Sec. 24. On and after July 1, 2003, K.S.A. 74-520a is hereby amended
to read as follows: 74-520a. (a) On and after March 15, 1995, the Kansas
state fair board is hereby established. The Kansas state fair board shall
consist of the following members:
(1) The secretary of agriculture or the successor of the secretary of
agriculture, or the secretary's designee;
(2) the secretary of commerce
and housing , or the secretary's desig-
nee;
(3) the director of extension of Kansas state university of agriculture
and applied science, or the director's designee;
(4) one person appointed by the governor from three persons nom-
inated by the Kansas chamber of commerce and industry;
(5) one person appointed by the governor from three persons nom-
inated by the travel industry association of Kansas;
(6) one person appointed by the governor from three persons nom-
inated by the Kansas fairs association;
(7) one person appointed by the Kansas technology enterprise cor-
poration from among the board of directors of the Kansas technology
enterprise corporation; and
(8) six people from the general public appointed by the governor. Of
such people appointed, one shall be from each of the five extension areas,
as established i n subsection (e), and one shall represent the state at large.
Directors of each extension area shall submit three nominations to the
governor. Such persons nominated shall be actively involved in agriculture
production or agribusiness.
(b) Of the persons initially appointed by the governor under subsec-
tion (a), three shall have a term of one year, three shall have a term of

two years and three shall have a term of three years and until a successor
is appointed and qualified. Thereafter, all members shall have terms of
three years and until a successor is appointed and qualified.
(c) Any vacancy occurring on the Kansas state fair board shall be filled
as the original appointment was made.
(d) If any of the members able to appoint a designee does so, the
designee shall be appointed for a term of not less than one year.
(e) For the purpose of this section the state shall be divided into five
extension areas. The northwest extension area shall include the following
counties: Cheyenne, Rawlins, Decatur, Norton, Phillips, Smith, Osborne,
Rooks, Graham, Sheridan, Thomas, Sherman, Wallace, Logan, Gove,
Trego, Ellis, Russell, Barton, Rush and Ness. The southwest extension
area shall include the following counties: Greeley, Wichita, Scott, Lane,
Pawnee, Hodgeman, Finney, Kearny, Hamilton, Edwards, Ford, Gray,
Haskell, Grant, Stanton, Morton, Stevens, Seward, Meade, Clark, Co-
manche and Kiowa. The south central extension area shall include the
following counties: Lincoln, Ottawa, Dickinson, Ellsworth, Saline, Rice,
McPherson, Marion, Reno, Harvey, Butler, Kingman, Sedgwick, Cowley,
Sumner, Harper, Barber, Pratt and Stafford. The southeast extension area
shall include the following counties: Morris, Chase, Lyon, Osage, Frank-
lin, Miami, Coffey, Anderson, Linn, Bourbon, Allen, Woodson, Green-
wood, Elk, Wilson, Neosho, Crawford, Chautauqua, Montgomery, La-
bette and Cherokee. The northeast extension area shall include the
following counties: Jewell, Republic, Washington, Marshall, Nemaha,
Brown, Doniphan, Mitchell, Cloud, Clay, Riley, Pottawatomie, Jackson,
Atchison, Jefferson, Leavenworth, Wyandotte, Johnson, Douglas, Shaw-
nee, Wabaunsee and Geary.
Sec. 25. On and after July 1, 2003, K.S.A. 74-567 is hereby amended
to read as follows: 74-567. (a) The state board of agriculture shall have
such powers, duties and functions as prescribed by this section. The board
shall serve in an advisory capacity to the governor and the secretary to
review and make recommendations on department legislative initiatives
and proposed rules and regulations or proposed revised rules and regu-
lations prior to the submission of such rules and regulations to the sec-
retary of administration pursuant to K.S.A. 77-420, and amendments
thereto, other than rules and regulations pertaining to personnel matters
of the department and rules and regulations of the division of water re-
sources. The board shall not have any powers, duties or functions con-
cerning the day-to-day operations of the department of agriculture.
(b) The board shall serve in an advisory capacity to the agriculture
products development division of the department of commerce
and hous-
ing
. The board shall advise the division on issues and concerns relating
to agriculture products development and marketing.
(c) The agriculture products development division of the department
of commerce
and housing shall report to the board, at not less than two
meetings of such board each year, on the activities and functions of the
division.
Sec. 26. On and after July 1, 2003, K.S.A. 74-575 is hereby amended
to read as follows: 74-575. (a) Except as otherwise provided by this act,
the secretary of agriculture shall be the successor in every way to the
powers, duties, and functions of the division of marketing and director of
marketing in which the same were vested prior to the effective date of
this act and which are transferred pursuant to K.S.A. 74-574. Every act
performed in the exercise of such powers, duties, and functions by or
under the authority of the secretary of agriculture shall be deemed to
have the same force and effect as if performed by the division of mar-
keting or director of marketing in which such powers, duties, and func-
tions were vested prior to the effective date of this act.
(b) Whenever the ``division of markets,'' or words of like effect, are
referred to or designated by a statute, contract, or other document, and
such reference is in regard to one of the powers and duties transferred
to the department of agriculture pursuant to K.S.A. 74-574, such refer-
ence or designation shall be deemed to apply to the department of agri-
culture. Whenever the ``director of marketing,'' or words of like effect,
are referred to or designated by a statute, contract, or other document,
and such reference is in regard to one of the powers and duties trans-
ferred to the department of commerce
and housing pursuant to K.S.A.
74-574, such reference or designation shall be deemed to apply to the
secretary of agriculture.
(c) All rules and regulations, orders, and directives of the division of
marketing or director of marketing pertaining to powers and duties trans-
ferred pursuant to K.S.A. 74-574 shall continue to be effective and shall
be deemed to be rules and regulations, orders, and directives of the sec-
retary of agriculture until revised, amended, or nullified pursuant to law.
Sec. 27. On and after July 1, 2003, K.S.A. 74-2622 is hereby
amended to read as follows: 74-2622. (a) There is hereby established
within and as a part of the Kansas water office the Kansas water authority.
The authority shall be composed of 23 members of whom 13 shall be
appointed as follows: (1) One member shall be appointed by the governor,
subject to confirmation by the senate as provided in K.S.A. 75-4315b, and
amendments thereto. Except as provided by K.S.A. 46-2601, such person
shall not exercise any power, duty or function as a member or chairperson
of the water authority until confirmed by the senate. Such member shall
serve at the pleasure of the governor and shall be the chairperson of the
authority; (2) except as provided by subsection (b), 10 members shall be
appointed by the governor for terms of four years. Of the members ap-
pointed under this provision one shall be a representative of large mu-
nicipal water users, one shall be representative of small municipal water
users, one shall be a board member of a western Kansas groundwater
management district, one shall be a board member of a central Kansas
groundwater management district, one shall be a member of the Kansas
association of conservation districts, one shall be representative of indus-
trial water users, one shall be a member of the state association of wa-
tershed districts, one shall have a demonstrated background and interest
in water use conservation and environmental issues, and two shall be
representative of the general public. The member who is representative
of large municipal water users shall be appointed from three nominations
submitted by the league of Kansas municipalities. The member who is
representative of small municipal water users shall be appointed from
three nominations submitted by the Kansas rural water district's associ-
ation. The member who is representative of a western Kansas ground-
water management district shall be appointed from three nominations
submitted by the presidents of the groundwater management district
boards No. 1, 3 and 4. The member who is representative of a central
Kansas groundwater management district shall be appointed from three
nominations submitted by the presidents of the groundwater manage-
ment district boards No. 2 and 5. The member who is representative of
industrial water users shall be appointed from three nominations sub-
mitted by the Kansas association of commerce and industry. The member
who is representative of the state association of watershed districts shall
be appointed from three nominations submitted by the state association
of watershed districts. The member who is representative of the Kansas
association of conservation districts shall be appointed from three nomi-

nations submitted by the state association of conservation districts. If the
governor cannot make an appointment from the original nominations, the
nominating authority shall be so advised and, within 30 days thereafter,
shall submit three new nominations. Members appointed by the governor
shall be selected with special reference to training and experience with
respect to the functions of the Kansas water authority, and no more than
six of such members shall belong to the same political party; (3) one
member shall be appointed by the president of the senate for a term of
two years; and (4) one member shall be appointed by the speaker of the
house of representatives for a term of two years. The state geologist, the
chief engineer of the division of water resources of the state board of
agriculture, the director of the division of envi ronment of the department
of health and environment, the chairperson of the state corporation com-
mission, the secretary of commerce
and housing , the director of the Kan-
sas water office, the secretary of wildlife and parks, the administrative
officer of the state conservation commission, the secretary of the state
board of agriculture and the director of the agricultural experiment sta-
tions of Kansas state university of agriculture and applied science shall
be nonvoting members ex officio of the authority. The director of the
Kansas water office shall serve as the secretary of the authority.
(b) A member appointed pursuant to subsection (a)(2) shall be ap-
pointed for a term expiring on January 15 of the fourth calendar year
following appointment and until a successor is appointed and qualified.
(c) In the case of a vacancy in the appointed membership of the
Kansas water authority, the vacancy shall be filled for the unexpired term
by appointment in the same manner that the original appointment was
made. Appointed members of the authority attending regular or special
meetings thereof shall be paid compensation, subsistence allowances,
mileage and other expenses as provided in K.S.A. 75-3223, and amend-
ments thereto.
(d) The Kansas water authority shall:
(1) Consult with and be advisory to the governor, the legislature and
the director of the Kansas water office.
(2) Review plans for the development, management and use of the
water resources of the state by any state or local agency.
(3) Make a study of the laws of this state, other states and the federal
government relating to conservation and development of water resources,
appropriation of water for beneficial use, flood control, construction of
levees, drainage, irrigation, soil conservation, watershed development,
stream control, gauging of stream and stream pollution for the purpose
of determining the necessity or advisability of the enactment of new or
amendatory legislation in this state on such subjects.
(4) Make recommendations to other state agencies and political sub-
divisions of the state for the coordination of their activities relating to
flood control, construction of levees, drainage, irrigation, soil conserva-
tion, watershed development, stream control, gauging of stream, stream
pollution and groundwater studies.
(5) Make recommendations to each regular session of the legislature
and to the governor at such times as the authority considers advisable
concerning necessary or advisable legislation relating to any of the matters
or subjects which it is required by this act to study for the purpose of
making recommendations to the legislature. All such recommendations
to the legislature shall be in drafted bill form together with such explan-
atory information and data as the authority considers advisable.
(6) Approve, prior to submission to the legislature by the Kansas wa-
ter office or its director, (A) any contract entered into pursuant to the
state water plan storage act, (B) any amendments to the state water plan
or the state water planning act and (C) any other legislation concerning
water resources of the state.
(7) Approve, before they become effective, any policy changes pro-
posed by the Kansas water office concerning the pricing of water for sale
pursuant to the state water plan storage act.
(8) Approve, before it becomes effective, any agreement entered into
with the federal government by the Kansas water office.
(9) Request any agency of the state, which shall have the duty upon
that request, to submit its budget estimate pertaining to the state's water
resources and any plans or programs related thereto and, upon the au-
thority's receipt of such budget estimate, review and evaluate it and fur-
nish recommendations relating thereto to the governor and the legisla-
ture.
(10) Approve, prior to adoption by the director of the Kansas water
office, rules and regulations authorized by law to be adopted.
(11) Approve, prior to adoption by the director of the Kansas water
office, guidelines for conservation plans and practices developed pursuant
to subsection (c) of K.S.A. 74-2608, and amendments thereto.
(e) The Kansas water authority may appoint citizens' advisory com-
mittees to study and advise on any subjects upon which the authority is
required or authorized by this act to study or make recommendations.
(f) The provisions of the Kansas governmental operations accounta-
bility law apply to the Kansas water authority, and the authority is subject
to audit, review and evaluation under such law.
Sec. 28. On and after July 1, 2003, K.S.A. 74-2916 is hereby
amended to read as follows: 74-2916. (a) Notwithstanding the provisions
of K.S.A. 74-5074, and amendments thereto, on July 1, 2002, or as soon
thereafter as moneys are available, the secretary of commerce
and hous-
ing
is authorized and directed to loan to the director of the Kansas sports
hall of fame $100,000 from the Kansas export loan guarantee fund. The
director of the Kansas sports hall of fame is authorized and directed to
use any moneys in the Kansas sports hall of fame surcharge fund to pro-
vide for the ongoing expenses of the Kansas sports hall of fame. Such
loan shall not bear interest. Such loan shall not be deemed to be an
indebtedness or debt of the state of Kansas within the meaning of section
6 of article 11 of the constitution of the state of Kansas.
(b) Upon certification by the secretary of commerce
and housing and
by the director of the Kansas sports hall of fame, the director of accounts
and reports shall transfer such amount from the Kansas export loan guar-
antee fund to the Kansas sports hall of fame surcharge fund.
(c) The loan authorized pursuant to subsection (a) shall be repaid in
one payment payable on or before June 30, 2003, of $50,000, and one
payment payable on or before June 30, 2004 of $50,000.
(d) The state of Kansas sports hall of fame board of trustees, in con-
sultation with postsecondary educational institutions and the accredited
independent institutions, shall develop and implement a voluntary plan
to have such institutions participate in the raising of funds for the Kansas
sports hall of fame.
(e) Quarterly, during fiscal year 2003 and 2004, the state of Kansas
sports hall of fame board of trustees shall submit a report to the chair-
person of the legislative budget committee concerning the progress and
provisions of this act when the legislature is not in session and the chair-
person of the committee on appropriations of the house of representatives
and the chairperson of the committee on ways and means of the senate
when the legislature is in session.
(f) ``Postsecondary educational institution'' means Kansas state uni-
versity, the university of Kansas, Wichita state university, Emporia state

university, Fort Hays state university, Pittsburg state university, Wash-
burn university and any community college.
Sec. 29. On and after July 1, 2003, K.S.A. 74-32,151 is hereby
amended to read as follows: 74-32,151. (a) This section and K.S.A. 74-
32,152 through 74-32,159, and amendments thereto, shall be known and
may be cited as the workforce development loan program act.
(b) As used in the workforce development loan act, ``postsecondary
educational institution'' shall have the meaning ascribed thereto by K.S.A.
74-3201b, and amendments thereto.
(c) Within the limits of appropriations and private contributions
therefor, and in accordance with the provisions of this act, the state board
of regents may award such loans to Kansas residents who are enrolled in
or admitted to an area vocational technical school, technical college, com-
munity college, vocational school coordinated under the state board of
regents or associate degree programs at postsecondary educational insti-
tutions and who enter into a written agreement with the state board of
regents as provided in K.S.A. 74-32,152 and amendments thereto.
(d) The board of regents may accept any private contributions to the
program. The chief executive officer of the board of regents shall turn
such contributions over to the state treasurer who shall deposit such mon-
eys into the workforce development loan fund.
(e) After consultation with the secretaries of the departments of hu-
man resources, social and rehabilitation services and commerce
and hous-
ing
, the board may establish a list of education programs in which an
applicant must enroll to be eligible for a loan under this program.
(f) The loans shall be awarded on a priority basis to qualified appli-
cants who have the greatest financial need with the highest priority given
to those applicants with the greatest financial need who were in foster
care on or before their 18th birthday or were released from foster care
prior to their 18th birthday after having graduated from high school or
completing the requirements for a general educational development
(GED) certificate while in foster care. All loans shall be awarded to res-
ident students attending area vocational technical schools, technical col-
leges, community colleges, area vocational schools or associate degree
programs at postsecondary educational institutions. Special preference
shall also be established for residents drawing unemployment compen-
sation or such residents who were laid off from employment within the
prior six months. The board may also establish preferences for workers
deemed to be eligible for North American free trade agreement transition
assistance under United States department of labor standards or the Kan-
sas department of human resources standards.
(g) Loans awarded under this program shall be awarded on an annual
basis and shall be in effect for one year unless otherwise terminated be-
fore the expiration of such period of time. Such loans shall be awarded
for the payment of tuition, fees, books, room and board and any other
necessary school related expenses.
Sec. 30. On and after July 1, 2003, K.S.A. 74-4911f is hereby
amended to read as follows: 74-4911f. (a) Subject to procedures or lim-
itations prescribed by the governor, any person who is not an employee
and who becomes a state officer may elect to not become a member of
the system. The election to not become a member of the system must be
filed within 90 days of assuming the position of state officer. Such election
shall be irrevocable. If such election is not filed by such state officer, such
state officer shall be a member of the system.
(b) Any such state officer who is a member of the Kansas public
employees retirement system, on or after the effective date of this act,
may elect to not be a member by filing an election with the office of the
retirement system. The election to not become a member of the system
must be filed within 90 days of assuming the position of state officer. If
such election is not filed by such state officer, such state officer shall be
a member of the system.
(c) Subject to limitations prescribed by the secretary of administra-
tion, the state agency employing any employee who has filed an election
as provided under subsection (a) or (b) and who has entered into an
employee participation agreement, as provided in K.S.A. 75-5524 and
amendments thereto for deferred compensation pursuant to the Kansas
public employees deferred compensation plan shall contribute to such
plan on such employee's behalf an amount equal to 8% of the employee's
salary, as such salary has been approved pursuant to K.S.A. 75-2935b and
amendments thereto or as otherwise prescribed by law.
(d) As used in this section and K.S.A. 74-4927k and amendments
thereto, ``state officer'' means the secretary of administration, secretary
on aging, secretary of commerce
and housing , secretary of corrections,
secretary of health and environment, secretary of human resources, sec-
retary of revenue, secretary of social and rehabilitation services, secretary
of transportation, secretary of wildlife and parks, superintendent of the
Kansas highway patrol, secretary of agriculture, executive director of the
Kansas lottery, executive director of the Kansas racing commission, pres-
ident of the Kansas development finance authority, state fire marshal,
state librarian, securities commissioner, adjutant general, members of the
state board of tax appeals, members of the Kansas parole board, members
of the state corporation commission, any unclassified employee on the
staff of officers of both houses of the legislature, any unclassified em-
ployee appointed to the governor's or lieutenant governor's staff and any
person employed by the legislative branch of the state of Kansas, other
than any such person receiving service credited under the Kansas public
employees retirement system or any other retirement system of the state
of Kansas therefor, who elected to be covered by the provisions of this
section as provided in subsection (e) of K.S.A. 46-1302 and amendments
thereto or who is first employed on or after July 1, 1996, by the legislative
branch of the state of Kansas.
(e) The provisions of this section shall not apply to any state officer
who has elected to remain eligible for assistance by the state board of
regents as provided in subsection (a) of K.S.A. 74-4925 and amendments
thereto.
Sec. 31. On and after July 1, 2003, K.S.A. 74-5002o is hereby
amended to read as follows: 74-5002o. The secretary of commerce
and
housing
may organize the department of commerce and housing in the
manner the secretary
of commerce deems most efficient, so long as the
same is not in conflict with law. The secretary may establish policies gov-
erning the transaction of business of the department and the administra-
tion of the department. Division heads and employees of the department
of commerce
and housing not within a particular division shall perform
such duties and exercise such powers as are prescribed by law and such
other duties as the secretary of commerce
and housing may prescribe,
and such person shall act for, and exercise the powers of, the secretary
of commerce
and housing to the extent authority to do so is delegated by
the secretary of commerce
and housing to them. Personnel of each di-
vision shall perform such duties and exercise such powers as the head of
the division may prescribe and such duties and powers as are prescribed

by law. Personnel of each division shall act for, and exercise the powers
of, their division head to the extent authority to do so is delegated by the
division head.
Sec. 32. On and after July 1, 2003, K.S.A. 74-5049 is hereby
amended to read as follows: 74-5049. (a) In order to insure that the de-
partment of commerce
and housing is effectively administering this act,
the department shall cooperate with the standing committee on com-
merce of the senate, the standing committee on new economy of the
house of representatives and the joint committee on economic develop-
ment and Kansas, Inc., in the performance of an independent perform-
ance review of the activities of the department and the departmental
divisions. The review shall include, but not be limited to: (1) An assess-
ment of the impacts of the department's programs corresponding to the
strategic plans of the department and the departmental divisions; (2) a
comparative assessment of the relative impact of the department's pro-
grams with similar programs in other states; and (3) a comparative as-
sessment of the targeting of the department's programs by size and sector
of economic activity, and by location in different areas of the state. The
review shall be completed or updated at least once every three years.
(b) On or before October 1, the department shall prepare and publish
an annual report, which shall be made widely available, of its activities
and expenditures for the information of the governor, the standing com-
mittee on commerce of the senate, the standing committee on new econ-
omy of the house of representatives and the joint committee on economic
development, Kansas, Inc., and the public, and shall, from time to time,
submit recommendations to the governor concerning legislation found to
be necessary or desirable in effecting the purposes of this act. The annual
report shall include any information which the department is required to
report by law. The annual report shall specifically account for the ways
in which the purposes of the department and its divisions as described in
this act have been achieved, and the recommendations shall specifically
note what changes in the activities of the department and its divisions,
and of state government are necessary to better address the purposes
described in this act. The annual report to the standing committee on
commerce of the senate, the standing committee on new economy of the
house of representatives and the joint committee on economic develop-
ment shall be made by the department either (1) by publishing such
report on the internet and by notifying each member of the committees
that the report is available and providing, as part of such notice, the
uniform resource locator (URL) at which such report is available, or (2)
by submitting copies of such report on CD-ROM or other electronically
readable media to such committees.
Sec. 33. On and after July 1, 2003, K.S.A. 74-5073 is hereby
amended to read as follows: 74-5073. (a) There is hereby established the
Kansas export loan guarantee review committee within the department
of commerce
and housing . The committee shall consist of five members
all of whom have appropriate experience and expertise in areas of com-
mercial finance. At least two members shall have experience in commer-
cial finance from the perspective of a borrower and at least two members
shall have experience and expertise in international finance. The members
of the committee shall be appointed by the governor, subject to confir-
mation by the senate as provided in K.S.A. 75-4315b and amendments
thereto. Except as provided by K.S.A. 46-2601, and amendments thereto,
no person appointed to the committee shall exercise any power, duty or
function as a member of the committee until confirmed by the senate.
Except as provided by subsection (b), members shall serve until a suc-
cessor is appointed and confirmed. Not more than three members of the
committee shall be of the same political party.
(b) The terms of members who are serving on the committee on the
effective date of this act shall expire on January 15, of the year in which
such member's term would have expired under the provisions of this
section prior to amendment by this act. Thereafter, members shall be
appointed for terms of four years and until their successors are appointed
and confirmed.
(c) The committee shall review all proposals for Kansas export loan
financing guarantees under K.S.A. 74-5072 and amendments thereto and
shall approve those proposals that the committee deems to represent
reasonable risks and to have a sufficient likelihood of repayment. The
committee shall advise the secretary of commerce
and housing on matters
under this act when requested by the secretary and may provide such
advice when deemed appropriate by the committee. The committee shall
submit an annual report of its activities as a part of the department's
annual report pursuant to K.S.A. 74-5049, and amendments thereto.
(d) The secretary of commerce
and housing shall serve as a nonvoting
chairperson of the committee, and the committee shall annually elect a
vice-chairperson from among its members. The committee shall meet
upon call of the chairperson or upon call of any two of its members. Three
voting members shall constitute a quorum for the transaction of business.
(e) Members of the Kansas export loan guarantee review committee
attending meetings of the committee, or attending a subcommittee meet-
ing thereof authorized by the committee, shall be paid compensation,
subsistence allowances, mileage and other expenses as provided in K.S.A.
75-3223 and amendments thereto.
Sec. 34. On and after July 1, 2003, K.S.A. 74-5074 is hereby
amended to read as follows: 74-5074. (a) There is hereby established the
Kansas export loan guarantee fund in the state treasury. The Kansas ex-
port loan guarantee fund shall be administered by the secretary of com-
merce
and housing . All moneys in the Kansas export loan guarantee fund
shall be used to provide guarantees against commercial preexport and
postexport credit risks in accordance with this act.
(b) All moneys received for Kansas export loan financing guarantee
fees under K.S.A. 74-5072, and amendments thereto, shall be remitted
to the state treasurer in accordance with the provisions of K.S.A. 75-4215,
and amendments thereto. Upon receipt of each such remittance, the state
treasurer shall deposit the entire amount in the state treasury to the credit
of the Kansas export loan guarantee fund.
(c) On or before the 10th of each month, the director of accounts
and reports shall transfer from the state general fund to the Kansas export
loan guarantee fund interest earnings based on:
(1) The average daily balance of moneys in the Kansas export loan
guarantee fund for the preceding month; and
(2) the net earnings rate of the pooled money investment portfolio
for the preceding month.
Sec. 35. On and after July 1, 2003, K.S.A. 74-5082 is hereby
amended to read as follows: 74-5082. (a)
On and after July 1, 2003, there
is hereby established within
and as a part of the division of community
development the office
the Kansas development finance authority a di-
vision
of housing the head of which shall be the director of housing.
Under the supervision of the
director of community development presi-
dent of the Kansas development finance authority
, the director of housing
shall administer the office division of housing.
(b) Subject to and in accordance with
appropriations actsthe provi-
sions of K.S.A. 74-8901 et seq., and amendments thereto
, the officedivi-
sion
of housing is hereby authorized and empowered to:
(1) Prepare, from time to time amend, and administer the state hous-
ing plan in accordance with criteria of the federal department of housing
and urban development;
(2) serve as a clearinghouse and single point of contact for the state
regarding information, programs, and resources related to affordable and
accessible housing;
(3) provide access and management of federal housing programs for
delivery to the citizens and businesses of Kansas;
(4) work with existing agencies, organizations, and social programs to
assist in the development of affordable and accessible housing; and
(5) exercise such other powers and perform such other duties as may
be prescribed by law.
(c) The
officedivision of housing shall prepare and submit to the
governor and the legislature an annual report regarding administration of
the state housing plan.
Sec. 36. On and after July 1, 2003, K.S.A. 74-5084 is hereby
amended to read as follows: 74-5084. Whenever the designation of a state
agency is required by any federal act or program under which federal
financial assistance is made available for housing or housing related pur-
poses, the
department of commerce division of housing in the Kansas
development finance authority
shall serve as the officially designated state
agency of Kansas and such
departmentdivision shall be responsible for
exercising the powers and performing the functions and duties required
of state agencies under such federal acts and programs.
Sec. 37. On and after July 1, 2003, K.S.A. 74-5086a is hereby
amended to read as follows: 74-5086a. (a) There is hereby established in
the state treasury the state housing trust fund. All moneys credited to the
state housing trust fund shall be used for the purposes of housing pro-
grams and services including, but not limited to, the provision of financial
programs for the repair, rehabilitation and improvement of existing res-
idential housing, accessibility modifications, rental subsidies and the pro-
vision of housing services and assistance to persons having low or mod-
erate income and disabled persons.
(b) The state housing trust fund shall be administered by the
office
division
of housing ofin the department of commerce and housingKansas
development finance authority
. All expenditures from the state housing
trust fund shall be in accordance with appropriations acts upon warrants
of the director of accounts and reports issued pursuant to vouchers ap-
proved by the secretary of commerce and housing or the secretary's des-
ignee.

(c) The
office division of housing and the department of commerce
and housing
Kansas development finance authority are hereby authorized
to apply for and receive available public or private grants, gifts and do-
nations for the purposes of housing programs and services. All such
grants, gifts and donations shall be remitted to the
state treasurer in ac-
cordance with the provisions of K.S.A. 75-4215, and amendments thereto.
Upon receipt of each such remittance, the state treasurer shall deposit
the entire amount in the state treasury and all such grants, gifts and
donations, which are not required to be credited in a separate special
revenue fund, shall be credited to the state housing trust fund. All moneys
received by the department of commerce and housing for fees related to
housing shall be remitted to the state treasurer in accordance with the
provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of

each such remittance, the state treasurer shall deposit the entire amount
in the state treasury and such moneys, which are not required to be

credited in a separate special revenue fund, shall be credited to the state
housing trust fund
division of housing in the Kansas development finance
authority
.
(d) On or before the 10th of each month, the director of accounts
and reports shall transfer from the state general fund to the state housing
trust fund interest earnings based on:
(1) The average daily balance of moneys in the state housing trust
fund for the preceding month; and
(2) the net earnings rate for the pooled money investment portfolio
for the preceding month.
Sec. 38. On and after July 1, 2003, K.S.A. 74-5089 is hereby
amended to read as follows: 74-5089. (a) There is hereby established a
state matching grant program to provide assistance in the promotion of
tourism and development of quality tourist attractions within the state of
Kansas. Grants awarded under this program shall be limited to not more
than 40% of the cost of any proposed project. Applicants shall not utilize
any state moneys to meet the matching requirements under the provisions
of this program. Both public and private entities shall be eligible to apply
for a grant under the provisions of this act. Not less than 75% of all
moneys granted under this program shall be allocated to public entities
or entities exempt from taxation under the provisions of 501(c)(3) of the
federal internal revenue code of 1986 and amendments thereto. After
July 1, 1994, no more than 20% of moneys granted to public or nonprofit
entities shall be granted to any single such entity. Furthermore, after July
1, 1994, no more than 20% of moneys granted to private entities shall be
granted to any single such entity. The secretary of commerce
and housing
shall administer the provisions of this act and the secretary may adopt
rules and regulations establishing criteria for qualification for a matching
grant and such other matters deemed necessary by the secretary for the
administration of this act.
(b) For the purpose of K.S.A. 74-5089 through 74-5091, and amend-
ments thereto, ``tourist attraction'' means a site that is of significant in-
terest to tourists as a historic, cultural, scientific, educational, recreational
or architecturally unique site, or as a site of natural scenic beauty or an
area naturally suited for outdoor recreation, however, under no circum-
stances shall ``tourist attraction'' mean a race track facility, as defined in
K.S.A. 74-8802, and amendments thereto, or any casino or other estab-
lishment which operates class three games, as defined in the 1991 version
of 25 USC 2703.
(c) During the fiscal year 1997, Kansas Inc. shall commission an anal-
ysis of this program's impact on tourism. The analysis shall include a
recommendation for continuation, discontinuation or alteration of the
program.

Sec. 39. On and after July 1, 2003, K.S.A. 74-5091 is hereby
amended to read as follows: 74-5091. (a) There is hereby established the
Kansas tourist attraction matching grant development fund in the state
treasury. The Kansas tourist attraction matching grant development fund
shall be administered by the secretary of commerce
and housing . All
moneys in the Kansas tourist attraction matching grant development fund
shall be used to provide matching grants to provide assistance in the
promotion of tourism and the development of quality tourist attractions
within this state in accordance with this act.
(b) All moneys received pursuant to subsection (c) of K.S.A. 74-
5032a, and amendments thereto, shall be remitted to the state treasurer
in accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the Kansas
tourist attraction matching grant development fund.
(c) On or before the 10th of each month, the director of accounts
and reports shall transfer from the state general fund to the Kansas tourist
attraction matching grant development fund interest earnings based on:
(1) The average daily balance of moneys in the Kansas tourist attrac-
tion matching grant development fund for the preceding month; and
(2) the net earnings rate for the pooled money investment portfolio
for the preceding month.
Sec. 40. On and after July 1, 2003, K.S.A. 74-5095 is hereby
amended to read as follows: 74-5095. (a) There is hereby established the
community strategic planning grant committee which is composed of the
following:
(1) The president of Kansas, Inc., who shall act as chairperson;
(2) the director of the national institute for rural development or the
director's designee;
(3) one member from the Kansas association of counties;
(4) one member from the Kansas league of municipalities;
(5) one member from the Kansas industrial developers association
who is also from a metropolitan county; and
(6) one member with extensive knowledge of urban revitalization or
public finance or both who shall be appointed by the secretary of com-
merce
and housing.
(b) Members designated in subsections (a)(3), (4) and (5) shall be
appointed by the secretary of commerce
and housing in consultation with
the respective associations named therein.
(c) The committee is hereby attached to the department of com-
merce
and housing as a part thereof. All budgeting, purchasing and re-
lated management functions of the committee shall be administered by
the secretary of commerce and housing. The secretary of commerce and
housing shall provide office and meeting space and such clerical and other
staff assistance as may be necessary to assist the committee in carrying
out its powers, duties and functions under this act.
(d) Members of the committee attending meetings of the committee,
or attending a subcommittee meeting thereof authorized by the commit-
tee, may be paid compensation, subsistence allowances, mileage and
other expenses as provided in K.S.A. 75-3223 and amendments thereto.
Sec. 41. On and after July 1, 2003, K.S.A. 74-5096 is hereby
amended to read as follows: 74-5096. The department of commerce
and
housing
shall administer the provisions of this act to provide:
(a) Grants to city-county economic development organizations, lo-
cated in nonmetropolitan counties, for the development and implemen-
tation of county-wide economic development strategy plans.
(b) Grants to neighborhood revitalization organizations, located in
metropolitan counties, for the development and implementation of urban
revitalization strategy plans.
Sec. 42. On and after July 1, 2003, K.S.A. 74-5097 is hereby
amended to read as follows: 74-5097. (a) Subject to the provisions of
appropriations acts and in accordance with the provisions of this act, the
department of commerce
and housing may provide planning grants and
action grants to city-county economic development organizations located
in nonmetropolitan counties, for the development and implementation of
countywide economic development strategy plans or to neighborhood re-
vitalization organizations, in metropolitan counties, for the planning and
implementation of urban economic development plans.
(b) The committee shall establish grant eligibility criteria for appli-
cants in both metropolitan and nonmetropolitan counties, and shall ad-
minister the competitive selection process for the awarding of planning
grants and action grants. The committee shall submit its recommenda-
tions for grant awards to the secretary of commerce
and housing for final
determination and award.
(1) Grant applicants from nonmetropolitan counties shall be subject
to the following conditions. Planning grants shall be for the development
of countywide economic development strategy plans. No planning grant
shall exceed $15,000 for any single county economic development plan.
An additional award for an amount not to exceed $5,000 may be granted
for each additional county participating in the development of a joint
multi-county strategic economic development plan, except that under no
circumstances shall the total planning grant exceed $35,000. Any city-
county economic development organization receiving a planning grant
shall be required to provide additional funds equaling 25% of the amount
of the planning grant. Action grants shall be for the implementation of
countywide economic development strategy plans. Total action grants
shall not exceed $25,000 for any single county action grant application.
An additional award for an amount not to exceed $10,000 may be granted
for each additional county participating in a joint multi-county action
grant implementation effort, except that under no circumstances shall the
action grant totals exceed $65,000. Any city-county economic develop-
ment organization receiving a grant shall be required to provide additional
funds equaling 100% of the amount of the action grant. Not more than
one planning grant may be awarded to any one county or combination of
counties.
(2) Neighborhood revitalization organizations from metropolitan
counties shall be subject to the following conditions. Prior to applying to
the committee, the neighborhood revitalization organization must submit
its application to a local economic development organization designated
by the county commission of the county in which the organization is
located. The local economic development organization shall review the
application and determine whether the application should be funded on
the basis of local needs and priorities. If the application is approved by
the local economic development organization and endorsed by resolution
by the county commission and the governing body of the city in which
the blighted area is located, the application shall be forwarded to the
committee for further consideration. Planning grants shall be for the de-
velopment of urban economic development strategy plans. No planning
grant shall exceed $15,000 for any single urban economic development
plan. Any neighborhood revitalization organization receiving a planning
grant shall be required to provide additional funds equaling 25% of the
amount of the planning grant. Action grants shall be for the implemen-
tation of urban economic development strategy plans. Total action grants

shall not exceed $25,000 for any single urban action grant application.
Any neighborhood revitalization organization receiving a grant shall be
required to provide additional funds equaling 100% of the amount of the
action grant. Not more than one planning grant may be awarded to any
one neighborhood revitalization organization.
(3) No funds shall be granted under this act to applicants from met-
ropolitan counties unless such funds are specifically appropriated for that
purpose.
(4) The secretary of commerce
and housing may authorize a recipient
of a planning grant, who has unexpended funds from such planning grant,
to apply such funds to the implementation of the recipient's approved
strategic economic development plan. Any unexpended planning grant
funds applied to the implementation of such strategic economic devel-
opment plan shall require the appropriate 100% match. Application of
the unexpended planning grant funds to the implementation of the stra-
tegic economic development plan may result in the reduction of any sub-
sequent action grant awarded to the recipient.
(c) The secretary of commerce
and housing may enter into an agree-
ment with economic development service providers to provide reim-
bursement to such providers for expenses incurred in strategic planning
activities which do not relate to the facilitation of a specific strategic plan.
Such activities may include, but are not limited to, preapplication con-
sulting and maintenance of economic development data bases. Such ex-
penses shall be paid on a per project basis and must be preapproved by
the secretary.
(d) Each city-county economic development organization or neigh-
borhood revitalization organization which has received a planning grant
beginning on and after July 1, 1990, shall assess the effectiveness of the
strategic planning process under this program and the local preparedness
in engaging in such process. Such assessment shall be submitted to the
Kansas department of commerce
and housing within three months after
completion of a strategic plan. The status report developed pursuant to
subsection (f) shall include a summary of all strategic plan assessments
received for a twelve-month period prior to the submittal of the report
to the joint committee on economic development. However, the summary
may not include assessments submitted within 30 days of the submittal
of the department's report. Any such assessments shall be included in a
subsequent annual report.
(e) Each city-county economic development organization or neigh-
borhood revitalization organization which has received an action grant
beginning on and after July 1, 1990, shall assess the extent to which goals
identified in its action plan application have been met. Such assessment
shall rely on quantifiable criteria to the greatest possible degree. Such
assessment shall be submitted to the Kansas department of commerce

and housing
within three months after intended actions identified for
implementation in the action grant application have been undertaken.
The status report developed pursuant to subsection (f) shall include a
summary of all action plan assessments received for a twelve-month pe-
riod prior to the submittal of the report to the joint committee on eco-
nomic development. However, the summary may not include assessments
submitted within 30 days of the submittal of the department's report. Any
such assessments shall be included in a subsequent annual report.
(f) As a part of the annual report required pursuant to K.S.A. 74-
5049, and amendments thereto, the Kansas department of commerce
and
housing
shall present a status report of activities including, but not limited
to, specifics of community strengths and weaknesses and planning issues
and strategies under the provisions of this act to the joint committee on
economic development.
Sec. 43. On and after July 1, 2003, K.S.A. 74-50,103 is hereby
amended to read as follows: 74-50,103. As used in the IMPACT act unless
the context clearly requires otherwise:
(a) ``Act'' means the Kansas investments in major projects and com-
prehensive training act.
(b) ``Agreement'' means the agreement among an employer, an ed-
ucational institution and the secretary of commerce
and housing con-
cerning a SKILL project or a combined SKILL project and major project
investment and the agreement between an employer and the secretary of
commerce
and housing concerning a major project investment.
(c) ``Bond'' means a public purpose bond issued for IMPACT projects
by the Kansas development finance authority.
(d) ``Date of commencement of the project'' means the date of the
agreement.
(e) ``Educational institution'' means a community college, as defined
by K.S.A. 71-701, and amendments thereto, an area vocational school or
area vocational-technical school, as defined by K.S.A. 72-4412, and
amendments thereto, a university, as defined by K.S.A. 72-6501, and
amendments thereto, or a state educational institution, as defined by
K.S.A. 76-711, and amendments thereto.
(f) ``Employee'' means a person employed in a new or retained job.
(g) ``Employer'' means a Kansas basic enterprise providing new jobs
or retaining existing jobs in conjunction with a project.
(h) ``IMPACT program'' or ``program'' means the major project in-
vestments and SKILL projects undertaken by the department of com-
merce
and housing in accordance with the provisions of this act for a new
or expanding Kansas basic enterprise.
(i) ``IMPACT project'' or ``project'' means a SKILL project, major
project investment or a combination of the two.
(j) ``Kansas basic enterprise'' means any enterprise:
(1) Which is located or principally based in Kansas; and
(2) which can provide demonstrable evidence that:
(A) It is primarily engaged in any one or more of the Kansas basic
industries; or
(B) it is primarily engaged in the development or production of goods
or the provision of services for out-of-state sale; or
(C) it is primarily engaged in the production of goods or the provision
of services which will attract out-of-state buyers or consumers into the
state; or
(D) it is primarily engaged in the production of raw materials, ingre-
dients, or components for other enterprises which export the majority of
their products from the state; or
(E) it is a national or regional enterprise which is primarily engaged
in interstate commerce or an affiliated management company of such an
enterprise; or
(F) it is primarily engaged in the production of goods or the provision
of services which will supplant goods or services which would be imported
into the state; or
(G) it is the corporate or regional headquarters of a multistate enter-
prise which is primarily engaged in out-of-state industrial activities.
(k) ``Kansas basic industry'' means:
(1) Agriculture;
(2) mining;
(3) manufacturing;
(4) interstate transportation;
(5) wholesale trade which is primarily multistate in activity or which
has a major import supplanting effect within the state;
(6) financial services which are provided primarily for interstate or

international transactions;
(7) business services which are provided primarily in out-of-state
markets;
(8) research and development of new products, processes, or tech-
nologies; or
(9) tourism activities which are primarily engaged in for the purpose
of attracting out-of-state tourists.
(l) ``Major project investment'' or ``investment'' means financial assis-
tance to an employer to defray business costs including, but not limited
to, relocation expenses, building and equipment purchases, labor recruit-
ment and job retention.
(m) ``New job'' means a job in a new or expanding Kansas basic en-
terprise not including jobs of recalled workers, or existing jobs that are
vacant or other jobs that formerly existed in the Kansas basic enterprise
in Kansas.
(n) ``Primarily engaged'' means engagement in an activity by an en-
terprise to the extent that not less than 51% of the gross income of the
enterprise is derived from such engagement.
(o) ``Program costs'' means all necessary and incidental costs of pro-
viding program services, except that program costs shall not include: (1)
Any wages paid to persons receiving education or training under a project,
(2) any costs for purchase or lease of training equipment that exceed 50%
of total program costs for the project, and (3) any costs for administrative
expenses of educational institutions that exceed 10% of total program
costs for the project.
(p) ``Program services'' means:
(1) New jobs training, including training development costs, except
that the actual training period for any new job shall not exceed 36 months
from the date the job is first filled by an employee;
(2) adult basic education and job-related instruction;
(3) vocational and skill-assessment services and testing;
(4) training equipment for education institutions;
(5) material and supplies;
(6) administrative expenses of educational institutions for new jobs
training programs;
(7) subcontracted services with other educational institutions, private
colleges or universities or other federal, state or local agencies; and
(8) contracted or professional service;
(9) major project investments.
(q) ``Retained job'' means an existing job which will be lost without
participation by the employer under the provisions of the IMPACT pro-
gram.
(r) ``SKILL project'' means a training arrangement which is the sub-
ject of an agreement entered into between the educational institution and
an employer to provide program services.
Sec. 44. On and after July 1, 2003, K.S.A. 74-50,104 is hereby
amended to read as follows: 74-50,104. (a) The secretary of commerce

and housing
shall administer the provisions of this act and the IMPACT
program established thereunder. The secretary of commerce
and housing
shall encourage Kansas basic enterprises with similar training needs to
cooperate in establishing SKILL projects. The secretary of commerce
and
housing
shall coordinate the SKILL program with other job training pro-
grams administered by the department of commerce
and housing . The
secretary of commerce
and housing shall provide opportunities for co-
ordination and cooperation of SKILL projects with other job training
activities in Kansas.
(b) The secretary of commerce
and housing shall adopt rules and
regulations as follows: (1) Prescribing review standards and priorities for
approval of proposed agreements under this act, including appropriate
incentives for cooperation among projects, in order to maximize the num-
ber of new jobs created with respect to individual Kansas basic enter-
prises, which will remain in Kansas, and (2) prescribing limits on program
costs and on project and program size in relation to the number of new
jobs created or the wages of new jobs created. No agreement shall be
approved which provides for program costs of a project under the agree-
ment of more than 90% of the amount equal to the estimated rate of
withholding tax applied to the estimated amount of gross wages of all the
new jobs under the project over a ten-year period.
(c) Notice of the approval of a project or program under the IMPACT
act shall be provided to the chairpersons of the senate committee on
commerce and the committee on economic development of the house of
representatives.
(d) The secretary of commerce
and housing may adopt such other
rules and regulations as may be required for the implementation and
administration of this act.
Sec. 45. On and after July 1, 2003, K.S.A. 74-50,105 is hereby
amended to read as follows: 74-50,105. (a) Subject to the approval of the
secretary of commerce
and housing , an educational institution may enter
into an agreement to establish a project and provide program services to
an employer. As soon as possible after initial contact between an educa-
tional institution and an employer regarding the possibility of entering
into an agreement, the educational institution shall inform the secretary
of commerce
and housing about the potential project. If an agreement is
entered into, the educational institution and the employer shall notify the
secretary of revenue
withwithin 15 calendar days.
(b) Among other provisions, an agreement shall include:
(1) Provisions regarding payment of program costs, including de-
ferred costs, which may be paid from one or a combination of the follow-
ing sources:
(A) The IMPACT program services fund;
(B) tuition, student fees, or special charges fixed by the educational
institution to defray program costs in whole or in part; and
(C) grants or donations available from federal agencies or other pub-
lic or private sources;
(2) a provision requiring each Kansas basic enterprise under the
agreement to submit information to the secretary of commerce
and hous-
ing
regarding the numbers of new jobs and the wages and withholding
taxes paid therefor;
(3) a provision which fixes any tuition and fee payments which shall
be paid for program costs; and
(4) a provision which fixes an amount that shall be paid by an em-
ployer if an agreement is terminated or any provision of the agreement
is breached by the employer prior to satisfaction of all of the employer's
obligations under the agreement and which prescribes that any such pay-
ment shall be deposited in the state treasury to the credit of the IMPACT
program services fund.
(c) Any payment required to be made by an employer shall be a lien
upon the employer's business property until paid and has equal prece-
dence with ordinary taxes and shall not be divested by a judicial sale.
Property subject to the lien may be sold for sums due and delinquent at
a tax sale, with the same forfeitures, penalties and consequences as for
the nonpayment of ordinary taxes. The purchasers at tax sale obtain the
property subject to the remaining payments.
(d) The payment of program costs incurred under any agreement
shall not be deferred for a period longer than 10 years from the date of

the commencement of the project.
Sec. 46. On and after July 1, 2003, K.S.A. 74-50,106 is hereby
amended to read as follows: 74-50,106. (a) The secretary of commerce

and housing
shall review applications for proposed agreements submitted
by employers in accordance with the standards and guidelines prescribed
by this act and by rules and regulations adopted under K.S.A. 74-50,104,
and amendments thereto. Each application for approval of a proposed
agreement shall be accompanied by information about the number and
wages of the new or retained jobs created by the employer, documenta-
tion of existing training activities of the employer and such other infor-
mation as may be required by the secretary of commerce
and housing .
(b) The secretary of commerce
and housing may pool the funding
requirements of projects which are the subject of proposed agreements
to determine the funding requirements of the SKILL projects under con-
sideration to facilitate the issuance of bonds by the Kansas development
finance authority.
(c) The secretary of commerce
and housing is hereby authorized to
expend funds raised pursuant to this act on major project investments.
The secretary shall adopt guidelines consistent with this act concerning
firm eligibility for major project investments and shall otherwise admin-
ister the major project investment portion of the IMPACT act.
(d) In order for an employer to be eligible for a major project in-
vestment, the employer must:
(1) Annually make an investment in training and education of the
employer's employees that exceeds 2% of the employer's total annual
payroll costs; or
(2) agree that a portion of any funds available under the agreement
be spent directly on employee education and training.
(e) An employer not creating new jobs shall not be eligible for par-
ticipation in an IMPACT program unless the employer meets the follow-
ing criteria: (1) Maintains a minimum of 250 retained jobs; (2) makes a
capital investment of at least $50,000,000; and (3) the secretary of com-
merce
and housing finds that the program or project will be a major factor
in the Kansas basic enterprise remaining in Kansas.
(f) Prior to obtaining financing from the Kansas development finance
authority for any project, group of projects or major project investment
for one or more employers, the secretary of commerce
and housing shall
present each such project to the governor's council on work force training
and investment for review and approval. No agreement shall be approved
by the secretary of commerce
and housing unless each project under the
agreement has been reviewed and finally approved by the governor's
council on work force training and investment.
Sec. 47. On and after July 1, 2003, K.S.A. 74-50,107 is hereby
amended to read as follows: 74-50,107. (a) The secretary of commerce

and housing
shall determine and from time to time shall redetermine the
rate at which moneys shall be credited to the IMPACT program repay-
ment fund in order to satisfy all bond repayment obligations which have
been incurred to finance program costs for IMPACT programs (which
shall be referred to as the debt service rate) and the rate at which moneys
shall be credited to the IMPACT program services fund in order to fi-
nance program costs that are not financed by bonds (which shall be re-
ferred to as the direct funding rate). The total of the debt service rate
and the direct funding rate shall be the combined rate. Each rate so
determined shall be certified to the secretary of revenue. On and after
July 1, 2003, the combined rate determined under this subsection shall
not exceed 1.5%. On and after July 1, 2005, the combined rate deter-
mined under this subsection shall not exceed 2%.
(b) Upon receipt of the rates determined and certified under sub-
section (a), the secretary of revenue shall apply daily the combined rate
to that portion of the moneys withheld from the wages of individuals and
collected under the Kansas withholding and declaration of estimated tax
act K.S.A. 79-3294
et seq., and amendments thereto. The amount so de-
termined shall be credited as follows: (1) The portion attributable to the
debt service rate shall be credited to the IMPACT program repayment
fund, and (2) the remaining portion shall be credited to the IMPACT
program services fund.
The aggregate of all amounts credited to the IMPACT program repay-
ment fund under this section during any fiscal year to pay bond repayment
obligations on bonds to finance major project investments shall not exceed
10% of the amount which results when the rate of 1% is applied to all
money withheld from the wages of individuals and received under the
Kansas withholding and declaration of estimated tax act.
On and after July 1, 2003, the aggregate of all amounts credited to the
IMPACT program repayment fund under this section during any fiscal
year to pay bond repayment obligations on bonds to finance major project
investments shall not exceed 10% of the amount which results when the
rate of 1.5% is applied to all moneys withheld from the wages of individ-
uals and received under the Kansas withholding and declaration of esti-
mated tax act.
On and after July 1, 2005, the aggregate of all amounts credited to the
IMPACT program repayment fund under this section during any fiscal
year to pay bond repayment obligations on bonds to finance major project
investments shall not exceed 10% of the amount which results when the
rate of 2% is applied to all money withheld from the wages of individuals
and received under the Kansas withholding and declaration of estimated
tax act.
Sec. 48. On and after July 1, 2003, K.S.A. 74-50,108 is hereby
amended to read as follows: 74-50,108. There is hereby created in the
state treasury the IMPACT program services fund. The secretary of com-
merce
and housing shall administer the IMPACT program services fund.
All moneys credited to the SKILL program services fund shall be for all
or part of the program costs of projects or major project investments
approved by the secretary of commerce
and housing under this act, except
that moneys in the IMPACT program services fund which are not re-
quired to pay program costs or major projects investments may be trans-
ferred to the state general fund in accordance with provisions of appro-
priation acts. All expenditures from the IMPACT program services fund
shall be for the purposes of paying program costs and shall be made in
accordance with appropriations acts upon warrants of the director of ac-
counts and reports issued pursuant to vouchers approved by the secretary
of commerce
and housing or the secretary's designee. The secretary of
commerce
and housing shall remit all moneys received under this act,
including the proceeds of bonds issued by the Kansas development fi-
nance authority for the purposes of this act to the state treasurer in ac-
cordance with the provisions of K.S.A. 75-4215, and amendments thereto.
Upon receipt of each such remittance, the state treasurer shall deposit
the entire amount in the state treasury to the credit of the IMPACT
program services fund.
Sec. 49. On and after July 1, 2003, K.S.A. 74-50,109 is hereby
amended to read as follows: 74-50,109. (a) There is hereby created in the

state treasury the IMPACT program repayment fund. The secretary of
commerce shall administer the IMPACT program repayment fund. Ex-
cept as provided in subsection (c), all moneys credited to the IMPACT
program repayment fund shall be to make payments to the Kansas de-
velopment finance authority for payment of costs relating to the retire-
ment of bonds issued to finance projects approved by the secretary of
commerce
and housing under this act, including but not limited to the
principal of and interest on such bonds and the expenses of issuance. All
expenditures from the IMPACT program repayment fund shall be made
in accordance with appropriations acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the sec-
retary of commerce
and housing or the secretary's designee.
(b) Upon request of the secretary of commerce
and housing , the di-
rector of accounts and reports shall establish one or more reserve ac-
counts in the IMPACT program repayment fund to secure one or more
issues of bonds issued by the Kansas development finance authority for
the purposes of this act.
(c) On June 30 of each year, any unencumbered balance in the IM-
PACT program repayment fund which is not required for payment of
such expenses during the ensuing fiscal year, including any such expenses
associated with proposed investments agreements and bond issues under
consideration for such fiscal year, and which is not credited to any reserve
account in the fund, as certified by the secretary of commerce
and hous-
ing
to the director of accounts and reports, shall be transferred by the
director of accounts and reports from the IMPACT program repayment
fund to the IMPACT program services fund.
Sec. 50. On and after July 1, 2003, K.S.A. 74-50,110 is hereby
amended to read as follows: 74-50,110. The activities of the secretary of
commerce
and housing in administering and performing the powers, du-
ties and functions prescribed by the provisions of this act and providing
moneys for IMPACT programs from the proceeds of bonds issued by the
Kansas development finance authority are hereby approved for the pur-
poses of subsection (b) of K.S.A. 74-8905 and amendments thereto and
the authorization of the issuance of such bonds by the Kansas develop-
ment finance authority in accordance with that statute. The provisions of
subsection (a) of K.S.A. 74-8905 and amendments thereto shall not pro-
hibit the issuance of bonds for such purposes when so authorized and any
such issuance of bonds is exempt from the provisions of subsection (a) of
K.S.A. 74-8905 and amendments thereto.
Sec. 51. On and after July 1, 2003, K.S.A. 74-50,111 is hereby
amended to read as follows: 74-50,111. The secretary of commerce
and
housing
shall annually report on activities under the IMPACT act, pur-
suant to K.S.A. 74-5049, and amendments thereto. Each report shall con-
tain information regarding the number and characteristics of the new jobs
created or jobs retained in Kansas for which SKILL projects or major
project investments have been financed under this act, including a report
on any such new or retained jobs which do not continue to exist and the
circumstances and effect of any such discontinuances.
Sec. 52. On and after July 1, 2003, K.S.A. 74-50,114 is hereby
amended to read as follows: 74-50,114. As used in K.S.A. 74-50,113
through 74-50,117 and amendments thereto:
(a) ``Ancillary support'' means a facility which is operated by a busi-
ness and whose function is to provide services in support of the business,
but is not directly engaged in the business' primary function.
(b) ``Business'' means any manufacturing business or nonmanufac-
turing business.
(c) ``Business headquarters'' means a facility where principal officers
of the business are housed and from which direction, management or
administrative support for transactions is provided for a business or di-
vision of a business or regional division of a business.
(d) ``Full-time employee'' means a person who is required to file a
Kansas income tax return and who is employed by a business or retail
business to perform duties in connection with the operation of the busi-
ness or retail business on:
(1) A regular, full-time basis;
(2) a part-time basis, provided such person is customarily performing
such duties at least 20 hours per week throughout the taxable year; or
(3) a seasonal basis, provided such person performs such duties for
substantially all of the season customary for the position in which such
person is employed. The number of full-time employees during any tax-
able year shall be determined by dividing by 12 the sum of the number
of full-time employees on the last business day of each month of such
taxable year. If the business or retail business is in operation for less than
the entire taxable year, the number of full-time employees shall be de-
termined by dividing the sum of the number of full-time employees on
the last business day of each full calendar month during the portion of
such taxable year during which the business was in operation by the num-
ber of full calendar months during such period.
(e) ``Man ufacturing business'' means all commercial enterprises iden-
tified under the manufacturing standard industrial classification codes,
major groups 20 through 39.
(f) ``Metropolitan county'' means the county of Douglas, Johnson,
Leavenworth, Sedgwick, Shawnee or Wyandotte.
(g) ``Nonmanufacturing business'' means any commercial enterprise
other than a manufacturing business or a retail business. Nonmanufac-
turing business shall also include the business headquarters of an enter-
prise, ancillary support of an enterprise, and an enterprise designated
under standard industrial classification codes 5961, 7948-0201 or 7372
regardless of the firm's classification as a retail business if that facility for
which the sales tax exemption certificate is issued facilitates the creation
of at least 20 new full-time positions. In addition, with respect to enter-
prises in standard industrial classification code 7948-0201, such enter-
prises must operate an auto racetrack in the state involving capital im-
provements costing not less than $100,000,000.
For taxable years commencing after December 31, 1997, any ancillary
support business which would otherwise be eligible for a sales tax ex-
emption or an income, premium or privilege tax credit pursuant to this
subsection shall incorporate in its tax filing for the exemption or credit a
statement from the secretary of commerce
and housing which includes a
finding by the secretary that the job expansion incident to the exemption
or credit claimed would not have occurred in the absence of the credit
or exemption.
(h) ``Nonmetropolitan region'' means a region established under
K.S.A. 74-50,116 and amendments thereto and is comprised of any county
or counties which are not metropolitan counties.
(i) ``Retail business'' means: (1) Any commercial enterprise primarily
engaged in the sale at retail of goods or services taxable under the Kansas
retailers' sales tax act; (2) any service provider set forth in K.S.A. 17-2707,
and amendments thereto; (3) any bank, savings and loan or other lending
institution; (4) any commercial enterprise whose primary business activity
includes the sale of insurance; and (5) any commercial enterprise deriving
its revenues directly from noncommercial customers in exchange for per-

sonal services such as, but not limited to, barber shops, beauty shops,
photographic studios and funeral services.
(j) ``Secretary'' means the secretary of the Kansas department of com-
merce
and housing.
(k) ``Standard industrial classification code'' means a standard indus-
trial classification code published in the Standard Industrial Classification
manual, 1987, as prepared by the statistical policy division of the office
of management and budget of the office of the president of the United
States of America.
Sec. 53. On and after July 1, 2003, K.S.A. 74-50,115 is hereby
amended to read as follows: 74-50,115. (a) A manufacturing business may
be eligible for a sales tax exemption under the provisions of subsection
(cc) of K.S.A. 79-3606, and amendments thereto, if the manufacturing
business complies with the following requirements:
(1) A manufacturing business shall provide documented evidence of
job expansion involving the employment of at least two additional full-
time employees; and
(2) a manufacturing business located within the state of Kansas that
has documented evidence of job expansion as provided in paragraph (1),
which relocates in another city or county within the state of Kansas must
receive approval from the secretary prior to qualifying for the sales tax
exemption in subsection (cc) of K.S.A. 79-3606, and amendments thereto,
except that approval by the secretary shall not be required if the manu-
facturing business relocates within the same city.
(b) A nonmanufacturing business may be eligible for a sales tax ex-
emption under the provisions of subsection (cc) of K.S.A. 79-3606, and
amendments thereto, if the nonmanufacturing business complies with the
following requirements:
(1) A nonmanufacturing business shall provide documented evidence
of job expansion involving the employment of at least five additional full-
time employees; and
(2) a nonmanufacturing business located within the state of Kansas
that has documented evidence of job expansion as provided in paragraph
(1), which relocates in another city or county within the state of Kansas
must receive approval from the secretary prior to qualifying for the sales
tax exemption in subsection (cc) of K.S.A. 79-3606, and amendments
thereto, except that approval by the secretary shall not be required if the
nonmanufacturing business relocates within the same city.
(c) A retail business may qualify for the sales tax exemption under
subsection (cc) of K.S.A. 79-3606, and amendments thereto, if the retail
business complies with the following requirements:
(1) A retail business shall provide documented evidence of job ex-
pansion involving the employment of at least two additional full-time em-
ployees; and
(2) (A) such retail business locates or expands to a city having a pop-
ulation of 2,500 or less, as determined by the latest United States federal
census, or (B) such retail business locates or expands prior to July 1, 2004,
to a location outside a city in a county having a population of 10,000 or
less, as determined by the latest United States federal census.
(d) Any person constructing, reconstructing, remodeling or enlarging
a facility which will be leased in whole or in part for a period of five years
or more to a business that would be eligible for a sales tax exemption
hereunder if such business had constructed, reconstructed, enlarged or
remodeled such facility or portion thereof itself shall be entitled to the
sales tax exemption under the provisions of subsection (cc) of K.S.A. 79-
3606, and amendments thereto. When such person leases less than the
total facility to an eligible business, a project exemption certificate may
be granted on: (1) The total cost of constructing, reconstructing, remod-
eling or enlarging, the facility multiplied by a fraction given by dividing
the number of leased square feet eligible for the sales tax exemption by
the total square feet being constructed, reconstructed, remodeled or en-
larged; or (2) the actual cost of constructing, reconstructing, remodeling
or enlarging that portion of the facility to be occupied by the eligible
business, as the person may elect.
(e) A business may qualify for a sales tax exemption under subsection
(cc) of K.S.A. 79-3606, and amendments thereto, without regard to any
of the foregoing requirements of this section if it is certified as a qualified
firm by the secretary of commerce
and housing pursuant to K.S.A. 74-
50,131, and amendments thereto, and is entitled to the corporate tax
credit established in K.S.A. 74-50,132, and amendments thereto, or has
received written approval for participation and has participated, during
the tax year in which the exemption is claimed, in training assistance by
the department of commerce
and housing under the Kansas industrial
training, Kansas industrial retraining or state of Kansas investments in
lifelong learning program.
(f) The secretary may adopt rules and regulations to implement and
administer the provisions of this section.
Sec. 54. On and after July 1, 2003, K.S.A. 74-50,131 is hereby
amended to read as follows: 74-50,131. Commencing after December 31,
1999: (a) As used in this act: ``Qualified firm'' means a for-profit business
establishment, subject to state income, sales or property taxes, identified
under the standard industrial classification (SIC) codes as in effect July
1, 1993, major groups 20 through 39, major groups 40 through 51, and
major groups 60 through 89; identified under the North American in-
dustry classification system (NAICS) as in effect on October 1, 2000, or
is identified as a corporate or regional headquarters or back-office oper-
ation of a national or multi-national corporation regardless of SIC code
or NAICS designation. The secretary of commerce
and housing shall de-
termine eligibility when a difference exists between a firm's SIC code and
NAICS designation. A business establishment may be assigned a standard
industrial classification code or NAICS designation according to the pri-
mary business activity at a single physical location in the state.
(b) In the case of firms in major groups 40 through 51, and major
groups 60 through 89 or the appropriate NAICS designation the business
establishment must also demonstrate the following:
(1) More than 1/2 of its gross revenues are a result of sales to com-
mercial or governmental customers outside the state of Kansas; or
(2) more than 1/2 of its gross revenues are a result of sales to Kansas
manufacturing firms within major groups 20 through 39 or the appropri-
ate NAICS designation; or
(3) more than 1/2 of its gross revenues are a result of a combination
of sales described in (1) and (2).
(c) For purposes of determining whether one of the average wage
options described in subsection (d) below is satisfied, business establish-
ments located within a metropolitan county, as defined in K.S.A. 74-
50,114, and amendments thereto, will be compared only to other busi-
nesses within that metropolitan county, and business establishments
located outside of a metropolitan county will be compared to businesses
within an aggregation of counties representing the business establish-
ment's region of the state, which regional aggregation will exclude met-
ropolitan counties. Such aggregation shall be determined by the depart-
ment of commerce
and housing.
(d) Additionally, a business establishment having met the criteria as
established in subsection (a) or (b), and using the comparison method

described in subsection (c), must meet one of the following criteria:
(1) The establishment with 500 or fewer full-time equivalent em-
ployees will provide an average wage that is above the average wage paid
by all firms with 500 or fewer full-time equivalent employees which share
the same two-digit standard industrial classification code or appropriate
NAICS designation.
(2) The establishment with 500 or fewer full-time equivalent em-
ployees is the sole firm within its two-digit standard industrial classifica-
tion code or appropriate NAICS designation which has 500 or fewer full-
time equivalent employees.
(3) The establishment with more than 500 full-time equivalent em-
ployees will provide an average wage that is above the average wage paid
by firms with more than 500 full-time equivalent employees which share
the same two-digit standard industrial classification code or appropriate
NAICS designation.
(4) The establishment with more than 500 full-time equivalent em-
ployees is the sole firm within its two-digit standard industrial classifica-
tion code or appropriate NAICS designation which has 500 or more full-
time equivalent employees, in which event it shall either provide an
average wage that is above the average wage paid by all firms with 500
or fewer full-time equivalent employees which share the same two-digit
standard industrial classification code or appropriate NAICS designation,
or be the sole firm within its two-digit standard industrial classification
code or appropriate NAICS designation.
(e) As an alternative to the requirements of subsections (c) and (d),
a firm having met the requirements of subsections (a) or (b), may qualify,
if excluding taxable disbursements to company owners, the business es-
tablishment's annual average wage must be greater than or equal to 1.5
times the aggregate average wage paid by industries covered by the em-
ployment security law based on data maintained by the secretary of hu-
man resources.
(f) For the purposes of this section, the number of full-time equiva-
lent employees shall be determined by dividing the number of hours
worked by part-time employees during the pertinent measurement in-
terval by an amount equal to the corresponding multiple of a 40-hour
work week and adding the quotient to the number of full-time employees.
(g) The secretary of commerce
and housing shall certify annually to
the secretary of revenue that a firm meets the criteria for a qualified firm
and that the firm is eligible for the benefits and assistance provided under
this act. The secretary of commerce
and housing is hereby authorized to
obtain any and all information necessary to determine such eligibility.
Information obtained under this section shall not be subject to disclosure
pursuant to K.S.A. 45-215
et seq. , and amendments thereto, but shall
upon request be made available to the legislative post audit division. The
secretary of commerce
and housing shall publish rules and regulations
for the implementation of this act. Such rules and regulations shall in-
clude, but not be limited to:
(1) A definition of ``training and education'' for purposes of K.S.A.
74-50,132, and amendments thereto.
(2) Establishment of eligibility requirements and application proce-
dures for expenditures from the high performance incentive fund created
in K.S.A. 74-50,133, and amendments thereto.
(3) Establishment of approval guidelines for private consultants au-
thorized pursuant to K.S.A. 74-50,133, and amendments thereto.
(4) Establishment of guidelines for prioritizing business assistance
programs pursuant to K.S.A. 74-50,133, and amendments thereto.
(5) A definition of ``commercial customer'' for the purpose of K.S.A.
74-50,133, and amendments thereto.
(6) A definition of ``headquarters'' for the purpose of K.S.A. 74-
50,133, and amendments thereto.
(7) Establishment of guidelines concerning the use and disclosure of
any information obtained to determine the eligibility of a firm for the
assistance and benefits provided for by this act.
Sec. 55. On and after July 1, 2003, K.S.A. 74-50,133 is hereby
amended to read as follows: 74-50,133. There is hereby created within
the department of commerce
and housing the ``high performance incen-
tive fund'' to provide matching funds for business assistance and con-
sulting services to qualified firms under the provisions of K.S.A. 74-50,131
that are entitled to a workforce training tax credit under the provisions
of K.S.A. 74-50,132 or have received written approval for and are partic-
ipating, at the time the funds are sought, in the Kansas industrial training,
Kansas industrial retraining or state of Kansas investments in lifelong
learning program, subject to appropriation of funds and program criteria,
as hereinafter provided. The department of commerce
and housing may
provide funds to qualified firms, on a matching basis, to pay up to 50%
of such firm's costs of acquiring consulting services provided by the mid-
America manufacturing technology center, or approved private consult-
ants to assist in improving the firm's management, production processes
or product or service quality. Qualified firms also shall receive priority
consideration for any other business assistance programs administered by
the department of commerce
and housing , the Kansas technology enter-
prise corporation and the mid-America manufacturing technology center.
Sec. 56. On and after July 1, 2003, K.S.A. 74-50,134 is hereby
amended to read as follows: 74-50,134. During fiscal year 1998, Kansas,
Inc. shall commission an analysis of this program. Within Kansas, Inc.'s
discretion, the analysis shall evaluate all aspects of the program, and par-
ticularly the impact of program incentives on:
(a) Job training and retraining;
(b) capital investment and related job creation;
(c) usage of consulting services to improve overall business
operations;
(d) export of goods and services outside the state; and
(e) usage of other business assistance programs administered by the
department of commerce
and housing , the Kansas technology enterprise
corporation and the mid-America manufacturing technology center. The
analysis shall include a recommendation for continuation, discontinuation
or alteration of the program. The analysis shall be reported to the joint
committee on economic development.
Sec. 57. On and after July 1, 2003, K.S.A. 74-50,151 is hereby
amended to read as follows: 74-50,151. (a) There is hereby created in the
state treasury the Kansas economic opportunity initiatives fund. Subject
to acts of the legislature applicable thereto, the moneys in the Kansas
economic opportunity initiatives fund shall be used only for the purposes
prescribed by this section.
(b) All expenditures made pursuant to this act shall be made in ac-
cordance with appropriations acts upon warrants of the director of ac-
counts and reports issued pursuant to vouchers approved by the governor
or the governor's designee. The governor may approve a warrant upon
certification, by the secretary of commerce
and housing , that an economic
emergency or unique opportunity exists which warrant funding for a stra-
tegic economic intervention by such state agency or agencies to address
expenses involved in securing economic benefits or avoiding or remedying
economic losses related to:

(1) A major expansion of an existing Kansas commercial enterprise;
(2) the potential location in Kansas of the operations of a major
employer;
(3) the award of a significant federal or private sector grant which has
a financial matching requirement;
(4) the departure from Kansas or the substantial reduction of the
operations of a major employer; and
(5) the closure or the substantial reduction of a major federal or state
institution or facility.
(c) An intervention strategy may include financial assistance in the
form of grants, loans or both. The department of commerce
and housing
shall adopt written guidelines concerning the terms and conditions of any
such loans. However, all repaid funds shall be credited to the Kansas
economic opportunity initiatives fund. No intervention strategy approved
pursuant to this act shall facilitate the moving of an existing Kansas firm
to another location within the state unless such restriction is waived by
the secretary of commerce
and housing . Every intervention strategy ap-
proved pursuant to this act shall identify the intended outcomes to be
realized by the strategy for which funding is sought.
(d) The department of commerce
and housing and Kansas, Inc. shall
make joint findings concerning the costs and benefits, on both a local and
statewide basis, of projects proposed pursuant to this act. Prior to allo-
cation of any funds pursuant to this act, the governor shall review the
cost-benefit findings performed on each project.
(e) The director of the budget and the director of the legislative re-
search department shall consult periodically and review the balance cred-
ited to and the estimated receipts to be credited to the state economic
development initiatives fund during the fiscal year. During any period
when the legislature is not in session, upon a finding by the director of
the budget in consultation with the director of the legislative research
department that the total of the unencumbered balance and estimated
receipts to be credited to the state economic development initiatives fund
during a fiscal year are insufficient to fund the budgeted expenditures
and transfers from the state economic development initiatives fund for
the fiscal year in accordance with the provisions of appropriation acts, the
director of the budget shall make a certification of such finding to the
governor. Upon approval by the governor, the director of accounts and
reports shall transfer the amount of moneys from the Kansas economic
opportunity initiatives fund to the state economic development initiatives
fund that is required, in accordance with a certification by the director
of the budget under this subsection, to fund the budgeted expenditures
and transfers from the state economic development initiatives fund for
the fiscal year in accordance with the provisions of appropriation acts, as
specified by the director of the budget pursuant to such certification.
(f) On or before the 10th day of each month, the director of accounts
and reports shall transfer from the state general fund to the state eco-
nomic development initiatives fund interest earnings based on:
(1) The average daily balance of moneys in the Kansas economic op-
portunity initiatives fund for the preceding month; and
(2) the net earnings rate for the pooled money investment portfolio
for the preceding month.
(g) A five member panel consisting of the secretary of commerce
and
housing
, the president of Kansas, Inc., the president of the Kansas tech-
nology enterprise corporation, the private sector chairperson of the board
of Kansas, Inc., and the private sector chairperson of the Kansas tech-
nology enterprise corporation shall review annually the propriety of pro-
jects funded under this section. The panel shall report its findings in
writing to the governor, the new economy committee of the house of
representatives, the senate commerce committee and the joint committee
on economic development. The report to the new economy committee
of the house of representatives, the commerce committee of the senate
and the joint committee on economic development under this subsection
shall be made either (1) by the panel by publishing such report on the
internet and by notifying each member of the committees that the report
is available and providing, as part of such notice, the uniform resource
locator (URL) at which such report is available, or (2) by submitting cop-
ies of such report on CD-ROM or other electronically readable media to
such committees.
Sec. 58. On and after July 1, 2003, K.S.A. 74-50,152 is hereby
amended to read as follows: 74-50,152. As a part of the annual report
required pursuant to K.S.A. 74-5049, and amendments thereto, the sec-
retary of commerce
and housing shall issue a report concerning the use
of the fund to the joint committee on economic development. The sec-
retary's report shall include a detailed description of how funds were
spent, what, if any, economic benefits were realized from the expendi-
tures and whether the intended outcomes identified pursuant to subsec-
tion (c) of K.S.A. 74-50,151 and amendments thereto have been realized.
The report to the joint committee on economic development under this
section shall be made by the secretary either (a) by publishing such report
on the internet and by notifying each member of the joint committee that
the report is available and providing, as part of such notice, the uniform
resource locator (URL) at which such report is available, or (b) by sub-
mitting copies of such report on CD-ROM or other electronically read-
able media to the joint committee.
Sec. 59. On and after July 1, 2003, K.S.A. 74-50,153 is hereby
amended to read as follows: 74-50,153. (a) ``Institution'' has the meaning
ascribed thereto by K.S.A. 76-12a01, and amendments thereto.
(b) Any entity which provides services which were previously pro-
vided by an institution, but which the institution no longer provides due
to the institution's closure, scheduled closure or cessation or reduction of
operation due to budget reductions, shall receive top priority considera-
tion for any business assistance program administered by the department
of commerce
and housing for which the entity is eligible. Such priority
shall be greater than the priority established in K.S.A. 74-50,133, and
amendments thereto.
(c) The provisions of this act shall expire 12 months after closure of
both Winfield state hospital and Topeka state hospital.
Sec. 60. On and after July 1, 2003, K.S.A. 74-50,156 is hereby
amended to read as follows: 74-50,156. (a) There is hereby established
within and as a part of the department of commerce
and housing the
agriculture products development division. The secretary of commerce

and housing
shall appoint a director of such division and such director
shall be in the unclassified service of the Kansas civil service act. Subject
to and in accordance with appropriations acts, the agriculture products
development division shall include: (1) All powers, duties and functions
related to the agricultural value added center pursuant to subsections (b)
and (c); (2) all powers and duties created regarding the division of markets
pursuant to K.S.A. 74-530, and amendments thereto, which are hereby
transferred; (3) all powers and duties created regarding registered trade-
marks pursuant to K.S.A. 74-540a, and amendments thereto, which are
hereby transferred; (4) all powers and duties regarding the trademark
fund pursuant to K.S.A. 74-540b, and amendments thereto, which are

hereby transferred; and (5) all powers and duties created regarding ex-
penditures and moneys credited to the market development fund pur-
suant to K.S.A. 74-540c, and amendments thereto, which are hereby
transferred.
(b) The objectives of the agricultural value added center within the
agriculture products development division shall include, but not be lim-
ited to, providing technical assistance to existing and potential value added
facilities, including incubator facilities; developing a network for collect-
ing and distributing information to individuals involved in value added
processing in Kansas; initiating pilot plant facilities to act as research and
development laboratories for existing and potential small scale value
added processing endeavors in Kansas; providing technical assistance to
new agricultural value added businesses; developing and promoting com-
munication and cooperation among private businesses; state government
agencies and public and private colleges and universities in Kansas; es-
tablishing research and development programs in technologies that have
value added commercial potential for food and nonfood agricultural prod-
ucts achieving substantial and sustainable continuing growth for the Kan-
sas economy through value added products from agriculture; serving as
a catalyst for industrial agriculture through technological innovation in
order to expand economic opportunity for all Kansas communities; estab-
lishing an industrial agriculture industry for the state of Kansas; com-
mercializing the developed industrial agriculture technology in smaller
communities and the rural areas of Kansas; and developing investment
grade agriculture value added technologies and products.
(c) Subject to the provisions of appropriations acts, the functions of
the agricultural value added center within the agriculture products de-
velopment division shall include, but not be limited to, developing a mar-
ket referral program, matching distribution to buyers in coordination with
other state agencies concerned with marketing Kansas products; assisting
private entrepreneurs in the establishment of facilities and markets for
new agricultural value added endeavors; and introducing coordinated pro-
grams to develop marketing skills of existing agricultural value adding
processors in Kansas.
(d) (1) It shall be the duty of the agriculture products development
division to perform acts and to do, or cause to be done, those things which
are designed to lead to the more advantageous marketing of agricultural
products of Kansas. For these purposes the division may:
(A) Investigate the subject of marketing farm products;
(B) promote their sales distribution and merchandising;
(C) furnish information and assistance to the public;
(D) study and recommend efficient and economical methods of
marketing;
(E) provide for such studies and research as may be deemed neces-
sary and proper;
(F) gather and diffuse timely and useful information concerning the
supply, demand, prevailing prices and commercial movement of farm
products including quantity in common storage and cold storage, in co-
operation with other public or private agencies;
(G) conduct market development activities and assist and coordinate
participation by companies, commodity organizations, trade organiza-
tions, producer organizations and other interested organizations to de-
velop new markets and sales for Kansas agricultural commodities and food
products;
(H) render assistance to any of the entities listed in subsection (G)
and development activities and make a reasonable service charge for such
services rendered by the division; and
(I) make agreements with other states and with the United States
government, or its agencies, and accept funds from the federal govern-
ment, or its agencies, or any other source for research studies, investi-
gation, market development and other purposes related to the duties of
the division.
(2) The department of commerce
and housing shall remit all moneys
received under this subsection to the state treasurer in accordance with
the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt
of each such remittance, the state treasurer shall deposit the entire
amount in the state treasury to the credit of the market development
fund. All expenditures from such fund shall be made for any purpose
consistent with this subsection and shall be made in accordance with
appropriation acts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the secretary of commerce
and
housing
or a person designated by the secretary.
(e) (1) In conjunction with any trademark registered by the depart-
ment of commerce
and housing , the agriculture products development
division is hereby authorized to:
(A) Promulgate policy regarding the use of any such trademark;
(B) print, reproduce or use the trademark in or on educational, pro-
motional or other material;
(C) fix, charge and collect fees for the use of the trademark provided
that the fees shall be fixed in an amount necessary to recover all direct
costs associated with the production of educational, promotional and
other materials associated with a trademark program; and
(D) enter into any contracts necessary to carry out the purposes of
this subsection, which contracts shall not be subject to the bidding
requirements of K.S.A. 75-3739, and amendments thereto.
(2) The secretary of commerce
and housing shall remit all moneys
received under this subsection to the state treasurer in accordance with
the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt
of each such remittance, the state treasurer shall deposit the entire
amount in the state treasury to the credit of the trademark fund. All
expenditures from such fund shall be made for any purpose consistent
with this subsection and shall be made in accordance with appropriation
acts upon warrants of the director of accounts and reports issued pursuant
to vouchers approved by the secretary of commerce
and housing or a
person designated by the secretary.
(f) On or before February 1 of each year, the agriculture products
development division shall present an oral and written report to the house
and senate agriculture committees concerning the performance indica-
tors, performance outcomes, activities and functions of the division for
the previous year. Such report shall include a budget of how moneys
appropriated or otherwise authorized to be expended from the state gen-
eral fund or any special revenue fund for the agriculture products devel-
opment division of the department of commerce
and housing for the
previous fiscal year were spent and a projected budget of moneys appro-
priated or otherwise authorized to be expended from the state general
fund or any special revenue fund for the agriculture products develop-
ment division of the department of commerce
and housing for the current
fiscal year. Such report shall further include the full-time equivalent num-
ber of positions financed from appropriations and allocated for the agri-
culture products development division of the department of commerce

and housing
for each fiscal year. In the report to the 1997 legislature, the
division's report shall include a mission statement for the reorganized
division.
(g) Subject to appropriation acts, the secretary of commerce
and
housing shall fulfill all contracts in existence on the effective date of this
act between the Kansas technology enterprise corporation and the alter-
native agriculture research and development center.
Sec. 61. On and after July 1, 2003, K.S.A. 74-50,157 is hereby
amended to read as follows: 74-50,157. (a) The powers, duties and func-
tions of the existing agricultural value added center are hereby transferred
to and conferred and imposed upon the agricultural value added center
created by this act subject to the limitations established in K.S.A. 74-
50,156
and amendments thereto.
(b) The agricultural value added center created by this act shall be
the successor in every way to the powers, duties and functions of the
agricultural value added center, subject to the limitations established in
K.S.A. 74-50,156
, and amendments thereto, in which the same were
vested prior to the effective date of this act. Every act performed under
the authority of the agricultural value added center created by this act
shall be deemed to have the same force and effect as if performed by the
agricultural value added center in which such functions were vested prior
to the effective date of this act.
(c) Whenever the ``agricultural value added center,'' or words of like
effect, is referred to or designated by a statute, contract or other docu-
ment, such reference or designation shall be deemed to apply to the
agricultural value added center created by this act.
(d) All orders or directives of the agricultural value added center in
existence on the effective date of this act shall continue to be effective
and shall be deemed to be the orders or directives of the agricultural
value added center created by this act until revised, amended, repealed
or nullified pursuant to law.
(e) The agricultural value added center, within the department of
commerce
and housing , created by this act shall be a continuation of the
agricultural value added center being abolished pursuant to K.S.A. 74-
8122
and amendments thereto.
Sec. 62. On and after July 1, 2003, K.S.A. 74-50,158 is hereby
amended to read as follows: 74-50,158. (a) The secretary of commerce

and housing
shall be the successor in every way to the powers, duties and
functions of the division of marketing and the director of marketing in
which the same were vested prior to the effective date of this act and
which are transferred pursuant to K.S.A. 74-50,156
and amendments
thereto
. Every act performed in the exercise of such powers, duties and
functions by or under the authority of the secretary of commerce
and
housing
shall be deemed to have the same force and effect as if performed
by the division of marketing and the director of marketing in which such
powers, duties and functions were vested prior to the effective date of
this act.
(b) Whenever the ``department of agriculture,'' ``division of markets,''
or words of like effect, are referred to or designated by a statute, contract
or other document, and such reference or designation is in regard to one
of the powers and duties transferred to the agriculture products devel-
opment division within the department of commerce
and housing pur-
suant to K.S.A. 74-50,156,
and amendments thereto, such reference or
designation shall be deemed to apply to the agriculture products devel-
opment division within the department of commerce
and housing . When-
ever ``director of marketing,'' ``secretary of agriculture'' or words of like
effect, are referred to or designated by a statute, contract or other doc-
ument, and such reference is in regard to one of the powers and duties
transferred to the agriculture products development division within the
department of commerce
and housing pursuant to K.S.A. 74-50,156, and
amendments thereto,
such reference shall be deemed to apply to the
secretary of commerce
and housing.
(c) All rules and regulations, orders and directives of the division of
marketing, director of marketing or department of agriculture pertaining
to powers and duties transferred pursuant to K.S.A. 74-50,156 shall con-
tinue to be effective and shall be deemed to be the rules and regulations,
orders and directives of the department of commerce
and housing until
revised, amended, repealed or nullified pursuant to law.
Sec. 63. On and after July 1, 2003, K.S.A. 74-50,159 is hereby
amended to read as follows: 74-50,159. (a) On the effective date of this
act, officers and employees who, immediately prior to such date, were
engaged in the performance of any powers and duties of the department
of agriculture listed in K.S.A. 74-50,156
, and amendments thereto, which
are transferred to the department of commerce
and housing , and who,
in the opinion of the secretary of commerce
and housing, are necessary
to perform the powers and duties of the department of commerce
and
housing
, shall be transferred to, and shall become officers and employees
of such department.
(b) On the effective date of this act, officers and employees who,
immediately prior to such date, were engaged in the performance of any
powers and duties of the agricultural value added center which is abol-
ished by this act and who, in the opinion of the secretary of commerce

and housing
, are necessary to perform the powers and duties of the de-
partment of commerce
and housing , agriculture products development
division, shall be transferred to and become officers and employees of
such department.
Sec. 64. On and after July 1, 2003, K.S.A. 74-50,160 is hereby
amended to read as follows: 74-50,160. (a) The secretary of agriculture
and the secretary of commerce
and housing shall engage in consultations
with the purpose of reaching agreement regarding the disposition of all
property, property rights, and records which were used for or pertain to
the performance of the powers and duties transferred to the department
of commerce
and housing pursuant to this act.
(b) Any conflict as to the proper disposition of property, personnel,
records, or the unexpended balance of any appropriation arising as a result
of any abolition, transfer, attachment or change made by or under this
order shall be determined by the governor, whose decision shall be final.
Sec. 65. On and after July 1, 2003, K.S.A. 74-50,162 is hereby
amended to read as follows: 74-50,162. (a) On the effective date of this
act, the balances of all funds appropriated or reappropriated to the de-
partment of agriculture, the agricultural value added center at the Kansas
technology enterprise corporation for any of the powers and duties trans-
ferred to the department of commerce
and housing pursuant to K.S.A.
74-50,156
, and amendments thereto, are hereby transferred to the de-
partment of commerce
and housing and shall be used only for the purpose
for which the appropriation was originally made.

(b) On the effective date of this act, the liability for all accrued com-
pensation, wages or salaries of officers and employees who, immediately
prior to such date, were engaged in the performance of powers, duties
or functions of the department of agriculture, the agricultural value added
center at the Kansas technology enterprise corporation which are trans-
ferred to the department of commerce
and housing pursuant to K.S.A.
74-50,156
, and amendments thereto, shall be assumed and paid by the
department of commerce
and housing.
Sec. 66. On and after July 1, 2003, K.S.A. 74-50,163 is hereby
amended to read as follows: 74-50,163. (a) There is hereby created an
agriculture products development advisory board. Members shall be ap-
pointed by the governor as follows, one member shall be a representative
of the livestock industry, one member shall be a representative of a
farmer's cooperative active in community economic development, one
member shall be a representative of a commodity group, two members
shall be representatives of entrepreneurs in a value added business, one
member shall be a financial or investment banker or a seed capital fund
manager and one member shall be from the marketing section of the
agriculture products development division of the department of com-
merce
and housing.
(b) Of the members first appointed to the board, the governor shall
designate four whose terms shall expire June 30, 1998, and three whose
terms shall expire on June 30, 2000. After the expiration of such terms,
each member shall be appointed for a term of four years until a successor
is appointed and qualified.
(c) A vacancy on the board of a member shall be filled for the unex-
pired term by appointment by the governor.
(d) The governor shall appoint a chairperson.
(e) The board shall meet as the chairperson or a majority of the board
members determine.
(f) The board shall advise the secretary of commerce
and housing and
the agriculture products development division on issues and concerns of
agriculture product development and technical assistance for such
development.
Sec. 67. On and after July 1, 2003, K.S.A. 74-7295 is hereby
amended to read as follows: 74-7295. The department of commerce
and
housing
, created by K.S.A. 74-5002f, and amendments thereto, shall be
audited under the Kansas governmental operations accountability law,
and shall be reviewed and evaluated during the 2001 regular session of
the legislature, or such other regular session of the legislature designated
by the legislative post audit committee in accordance with the provisions
of subsection (c) of K.S.A. 74-7285, and amendments thereto.
Sec. 68. On and after July 1, 2003, K.S.A. 74-8001 is hereby
amended to read as follows: 74-8001. (a) There is hereby created a body
politic and corporate to be known as Kansas, Inc. Kansas, Inc. is hereby
constituted a public instrumentality and the exercise of the authority and
powers conferred by this act shall be deemed and held to be the per-
formance of an essential governmental function. Kansas, Inc. shall consist
of 17 predominately private sector members as follows:
(1) The governor of Kansas;
(2) the secretary of the Kansas department of commerce
and housing;
(3) nine members who are appointed by the governor, subject to con-
firmation by the senate as provided in K.S.A. 75-4315b, and amendments
thereto. Except as provided by K.S.A. 46-2601, and amendments thereto,
no person appointed pursuant to this paragraph shall exercise any power,
duty or function as a member of Kansas, Inc. until confirmed by the
senate. Such members shall be appointed as follows:
(A) One member from each of the primary economic sectors in the
state--agriculture, oil and gas, and aviation--who are recognized for out-
standing knowledge and leadership in their fields;
(B) one member from one other primary, job creating, value added
business sector who is recognized for outstanding knowledge and lead-
ership in the member's field;
(C) two members from the private financial sector, one of whom shall
have experience in the area of high-risk venture investments, and one of
whom shall have commercial banking experience in an industry of special
importance to the Kansas economy, and both of whom are recognized
for outstanding knowledge and leadership in their fields;
(D) one member representing labor who is recognized for outstand-
ing knowledge and leadership in the member's field;
(E) one member from the professional and business services sector
who is recognized for outstanding knowledge and leadership in the mem-
ber's field;
(F) one member who owns a small business and who is recognized
for outstanding knowledge and leadership in that community of interest;
(4) one member who serves as the commanding general of the Kansas
cavalry;
(5) one member who is appointed by the state board of regents from
a Kansas university and who is recognized for outstanding knowledge and
leadership in the field of economic development;
(6) the speaker of the house, the house minority leader, the president
of the senate, and the senate minority leader or legislators who are ap-
pointed to represent them and who will provide continuity by virtue of
their membership on the standing committee on commerce of the senate,
the standing committee on economic development of the house of rep-
resentatives or the joint committee on economic development.
(b) (1) State officers who are designated as members of Kansas, Inc.
under subsection (a)(1), (2), (4) and (6) shall serve by virtue of office or
position.
(2) Members appointed under subsection (a)(6) shall be appointed
for a term ending on the first day of the regular legislative session in odd-
numbered years.
(3) Except as provided by paragraph (5) of this subsection, the mem-
ber appointed under subsection (a)(5) shall serve for a term of four ye ars.
(4) Members appointed under subsection (a)(3) shall serve for a term
of four years, except that, of the members first appointed, two shall serve
for a term of two years, three shall serve for a term of three years, and
two shall serve for a term of four years.
(5) The terms of members appointed under paragraphs (3) and (5)
of subsection (a) and who are serving on Kansas, Inc. on the effective
date of this act shall expire on January 15, of the year in which such
member's term would have expired under the provisions of this section
prior to amendment by this act. Thereafter, members shall be appointed
for terms of four years and until their successors are appointed and
confirmed.
(6) In case of a vacancy in the appointive membership of Kansas, Inc.,
a successor shall be appointed in like manner and subject to the same
qualifications and conditions as the original appointment of the member
creating the vacancy.
Sec. 69. On and after July 1, 2003, K.S.A. 74-8002 is hereby
amended to read as follows: 74-8002. (a) The purpose of Kansas, Inc.
shall be to:
(1) Undertake ongoing strategic analysis in order to determine the
state's areas of potential and continuing competitive economic advantage
and disadvantage;
(2) oversee the formulation of economic development policy and stra-

tegic planning for the state;
(3) oversee the targeting of scarce state resources by size and sector
of economic activity and by geographic location within the state in order
to enhance the state's potential comparative economic advantages;
(4) undertake continuing strategic planning for the improvements of
the state's tax, regulatory and expenditure policies to enhance the state's
potential comparative economic advantages;
(5) oversee crisis management and opportunity management of short
term potential gains or losses in economic activity through impact analysis;
(6) serve in an advisory capacity to the Kansas department of com-
merce
and housing;
(7) provide appropriate oversight to ensure the successful implemen-
tation of Kansas Venture Capital, Inc.
;
(8) forge a supportive partnership with the standing committee on
commerce of the senate, the standing committee on economic develop-
ment of the house of representatives and the joint committee on eco-
nomic development, the governor and the secretary of commerce
and
housing
, the Kansas technology enterprise corporation, Kansas Venture
Capital, Inc., Kansas certified development companies, Kansas small busi-
ness development centers, Kansas public and private educational insti-
tutions, and other appropriate private and public sector organizations in
achieving the economic goals of the state;
(9) establish goals, priorities and program standards, and evaluate the
effectiveness of state economic development programs and policies ac-
cording to the goals, priorities and standards established;
(10) institutionalize ongoing means of collaboration between the ex-
ec utive and legislative branches, the business, agricultural and financial
sectors, educational institutions and local communities to create a devel-
oping Kansas economy the increasing innovation, creativity, diversity and
productivity of which is greater than any one sector can achieve acting
alone; and
(11) review and evaluate the Kansas technology enterprise corpora-
tion, the major programs and activities of the department of commerce

and housing
, the statewide risk capital system, the venture capital tax
credit, and the investments in research and development activities tax
credit.
Sec. 70. On and after July 1, 2003, K.S.A. 74-8004 is hereby
amended to read as follows: 74-8004. (a) In order to achieve its purpose
as provided in this act, Kansas, Inc. shall:
(1) Serve in an advisory capacity to the governor, the Kansas depart-
ment of commerce
and housing and the standing committee on com-
merce of the senate, the standing committee on new economy of the
house of representatives and the joint committee on economic
development.
(2) Assume central responsibility to develop, with the guidance of
both the private and public sectors, all facets of a comprehensive long
term economic development strategy.
(3) Coordinate the strategy development with all other state and local
agencies and offices and state educational institutions which do research
work, develop materials and programs, gather statistics, or which perform
functions related to economic development; and such state and local
agencies and offices and state educational institutions shall advise and
cooperate with Kansas, Inc. in the planning and accomplishment of the
strategy.
(4) Evaluate and analyze the state's economy to guide the direction
of future public and private actions, and report and make recommenda-
tions to the governor, the department of commerce
and housing , and the
standing committee on commerce of the senate, the standing committee
on new economy of the house of representatives and the joint committee
on economic development with respect to the state's economy. The report
to the committee on commerce of the senate, the committee on new
economy of the house of representatives and the joint committee on ec-
onomic development under this subsection shall be made by Kansas, Inc.,
either (A) by publishing such report on the internet and by notifying each
member of the committees that the report is available and providing, as
part of such notice, the uniform resource locator (URL) at which such
report is available, or (B) by submitting copies of such report on CD-
ROM or other electronically readable media to such committees.
(5) Oversee and evaluate the state's economic development activities
on an ongoing basis through the establishment of goals, priorities per-
formance standards and the periodic program audit of those goals, pri-
orities and performance standards.
(6) Oversee the implementation of the state's economic development
plan and monitor updates of that plan.
(7) Provide appropriate oversight to ensure the successful implemen-
tation of Kansas Venture Capital, Inc.
(8) Oversee the targeting of scarce state resources by size and sector
of economic activity and by geographic location within the state in order
to enhance the state's potential comparative economic advantages.
(9) Review and evaluate the annual reports of the department of com-
merce
and housing , Kansas technology enterprise corporation and Kansas
Venture Capital, Inc. Kansas, Inc., shall transmit recommendations con-
cerning the agencies' activities to the governor and the legislature no later
than September 1 of each year.
(b) Kansas, Inc., shall seek advice from the general public and from
professional associations, academic groups and institutions and individuals
with knowledge of and interest in areas of economic development and
planning.
(c) The department of commerce
and housing and all other inter-
ested state agencies shall cooperate with Kansas, Inc., in providing infor-
mation and other assistance as may be requested for the performance of
its duties with respect to the state's economic development plan.
Sec. 71. On and after July 1, 2003, K.S.A. 74-8005 is hereby
amended to read as follows: 74-8005. (a) Kansas, Inc., subject to the
approval of the governor, shall hire a person to serve as chief executive
officer and president of Kansas, Inc. Kansas, Inc. shall conduct a national
search and select a corporation president who meets a national standard
of experience, ability and initiative for similar positions. The president
shall be in the unclassified service under the Kansas civil service act and
shall serve at the pleasure of Kansas, Inc. Kansas, Inc. may negotiate and
enter into an employment agreement with the individual selected as cor-
poration president which may provide for such compensation and such
provisions for allowances, benefits and expenses as may be included in
such agreement. Kansas, Inc. is authorized to make all payments and
payroll deductions as may be required under such agreement.
(b) The president shall direct and supervise the general management
of the corporation and a small core staff of analysts. The president:
(1) May employ and terminate such other employees as designated
by the members of Kansas, Inc. Such employees shall be in the unclas-
sified service under the Kansas civil service act;
(2) shall attend board meetings; and
(3) shall keep a record of all proceedings and maintain and be cus-
todian of all financial and operational records, documents and papers filed
with Kansas, Inc.
(c) Kansas, Inc. is hereby authorized to negotiate and enter into con-

tracts for professional consulting and research services, and may enter
into such contracts jointly with the department of commerce
and housing.
(d) Kansas, Inc. is authorized to accept gifts, donations and grants.
(e) Kansas, Inc. is not subject to state purchasing laws.
Sec. 72. On and after July 1, 2003, K.S.A. 74-8006 is hereby
amended to read as follows: 74-8006. Kansas, Inc. shall publish an annual
report for the governor, legislature, citizens and media of Kansas. The
report shall include:
(a) An analysis of the current state of and emerging trends in the
Kansas economy over the next decade.
(b) An evaluation of the effectiveness of state economic development
policies and programs in meeting the goals of the state economic plan by
size of enterprise, sector of economic activity and location within Kansas,
and in comparison with other states.
(c) A listing in order of priority of recommendations for initiatives
that will further the effective implementation of the state economic de-
velopment plan.
(d) A synopsis of the activities of Kansas, Inc. during the previous
fiscal year.
(e) The report shall be transmitted annually to the governor and the
legislature on October 1 in coordination with the Kansas technology en-
terprise corporation and the department of commerce
and housing .
Sec. 73. On and after July 1, 2003, K.S.A. 74-8007 is hereby
amended to read as follows: 74-8007. The secretary of commerce
and
housing
shall provide to Kansas, Inc. such staff and other assistance as
may be requested thereby.
Sec. 74. On and after July 1, 2003, K.S.A. 74-8010 is hereby
amended to read as follows: 74-8010. (a) Kansas, Inc. shall review and
evaluate the effectiveness of economic development programs and activ-
ities within the state, including, but not by way of limitation, the Kansas
technology enterprise corporation programs and activities, the major pro-
grams and activities of the department of commerce
and housing , the
statewide risk capital system, the venture capital tax credit, and the re-
search and development activities tax credit. The effectiveness of the re-
search and development activities tax credit shall be measured by the
extent to which the tax credit encourages innovation and development of
new value-added products and processes which will lead to the commer-
cialization of new products and processes by primary job creating Kansas
businesses.
(b) Kansas, Inc. shall periodically conduct a review and evaluation of
economic development programs and activities. The review and evalua-
tion should include:
(1) A performance analysis of the extent to which the purposes of the
acts providing for the programs and activities have been achieved; and
(2) the economic and fiscal impact of the programs and activities on
the state's economy and jobs created.
(c) Based on the findings of its review and evaluation, Kansas, Inc.
will recommend to the legislature the continuation in effect, modification,
or repeal of the acts providing for the programs and activities.
Sec. 75. On and after July 1, 2003, K.S.A. 74-8101 is hereby
amended to read as follows: 74-8101. (a) There is hereby created a body
politic and corporate to be known as the Kansas technology enterprise
corporation. The Kansas technology enterprise corporation is hereby con-
stituted a public instrumentality and the exercise of the authority and
powers conferred by this act shall be deemed and held to be the per-
formance of an essential governmental function.
(b) The corporation shall be governed by a board of 20 directors who
shall be residents of this state. The board shall consist of (1) the governor
or, at the discretion of the governor, the secretary of the department of
commerce
and housing , (2) the secretary of the state board of agriculture,
(3) four directors who are members of the legislature appointed as pro-
vided in subsection (d)(1), (4) four directors who are appointed by leg-
islative officers as provided in subsection (d)(2), and (5) ten directors
appointed by the governor subject to senate confirmation as provided in
K.S.A. 75-4315b, and amendments thereto. Except as provided by K.S.A.
2002 Supp. 46-2601, and amendments thereto, no person whose appoint-
ment is subject to confirmation by the senate, shall exercise any power,
duty or function as a member of the board until confirmed by the senate.
(c) (1) All 10 of the directors appointed by the governor shall be
persons recognized for outstanding knowledge and leadership in their
fields. Six of the directors shall be persons from the private sector and
four shall be persons from the public sector. The four appointees from
the public sector shall consist of one or more of the following: Senior
administrators at Kansas educational institutions governed by the board
of regents or engineers or scientists who have extensive experience in
managing basic or applied scientific and technological research. Of the
six directors appointed from the private sector:
(A) Four directors shall be persons who represent industries of the
Kansas economy including small enterprises which include, but are not
limited to:
(i) Resource-based industries of agriculture, oil and gas;
(ii) advanced technology industries of aviation, manufacturing, infor-
mation and design; and
(iii) emerging industries of telecommunications, computer software,
information services and research services; and
(B) two directors shall be persons who represent the private financial
sector of whom one shall have experience in the area of high-risk venture
investments, and the other shall have commercial banking experience in
an industry of special technological importance to the Kansas economy.
(2) In making appointments to the board, the governor shall give
consideration to the qualifications of the persons who served as commis-
sioners of the Kansas advanced technology commission and shall give
consideration to appropriate geographical representation.
(3) Of the members first appointed to the board, two directors shall
be appointed for a term of one year, two directors shall be appointed for
terms of two years, three directors shall be appointed for terms of three
years and three directors shall be appointed for terms of four years. Ex-
cept as provided by paragraph (4), successors to such directors shall be
appointed for terms of four years. Each director shall hold office for the
term of appointment and until the successor has been appointed and
confirmed. In the event of a vacancy, the vacancy shall be filled by the
governor in the manner provided for original appointments for the re-
mainder of the unexpired portion of the term.
(4) The terms of directors appointed pursuant to this subsection who
are serving on the board on the effective date of this act shall expire on
January 15, of the year in which such member's term would have expired
under the provisions of this section prior to amendment by this act.
Thereafter, directors shall be appointed for terms of four years and until
their successors are appointed and confirmed.
(d) (1) Four directors shall be members of the legislature as follows:
The speaker of the house, the house minority leader, the president of the
senate, and the senate minority leader, or legislators who are appointed
to represent them and who will provide continuity by virtue of their mem-
bership on the standing committee on commerce of the senate, the stand-
ing committee on economic development of the house of representatives

or the joint committee on economic development. Legislative officers
designated in this subsection shall serve by virtue of office. Legislators
appointed under this subsection shall serve from the dates of their ap-
pointment until the first day of the regular legislative session in odd-
numbered years and are eligible for reappointment.
(2) (A) Four directors shall be appointed by legislative officers as
follows: (1) One shall be appointed by the speaker of the house, (2) one
shall be appointed by the house minority leader, (3) one shall be ap-
pointed by the president of the senate, and (4) one shall be appointed by
the senate minority leader. The members so appointed shall be persons
who are recognized for outstanding knowledge and leadership in their
fields, who are from the private sector and who represent industries of
the Kansas economy including small enterprises which include, but are
not limited to:
(i) Resource-based industries of agriculture, oil and gas;
(ii) advanced technology industries of aviation, manufacturing, infor-
mation and design; and
(iii) emerging industries of telecommunications, computer software,
information services and research services.
(B) Of the directors first appointed by legislative officers under this
subsection (d)(2), the directors appointed by the speaker of the house
and the president of the senate shall be appointed to a term of four years
and the directors appointed by the house minority leader and the senate
minority leader shall be appointed to a term of two years. Successors to
such directors shall be appointed for terms of four years. Each director
shall hold office for the term of appointment and until the successor has
been appointed. In the event of a vacancy, the vacancy shall be filled by
the legislative officer who appointed the director who created the vacancy
in the manner provided for the original appointment for the remainder
of the unexpired portion of the term.
(e) Members of the board of directors, in their dealings with enter-
prises that may receive financing through the corporation, shall declare
any potential conflict of interest and abstain from voting prior to taking
any actions relating to that transaction.
(f) The board of directors shall conduct a national search and select
a corporate president who meets a national standard of experience, ability
and initiative for similar positions. The corporate president shall not be
a member of the board.
(g) The board of directors shall hold all board meetings within the
state of Kansas.
(h) Members of the board of directors are entitled to compensation
and expenses as provided in K.S.A. 75-3223, and amendments thereto.
(i) The board shall annually elect from the private sector membership
one member as chairperson and one member as vice-chairperson.
(j) The board of directors shall meet at least once during each cal-
endar quarter, and at such other times as may be provided in the rules
of the corporation, upon call by the president, the chairperson or upon
written request of a majority of the directors.
(k) A majority of the board of directors shall be necessary to transact
corporation business, and all actions of the directors shall be by a majority
vote of the full number of corporate directors.
(l) The directors shall establish an executive committee composed of
the chairperson, vice-chairperson and three additional members chosen
by the chairperson from among the remaining directors. The executive
committee, in intervals between board meetings, may transact any board
business that has been delegated to the executive committee. A majority
of the executive committee shall be necessary to transact business and all
actions of the executive committee shall be by a majority vote of the
committee.
(m) No member of the board of directors is eligible to serve more
than two terms of office.
(n) A member appointed to the board of directors by the governor
may be removed by the governor for cause, stated in writing, after a
hearing thereon.
Sec. 76. On and after July 1, 2003, K.S.A. 74-8221 is hereby
amended to read as follows: 74-8221. This act shall be known and may
be cited as the Kansas certified capital formation company act. The pur-
pose of this act is to enhance the development of seed and venture capital
in Kansas and to support the modernization and expansion of the state's
economy. As used in this act, unless the context clearly requires otherwise,
the following terms mean:
(a) ``Affiliate of a certified capital formation company'' means:
(1) Any person that directly or indirectly, owns, controls or possesses
the power or ability to vote ten p ercent or more of the outstanding voting
securities or other beneficial ownership interests of the Kansas certified
capital formation company;
(2) any person ten percent or more of whose outstanding voting se-
curities or other beneficial ownership interests are directly or indirectly
owned, controlled or possessed with the power to be voted by the Kansas
certified capital formation company;
(3) any person directly or indirectly controlling, controlled by, or un-
der common control with the Kansas certified capital formation company;
(4) any partnership in which the Kansas certified capital formation
company is a general partner;
(5) any person who is an officer, director, general partner, managing
member, managing director or agent of the Kansas certified capital for-
mation company or an immediate family member of such person.
(b) ``Affiliate of an investor'' means:
(1) Any person that directly or indirectly, owns, controls or possesses
the power or ability to vote ten percent or more of the outstanding voting
securities or other beneficial ownership interests of the investor;
(2) any person ten percent or more of whose outstanding voting se-
curities or other beneficial ownership interests are directly or indirectly
owned, controlled or possessed with the power to be voted by the
investor;
(3) any person directly or indirectly controlling, controlled by or un-
der common control with the investor;
(4) a partnership in which the investor is a general partner;
(5) any person who is an officer, director or agent of the investor or
an immediate family member of such officer, director or agent.
(c) ``Applicable percentage'' means 50%.
(d) ``Authorized capital formation company and authorized CFC''
means a capital formation company that has been designated by the sec-
retary as having met the requirements of this act necessary to raise capital
investments but that has not yet received the designation as a certified
capital formation company.
(e) ``CFC'' means any capital formation company.
(f) ``Capital in a qualified Kansas business'' means any at risk invest-
ment in any note, stock, partnership or membership interest or other form
of equity investment or hybrid security, of any nature and description
whatsoever, including a debt instrument or security which has the char-
acteristics of indebtedness but which provides for conversion into equity
or equity participation instruments such as options or warrants which are
acquired by a CFC as a result of a transfer of cash to a business, except
for debt instruments, the proceeds of which were used to acquire or
which will be used to develop intellectual property, in which case such
debt instrument may be secured by a lien on the intellectual property.
Capital in a qualified Kansas business shall not include secured debt
instruments.

(g) ``Certified capital'' means cash, marketable securities, legally en-
forceable commitments of capital subject to call by a capital formation
company and other assets held by a certified capital formation company
equal to the amount of certified capital investment made by investors in
the certified capital formation company.
(h) ``Certified capital formation company'' means any partnership,
corporation, trust or limited liability company, whether organized on a
profit or not for profit basis, that is domiciled in and qualified to conduct
business in Kansas and that has as its primary business activity, the in-
vestment of cash in qualified Kansas businesses, and which is certified by
the secretary as satisfying the criteria of this act.
(i) ``Certified capital investment'' means an investment of cash by an
investor which is certified by the secretary made in such manner as to
acquire a beneficial ownership interest in a Kansas certified capital for-
mation company.
(j) ``Commissioner'' means the securities commissioner of Kansas or
persons acting under the supervision of the commissioner.
(k) ``In existence'' means the date of the first sale of goods or services
by a qualified Kansas business or a business seeking to be so qualified.
(l) ``Investor'' means any person that invests cash. If the investor is a
natural person, the investor shall have a net worth of at least $1,000,000
and such net worth shall be not less than 10 times the amount of the
investor's certified investment in a CFC. The investor's net worth shall
not include the value of any equity in the investor's primary residence.
(m) ``Liquidating distribution'' means any distribution other than a
qualified distribution.
(n) ``Maximum cumulative investment'' means certified capital in-
vestment of $10,000,000 or such lesser amount as the secretary of com-
merce
and housing may prescribe in accordance with subsection (d) of
K.S.A. 74-8224, and amendments thereto.
(o) ``Person'' means any natural person or any business association,
including but not limited to, a corporation, limited liability company, gen-
eral or limited partnership or trust.
(p) ``Qualified distribution'' means any distribution or payment made
by a certified capital formation company for costs and expenses of form-
ing, syndicating, managing or operating the certified capital formation
company, including an annual management fee and reasonable and nec-
essary fees in accordance with industry custom for professional fees in-
cluding, but not limited to, legal and accounting fees, relating to operating
the certified capital formation company.
(q) ``Qualified Kansas business'' means:
(1) A business that satisfies the requirements of subparagraphs (A)
through (F) of this subsection.
(A) Such business is independently owned and operated and has its
principal business office located in Kansas or, in the case of a company
domiciled outside the state of Kansas, which certifies that the company's
principal business office will be located in Kansas within six months fol-
lowing the date of the initial investment.
(B) At least fifty percent of the employees of the business shall be
resident in Kansas or, in the case of a company domiciled outside the
state of Kansas, certifies that at least fifty percent of its employees will
be resident in Kansas within six months following the date of the initial
qualified venture capital investment.
(C) Such business is in need of venture capital and cannot obtain
conventional financing to fund its further development and future oper-
ations.
(D) Such business shall be engaged in commerce for the purpose of
manufacturing, processing or assembling or distributing products, con-
ducting research and development or providing services in interstate com-
merce.
(E) For businesses involved in commerce for the purpose of provid-
ing services in interstate commerce, that business must demonstrate that
more than fifty percent of its gross revenues are derived from sales out-
side the state of Kansas or provide reasonable documentation that the
company will derive at least fifty percent of its gross sales outside the
state within a three-year period.
(F) Such business, at the time of the initial qualified venture capital
investment, shall have been in existence less than five years and shall not
have had gross sales in excess of $1,000,000 in any single fiscal year.
(2) Any business which, subject to paragraph (a)(5) of K.S.A. 74-8225,
and amendments thereto, is approved as a qualified Kansas business at
the time of the first qualified venture capital investment in such business
by a Kansas certified capital formation company, for a period of five years
following the date of such first investment, shall continue to be classified
as a qualified Kansas business and may receive follow-on investments
from any Kansas certified capital formation company, and such follow-on
investments shall constitute qualified venture capital investments even
though such business may not meet other qualifications set forth in par-
agraph (p)(1)(F) at the time of such follow-on investments.
(3) A qualified Kansas business shall not include:
(A) Any commercial enterprise primarily engaged in the sale at retail
of goods or services taxable under the Kansas retailer's sales tax act; any
service provider set forth in K.S.A. 17-2707, and amendments thereto;
any bank, savings and loan or lending institution; any real estate, real
estate development or insurance company; or any commercial enterprise
deriving its revenues directly from noncommercial customers in exchange
for personal services;
(B) an entity engaged primarily as a passive business, in irregular or
noncontinuous operations, any financial instrument that derives substan-
tially all of its income from passive investments that generate interest,
dividends, royalties or capital gains or any business arrangement the effect
of which is to immunize an investor from risk of loss;
(C) a business engaged in oil and gas exploration and development;
(D) a subsidiary of a certified capital formation company;
(E) another certified capital formation company;
(F) an affiliate of the certified capital formation company;
(G) an investor of the certified capital formation company or an af-
filiate or subsidiary of an investor of the certified capital formation com-
pany unless approved in writing by the secretary.
(r) ``Qualified venture capital investment'' means the investment of
cash by a Kansas certified capital formation company in such a manner
as to acquire capital in a qualified Kansas business.
(s) ``Secretary'' means the secretary of commerce
and housing or per-
sons under the secretary's direction.
(t) ``Tax credit'' means a credit against the tax imposed by the Kansas
income tax act, the premium tax or privilege fee imposed pursuant to
K.S.A. 40-252, and amendments thereto, or the privilege tax as measured
by net income of financial institutions imposed pursuant to chapter 79,
article 11 of the Kansas Statutes Annotated.
Sec. 77. On and after July 1, 2003, K.S.A. 74-8405 is hereby
amended to read as follows: 74-8405. (a) Pursuant to K.S.A. 74-5049, and
amendments thereto, the secretary of commerce
and housing shall report
the following:
(1) The number of local seed capital pools;
(2) the total tax credit generated;
(3) the total investments made in Kansas venture capital companies;
(4) the total investments in Kansas businesses by local seed capital

pools;
(5) an estimate of jobs created or preserved under the program; and
(6) an estimate of the multiplier effect on the Kansas economy of the
program.
(b) Additionally, in the report the secretary shall evaluate the success
of the program in collaboration with Kansas, Inc. and the standing com-
mittee on commerce of the senate, the standing committee on economic
development of the house of representatives and the joint committee on
economic development, and may include specific recommendations for
legislation.
Sec. 78. On and after July 1, 2003, K.S.A. 74-8831 is hereby
amended to read as follows: 74-8831. (a) There is hereby created in the
state treasury the Kansas greyhound breeding development fund to which
moneys shall be credited as provided by this act. Expenditures from such
fund shall be made in accordance with appropriation acts upon warrants
of the director of accounts and reports issued pursuant to vouchers ap-
proved by the chairperson of the commission or a person designated by
the chairperson.
(b) Moneys credited to the fund shall be expended as follows:
(1) An amount equal to 15% of all moneys credited to the fund during
a fiscal year shall be transferred by the director of accounts and reports
on June 30 of each year to the greyhound tourism fund created by sub-
section (c);
(2) an amount equal to 35% of all moneys credited to the fund during
a fiscal year shall be used for research conducted within the state of
Kansas relating to the prevention of injury to and disease of greyhounds;
(3) subject to the provisions of subsection (e), an amount equal to
50% of all moneys credited to the fund during a fiscal year, less the
amount determined by the commission pursuant to subsection (b)(4),
shall be used by the racetrack facilities where derived to supplement stake
races for Kansas-whelped greyhounds as approved by the commission;
(4) an amount determined by the commission, but not to exceed
$30,000 of the moneys credited to the fund during a fiscal year, shall be
used to pay a portion of the administrative costs of the official registering
agency designated by the commission pursuant to K.S.A. 74-8832 and
amendments thereto; and
(5) as provided by subsection (e).
(c) Moneys credited to the Kansas greyhound breeding development
fund shall be used only for the benefit of greyhounds.
(d) There is hereby created in the state treasury the greyhound tour-
ism fund. Moneys in such fund shall be used only for the promotion of
greyhound-related tourism. Expenditures from such fund shall be made
in accordance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the sec-
retary of commerce
and housing or a person designated by the secretary.
(e) If live greyhound racing ceases at a racetrack facility for a period
of 60 continuous days or the commission finds that live greyhound racing
is likely to cease at a racetrack facility for a period of 60 continuous days,
any undisbursed moneys that would otherwise be expended pursuant to
subsection (b)(3) shall be expended in accordance with the following:
(1) The commission shall compile a roster of Kansas-whelped grey-
hounds in each licensed kennel on the day of racing at the racetrack
facility prior to the day of cessation of racing (the ``census date''), except
that any Kansas-whelped greyhound that has not been in residence in the
kennel and on the kennel's active list for five of the 14 days immediately
preceding the census date shall not be included in the roster.
(2) The undisbursed moneys shall be divided equally among the qual-
ified Kansas-whelped greyhounds identified pursuant to the census de-
scribed in subsection (e)(1).
(3) The funds awarded to each qualified Kansas-whelped greyhound
shall be divided equally between the licensed owner of the Kansas-
whelped greyhound and the licensed kennel owner in whose kennel the
Kansas-whelped greyhound was resident. If such a greyhound or kennel
has multiple owners, the owner's share and kennel owner's share shall be
prorated in accordance with the ownership percentages of each part
owner of such greyhound or kennel, as appears in the commission's mul-
tiple ownership or kennel registration records.
(4) Payments to Kansas-whelped greyhound owners and kennel own-
ers pursuant to this subsection shall be made directly from the Kansas
greyhound breeding development fund to such greyhound owners and
kennel owners.
Sec. 79. On and after July 1, 2003, K.S.A. 74-8904 is hereby
amended to read as follows: 74-8904. Except as otherwise limited by this
act, the authority shall have the following powers to:
(a) Sue and be sued;
(b) have a seal and alter such seal;
(c) make and alter bylaws for its organization and internal
management;
(d) adopt such rules and regulations as may be necessary to carry out
the purposes of this act;
(e) acquire, hold and dispose of real and personal property for its
corporate purposes;
(f) appoint officers, agents and employees, prescribe their duties and
qualifications and fix their compensation;
(g) borrow money and to issue notes, bonds and other obligations
pursuant to K.S.A. 74-8905, and amendments thereto, whether or not the
interest on which is subject to federal income taxation, and to provide for
the rights of the lenders or holders thereof;
(h) purchase notes or participations in notes evidencing loans which
are secured by mortgages or security interests and to enter into contracts
in that regard;
(i) make secured or unsecured loans for any of the purposes for which
bonds of the authority may be issued under this act or to low and mod-
erate income multifamily rental housing projects participating in pro-
grams established in section 42 of the federal internal revenue code, and
provide financing for housing projects and programs in participation with
programs established by the United States department of housing and
urban development or the
Kansas department of commerce and housing
division of housing in the Kansas development finance authority
; except
as otherwise provided in this subsection, nothing in this act shall be con-
strued to authorize the authority to make loans directly to individuals to
finance housing developments;
(j) sell mortgages and security interests at public or private sale, to
negotiate modifications or alterations in mortgage and security interests,
to foreclose on any mortgage or security interest in default or commence
any action to protect or enforce any right conferred upon it by any law,
mortgage, security agreement, contract or other agreement, and to bid
for and purchase property which was the subject of such mortgage or
security interest at any foreclosure or at any other sale, to acquire or take
possession of any such property, and to exercise any and all rights as
provided by law for the benefit or protection of the authority or mortgage
holders;
(k) collect fees and charges in connection with its loans, bond guar-
antees, commitments and servicing, including, but not limited to, reim-
bursement of costs of financing as the authority shall determine to be
reasonable and as shall be approved by the authority;
(l) make and execute contracts for the servicing of mortgages ac-
quired by the authority pursuant to this act, and to pay the reasonable
value of services rendered to the authority pursuant to those contracts;

(m) enter into agreements with and accept gifts, grants, loans and
other aid from the federal government, the state, any state agency, any
political subdivision of the state, or any person or corporation, foundation
or legal entity, and to agree to and comply with any conditions attached
to federal and state financial assistance not inconsistent with the provi-
sions of this act;
(n) invest moneys of the authority not required for immediate use,
including proceeds from the sale of any bonds, in such manner as the
board shall determine, subject to any agreement with bondholders stated
in the authorizing resolution providing for the issuance of bonds;
(o) procure insurance against any loss in connection with its pro-
grams, property and other assets;
(p) provide technical assistance and advice to the state or political
subdivisions of the state and to enter into contracts with the state or
political subdivisions of the state to provide such services. The state or
political subdivisions of the state are hereby authorized to enter into con-
tracts with the authority for such services and to pay for such services as
may be provided them;
(q) establish accounts in one or more depositories;
(r) lease, acquire, construct, sell and otherwise deal in and contract
concerning any facilities;
(s) have and exercise all of the powers granted to the public housing
authorities by the state, except that the authority shall not have the power
of eminent domain;
(t) do any and all things necessary or convenient to carry out purposes
of the authority and exercise the powers given and granted in this act;
(u) assist minority businesses in obtaining loans or other means of
financial assistance. The terms and conditions of such loans or financial
assistance, including the charges for interest and other services, will be
consistent with the provisions of this act. In order to comply with this
requirement, efforts must be made to solicit for review and analysis pro-
posed minority business ventures. Basic loan underwriting standards will
not be waived to inconsistently favor minority persons or businesses from
the intent of the authority's lending practices; and
(v) form one or more subsidiary corporations under K.S.A. 17-6001

et seq.
, and amendments thereto, in accordance with the procedures
therein contained. Each subsidiary corporation shall be subject to the
same restrictions and limitations as to the powers and purposes to which
the authority is subject. The authority may delegate any of its powers,
obligations and duties to any subsidiary corporation by inclusion of such
powers, obligations and duties in the articles of incorporation of the sub-
sidiary corporation. Subsidiary corporations so formed shall constitute
legal entities separate and distinct from each other, the authority and the
state. The authority shall not be liable for the debts or obligations or for
any actions or inactions of its subsidiary corporations unless the authority
expressly agrees otherwise in writing. The authority may make loans or
grants to a subsidiary corporation from time to time to enable the sub-
sidiary corporation to carry out its purposes. The members of the au-
thority shall constitute all of the directors of each subsidiary corporation.
The state, any municipality or any state commission, public authority,
agency, officer, department, board or division authorized and empowered
to enter into agreements with, to grant, convey, lease or otherwise transfer
any property to, or to otherwise transact business with the authority, shall
have the same authorization and power to engage in these activities with
each subsidiary corporation of the authority.
One or more such subsidiary corporation may be formed for purposes
of establishing state tax credit equity funds to assist in the development
of low-income and middle-income housing and obtain financing through
participation in the program established in section 42 of the federal in-
ternal revenue code.
Actions of the authority or any subsidiary corporation relating to hous-
ing pursuant to this subsection (v) shall be carried out in accordance with
any terms, conditions and limitations relating to policy issues regarding
housing, as established by the
secretary of commerce and housing director
of housing in the Kansas development finance authority
.
One or more such subsidiary corporations may be formed for purposes
of acquiring or conveying on behalf of the state and pursuant to this act
a project of statewide as well as local importance, issuing bonds on behalf
of the state pursuant to this act to finance a project of statewide as well
as local importance or otherwise financing on behalf of the state pursuant
to this act a project of statewide as well as local importance. The Kansas
statewide projects development corporation is hereby created in accord-
ance with this section.
Sec. 80. On and after July 1, 2003, K.S.A. 74-8928 is hereby
amended to read as follows: 74-8928. The secretary of commerce
and
housing
, the state treasurer, the board of county commissioners, the di-
rector of taxation, any bond trustee or fiscal agent are authorized to enter
into agreements in connection with the implementation of any redevel-
opment project with a redevelopment district established pursuant to
K.S.A. 74-8921, and amendments thereto.
Sec. 81. On and after July 1, 2003, K.S.A. 74-8930 is hereby
amended to read as follows: 74-8930. Within 120 days of the effective
date of this act, developer of a project of state-wide as well as local im-
portance shall reimburse the unified government of Wyandotte county
for cash investment in the project as documented to and determined by
the secretary of commerce
and housing.
Sec. 82. On and after July 1, 2003, K.S.A. 74-8942 is hereby
amended to read as follows: 74-8942. As used in K.S.A. 2002 Supp. 74-
8942 through 74-8945:
(a) ``Establishment'' means a business that:
(1) Has at least $100,000,000 in existing annual gross compensation
paid to jobs located in Kansas, according to reports filed with the secretary
of human resources, for the previous three years;
(2) has an average annual gross compensation of at least $40,000 paid
per existing employee;
(3) currently has at least $200,000,000 total investment in Kansas;
(4) intends to add investment, in the state as defined in subsection
(d), for modernization and retooling of at least $50,000,000 within five
years from the effective date of this act or within five years of contracting
with the department of commerce
and housing; and
(5) is described by north American industrial classification code num-
ber 326211, tire manufacturing.
(b) ``Gross compensation'' means wages and benefits paid to or on
behalf of employees receiving wages.
(c) ``Secretary'' means the secretary of commerce
and housing .
(d) ``Invest'' or ``investment'' for the purpose of determining the eli-
gibility of an establishment for the incentive payments created pursuant
to this act, means an amount greater than the average amount invested
by the establishment over the five years prior to the effective date of this
act or for investments made after July 1, 2003, over the five years prior
to entering into a contract with the secretary. If an establishment has
been engaged in commercial operations for less than five years, the
amount invested shall be greater than the annual average amount invested

by the establishment for the entire period of commercial operation.
Sec. 83. On and after July 1, 2003, K.S.A. 74-8943 is hereby
amended to read as follows: 74-8943. The Kansas development finance
authority is hereby authorized to issue obligations in a principal amount
not to exceed $10,000,000 upon certification by the department of com-
merce
and housing that an establishment has entered into a contract with
the secretary pursuant to this act. The authority shall issue such obliga-
tions in an amount of $1 for every $5 the establishment shall invest as
required pursuant to K.S.A. 74-8942, and amendments thereto. The max-
imum maturity of bonds issued pursuant to this act shall be 15 years. Such
obligations shall be issued within 60 days of the date by which the sec-
retary receives the signed contract required pursuant to K.S.A. 74-8944,
and amendments thereto. The proceeds of such issuance shall be used
by the authority for acquiring or improving real property or acquiring or
replacing personal property for modernizing and retooling of an estab-
lishment in the state. Subject to appropriation, the debt service on such
obligations shall be paid by the transfer of an amount not to exceed 75%
of the revenue realized from payments by employees of the establishment
pursuant to K.S.A. 79-3294,
et seq. , and amendments thereto, but no such
transfer shall commence prior to July 1, 2003.
Sec. 84. On and after July 1, 2003, K.S.A. 74-9001, as amended by
section 1 of 2003 House Bill No. 2106, is hereby amended to read as
follows: 74-9001. (a) There is hereby established the council on travel and
tourism. The council shall consist of 17 voting members as follows: (1)
The chairperson of the standing committee on commerce of the senate,
or a member of the senate appointed by the president of the senate; (2)
the vice-chairperson of the standing committee on commerce of the sen-
ate, or a member of the senate appointed by the president of the senate;
(3) the ranking minority member of the standing committee on commerce
of the senate, or a member of the senate appointed by the minority leader
of the senate; (4) the chairperson of the standing committee on tourism
and parks of the house of representatives, or a member of the house of
representatives appointed by the speaker of the house of representatives;
(5) the vice-chairperson of the standing committee on tourism and parks
of the house of representatives, or a member of the house of represen-
tatives appointed by the speaker of the house of representatives; (6) the
ranking minority member of the standing committee on tourism and parks
of the house of representatives, or a member of the house of represen-
tatives appointed by the minority leader of the house of representatives;
and (7) eleven members appointed by the governor. Of the 11 members
appointed by the governor, one shall be appointed from a list of three
nominations made by the travel industry association of Kansas, one shall
be an individual engaged in the lodging industry and appointed from a
list of three nominations made by the Kansas restaurant and hospitality
association, one shall be an individual engaged in the restaurant industry
and appointed from a list of three nominations made by the Kansas res-
taurant and hospitality association, one shall be appointed from a list of
three nominations made by the petroleum marketers and convenience
store association of Kansas, one shall be appointed from a list of three
nominations by the Kansas sport hunting association and six shall be ap-
pointed to represent the general public. In addition to the voting mem-
bers of the council, four members of the council shall serve ex officio:
The secretary of commerce
and housing , the secretary of transportation,
the secretary of wildlife and parks and the executive director of the state
historical society. Each ex officio member of the council may designate
an officer or employee of the state agency of the ex officio member to
serve on the council in place of the ex officio member. The ex officio
members of the council, or their designees, shall be nonvoting members
of the council and shall provide information and advice to the council.
(b) Legislator members shall be appointed for terms coinciding with
the terms for which such members are elected. Of the 11 members first
appointed by the governor, six shall be appointed for terms of three years
and five shall be appointed for terms of two years as determined by the
governor. Thereafter, all members appointed by the governor shall be
appointed for terms of three years. All members appointed to fill vacan-
cies in the membership of the council and all members appointed to
succeed members appointed to membership on the council shall be ap-
pointed in like manner as that provided for the original appointment of
the member succeeded.
(c) On July 1 of each year the council shall elect a chairperson and
vice-chairperson from among its members. The council shall meet at least
four times each year at the call of the chairperson of the council. Nine
voting members of the council shall constitute a quorum.
(d) Members of the council attending meetings of such council, or
attending a subcommittee meeting thereof authorized by such council,
shall be paid amounts for mileage as provided in subsection (c) of K.S.A.
75-3223 and amendments thereto, or a lesser amount as determined by
the secretary of commerce
and housing . Amounts paid under this sub-
section to ex officio members of the council, or their designees, shall be
from appropriations to the state agencies of which such members are
officers or employees upon warrants of the director of accounts and re-
ports issued pursuant to vouchers approved by the chief administrative
officers of such agencies. Amounts paid under this subsection to voting
members of the council shall be from moneys available for the payment
of such amounts upon warrants of the director of accounts and reports
issued pursuant to vouchers approved by the chairperson of the council.
Sec. 85. On and after July 1, 2003, K.S.A. 74-9002 is hereby
amended to read as follows: 74-9002. The council on travel and tourism
shall: (a) Advise the department of commerce
and housing in the devel-
opment and implementation of the state's tourism marketing and business
development program including, but not limited to, long-range strategies
for attracting visitors to the state; (b) report to the department of com-
merce
and housing information for preparation of the annual budget for
the division of travel and tourism development; (c) identify and review
tourism related issues and current state policies and programs which di-
rectly or indirectly affect travel and tourism in the state and, as appro-
priate, recommend the adoption of new, or the modification of existing,
policies and programs; (d) prepare and submit as a part of the annual
report of the department of commerce
and housing , pursuant to K.S.A.
74-5049, and amendments thereto, a report of findings and recommen-
dations of the council concerning the promoting of travel and tourism in
Kansas and such related matters as the council deems appropriate; and
(e) perform such other acts as may be necessary in carrying out the duties
of the council.
Sec. 86. On and after July 1, 2003, K.S.A. 74-9003 is hereby
amended to read as follows: 74-9003. (a) There is hereby established in
the state treasury the state tourism fund. All moneys credited to the state
tourism fund shall only be used for expenditures for the purposes of
developing new tourism attractions in Kansas and to significantly expand
existing tourism attractions in Kansas. Both public and private entities
shall be eligible to apply for funds under the provisions of this act.

(b) The secretary of commerce and housing shall administer the pro-
visions of this act. The secretary may adopt rules and regulations estab-
lishing criteria for obtaining grants and other expenditures from such fund
and other matters deemed necessary for the administration of this act.
(c) All expenditures from such fund shall be made in accordance with
appropriation acts upon warrants of the
director of accounts and reports
issued pursuant to vouchers approved by the secretary of commerce
and
housing
or the secretary's designee.
(d) The secretary of commerce
and housing shall prepare and submit
budget estimates for all proposed expenditures from the state tourism
fund in accordance with the provisions of K.S.A. 75-3717 and 75-3717b
and amendments thereto. Such budget estimates shall include detailed
information regarding all proposed expenditures for programs, projects,
activities and other matters and shall set forth separately each program,
project, activity or other expenditure for which the proposed expenditures
from the state tourism fund for a fiscal year are for an amount that is
equal to $50,000 or more. Appropriations for the department of com-
merce
and housing of moneys in the state tourism fund for each program,
project, activity or other expenditure for a fiscal year for an amount that
is equal to $50,000 or more shall be made as a separate item of
appropriation.
(e) The legislature shall approve or disapprove of any itemized ex-
penditure from the state tourism fund.
(f) On or before the 10th of each month, the director of accounts and
reports shall transfer from the state general fund to the state tourism fund
established in subsection (a) interest earnings based on:
(1) The average daily balance of moneys in the state tourism fund for
the preceding month; and
(2) the net earnings rate of the pooled money investment portfolio
for the preceding month.
Sec. 87. On and after July 1, 2003, K.S.A. 74-9004 is hereby
amended to read as follows: 74-9004. (a) The council on travel and tour-
ism, established under K.S.A. 74-9001, and amendments thereto, shall
oversee all matters concerning the state tourism fund and expenditures
therefrom.
(b) The council, by a majority vote, shall determine for inclusion in
the department of commerce
and housing budget expenditures from the
state tourism fund.
Sec. 88. On and after July 1, 2003, K.S.A. 74-9005 is hereby
amended to read as follows: 74-9005. (a) The division of travel and tour-
ism of the Kansas department of commerce
and housing shall prepare,
with review and input from the travel industry association of Kansas, a
request for proposals for a consultant to do a large scale study of public
and private tourism efforts in Kansas.
(b) A notice of the request for proposals shall be published once each
week for two consecutive weeks in a newspaper having general circulation
in the community at least 30 days before any action thereon. The request
for proposals shall also be posted on readily accessible bulletin boards in
all offices of the department of commerce
and housing and sent else-
where as the director of travel and tourism development deems best.
(c) The request for proposals shall provide performance specifica-
tions, terms, conditions and other information as deemed advisable to
facilitate the submission of a comprehensive proposal, including, but not
limited to, the fact that the study will:
(1) Analyze the strengths, weaknesses, opportunities and threats that
face development of Kansas tourism;
(2) address the interrelationship between public and private sector
efforts in developing Kansas tourism;
(3) address the interrelationship between state and local interests in
developing Kansas tourism;
(4) make specific recommendations for the attraction, development
and improvement of tourism in Kansas; and
(5) be completed by January 1, 1998, with a report on the study's
results and recommendations derived therefrom to be presented to the
legislature, house committee on tourism, senate committee on transpor-
tation and tourism and to the governor during the 1998 legislative session.
(d) Once the requested proposals are submitted, it shall be the duty
of the council on travel and tourism, established under K.S.A. 74-9001,
and amendments thereto, to review the proposals and participate in the
interviewing process and final selection of a consultant.
(e) Following negotiations and development of the proposed agree-
ment, the council on travel and tourism shall approve the final contract.
(f) Once the consultant is selected and the contract approved under
this section, the selected plan's implementation shall be subject to over-
sight, review and approval by the council on travel and tourism.
(g) For the purposes of this section, the funds required to pay for the
study shall come from state funds taken from the economic development
initiatives fund under K.S.A. 79-4804, and amendments thereto which
are appropriated to the department of commerce
and housing.
Sec. 89. On and after July 1, 2003, K.S.A. 74-9201 is hereby
amended to read as follows: 74-9201. (a) There is hereby established the
Kansas film services commission. The commission shall consist of 19 vot-
ing members as follows: (1) One member of the senate appointed by the
president of the senate; (2) one member of the senate appointed by the
minority leader of the senate; (3) one member of the house of represen-
tatives appointed by the speaker of the house of representatives; (4) one
member of the house of representatives appointed by the minority leader
of the house of representatives; and (5) fifteen members appointed by
the governor. One of the members appointed by the governor shall be
appointed from each tourism region recognized and designated as a tour-
ism region by the secretary of commerce
and housing . All members ap-
pointed by the governor shall be appointed for terms of three years, ex-
cept that of the members first appointed, five shall be appointed for
one-year terms, five shall be appointed for two-year terms and five shall
be appointed for three-year terms. The governor shall designate the term
for which each of the members first appointed shall serve. In addition to
the voting members of the commission, six members of the commission
shall serve ex officio: The secretary of commerce
and housing , the sec-
retary of transportation, the secretary of wildlife and parks, the secretary
of health and environment, the executive director of the Kansas arts com-
mission and the secretary of the state historical society. Each ex officio
member of the commission may designate an officer or employee of the
state agency of the ex officio member to serve on the commission in place
of the ex officio member. The ex officio members of the commission, or
their designees, shall be nonvoting members of the commission and shall
provide information and advice to the commission. In addition to the
voting and ex officio members of the commission, the governor may ap-
point such number of representatives of the film industry to nonvoting
membership on the commission as may be recommended by the secretary
of commerce
and housing.
(b) Legislative members shall be appointed for terms coinciding with

the terms for which such members are elected. All members appointed
to fill vacancies in the membership of the commission and all members
appointed to succeed members appointed to membership on the com-
mission shall be appointed in like manner as that provided for the original
appointment of the member succeeded. All members appointed to fill
vacancies of a member of the commission appointed by the governor shall
be appointed to fill the unexpired term of such member.
(c) The members of the commission shall elect annually a chairperson
and vice-chairperson for the commission from among its members. The
commission shall meet at least four times each year at the call of the
chairperson of the commission. Ten voting members of the commission
shall constitute a quorum.
(d) Members of the commission who are not legislators shall receive
mileage, tolls and parking as provided in K.S.A. 75-3223, and amend-
ments thereto, for attendance at any meeting of the commission or any
subcommittee meeting authorized by the commission. Legislative mem-
bers of the commission shall be paid amounts provided in subsection (e)
of K.S.A. 75-3223, and amendments thereto, for attendance at any meet-
ing of the commission or any subcommittee meeting authorized by the
commission.
Sec. 90. On and after July 1, 2003, K.S.A. 2002 Supp. 75-2935 is
hereby amended to read as follows: 75-2935. The civil service of the state
of Kansas is hereby divided into the unclassified and the classified
services.
(1) The unclassified service comprises positions held by state officers
or employees who are:
(a) Chosen by election or appointment to fill an elective office;
(b) members of boards and commissions, heads of departments re-
quired by law to be appointed by the governor or by other elective offi-
cers, and the executive or administrative heads of offices, departments,
divisions and institutions specifically established by law;
(c) except as otherwise provided under this section, one personal sec-
retary to each elective officer of this state, and in addition thereto, 10
deputies, clerks or employees designated by such elective officer;
(d) all employees in the office of the governor;
(e) officers and employees of the senate and house of representatives
of the legislature and of the legislative coordinating council and all officers
and employees of the office of revisor of statutes, of the legislative re-
search department, of the division of legislative administrative services,
of the division of post audit and the legislative counsel;
(f) chancellor, president, deans, administrative officers, student
health service physicians, pharmacists, teaching and research personnel,
health care employees and student employees in the institutions under
the state board of regents, the executive officer of the board of regents
and the executive officer's employees other than clerical employees, and,
at the discretion of the state board of regents, directors or administrative
officers of departments and divisions of the institution and county exten-
sion agents, except that this subsection (1)(f) shall not be construed to
include the custodial, clerical or maintenance employees, or any employ-
ees performing duties in connection with the business operations of any
such institution, except administrative officers and directors; as used in
this subsection (1)(f), ``health care employees'' means employees of the
university of Kansas medical center who provide health care services at
the university of Kansas medical center and who are medical technicians
or technologists or respiratory therapists, who are licensed professional
nurses or licensed practical nurses, or who are in job classes which are
designated for this purpose by the chancellor of the university of Kansas
upon a finding by the chancellor that such designation is required for the
university of Kansas medical center to recruit or retain personnel for
positions in the designated job classes; and employees of any institution
under the state board of regents who are medical technologists;
(g) operations, maintenance and security personnel employed to im-
plement agreements entered into by the adjutant general and the federal
national guard bureau, and officers and enlisted persons in the national
guard and the naval militia;
(h) persons engaged in public work for the state but employed by
contractors when the performance of such contract is authorized by the
legislature or other competent authority;
(i) persons temporarily employed or designated by the legislature or
by a legislative committee or commission or other competent authority
to make or conduct a special inquiry, investigation, examination or in-
stallation;
(j) officers and employees in the office of the attorney general and
special counsel to state departments appointed by the attorney general,
except that officers and employees of the division of the Kansas bureau
of investigation shall be in the classified or unclassified service as provided
in K.S.A. 75-711, and amendments thereto;
(k) all employees of courts;
(l) client, patient and inmate help in any state facility or institution;
(m) all attorneys for boards, commissions and departments;
(n) the secretary and assistant secretary of the Kansas state historical
society;
(o) physician specialists, dentists, dental hygienists, pharmacists,
medical technologists and long term care workers employed by the de-
partment of social and rehabilitation services;
(p) physician specialists, dentists and medical technologists employed
by any board, commission or department or by any institution under the
jurisdiction thereof;
(q) student employees enrolled in public institutions of higher learn-
ing;
(r) administrative officers, directors and teaching personnel of the
state board of education and the state department of education and of
any institution under the supervision and control of the state board of
education, except that this subsection (1)(r) shall not be construed to
include the custodial, clerical or maintenance employees, or any employ-
ees performing duties in connection with the business operations of any
such institution, except administrative officers and directors;
(s) all officers and employees in the office of the secretary of state;
(t) one personal secretary and one special assistant to the following:
The secretary of administration, the secretary of aging, the secretary of
agriculture, the secretary of commerce
and housing , the secretary of cor-
rections, the secretary of health and environment, the superintendent of
the Kansas highway patrol, the secretary of human resources, the secre-
tary of revenue, the secretary of social and rehabilitation services, the
secretary of transportation, the secretary of wildlife and parks and the
commissioner of juvenile justice;
(u) one personal secretary and one special assistant to the chancellor
and presidents of institutions under the state board of regents;
(v) one personal secretary and one special assistant to the executive
vice chancellor of the university of Kansas medical center;
(w) one public information officer and one chief attorney for the fol-
lowing: The department of administration, the department on aging, the
department of agriculture, the department of commerce
and housing , the
department of corrections, the department of healt h and environment,
the department of human resources, the department of revenue, the de-
partment of social and rehabilitation services, the department of trans-
portation, the Kansas department of wildlife and parks and the commis-

sioner of juvenile justice;
(x) civil service examination monitors;
(y) one executive director, one general counsel and one director of
public affairs and consumer protection in the office of the state corpo-
ration commission;
(z) specifically designated by law as being in the unclassified service;
(aa) all officers and employees of Kansas, Inc. and the Kansas tech-
nology enterprise corporation; and
(bb) any position that is classified as a position in the information
resource manager job class series, that is the chief position responsible
for all information resources management for a state agency, and that
becomes vacant on or after the effective date of this act. Nothing in this
section shall affect the classified status of any employee in the classified
service who is employed on the date immediately preceding the effective
date of this act in any position that is a classified position in the infor-
mation resource manager job class series and the unclassified status as
prescribed by this subsection shall apply only to a person appointed to
any such position on or after the effective date of this act that is the chief
position responsible for all information resources management for a state
agency.
(2) The classified service comprises all positions now existing or here-
after created which are not included in the unclassified service. Appoint-
ments in the classified service shall be made according to merit and fitness
from eligible pools which so far as practicable shall be competitive. No
person shall be appointed, promoted, reduced or discharged as an officer,
clerk, employee or laborer in the classified service in any manner or by
any means other than those prescribed in the Kansas civil service act and
the rules adopted in accordance therewith.
(3) For positions involving unskilled, or semiskilled duties, the sec-
retary of administration, as provided by law, shall establish rules and reg-
ulations concerning certifications, appointments, layoffs and reemploy-
ment which may be different from the rules and regulations established
concerning these processes for other positions in the classified service.
(4) Officers authorized by law to make appointments to positions in
the unclassified service, and appointing officers of departments or insti-
tutions whose employees are exempt from the provisions of the Kansas
civil service act because of the constitutional status of such departments
or institutions shall be permitted to make appointments from appropriate
pools of eligibles maintained by the division of personnel services.
Sec. 91. On and after July 1, 2003, K.S.A. 2002 Supp. 79-213 is
hereby amended to read as follows: 79-213. (a) Any property owner re-
questing an exemption from the payment of ad valorem property taxes
assessed, or to be assessed, against their property shall be required to file
an initial request for exemption, on forms approved by the board of tax
appeals and provided by the county appraiser.
(b) The initial exemption request shall identify the property for which
the exemption is requested and state, in detail, the legal and factual basis
for the exemption claimed.
(c) The request for exemption shall be filed with the county appraiser
of the county where such property is principally located.
(d) After a review of the exemption request, and after a preliminary
examination of the facts as alleged, the county appraiser shall recommend
that the exemption request either be granted or denied, and, if necessary,
that a hearing be held. If a denial is recommended, a statement of the
controlling facts and law relied upon shall be included on the form.
(e) The county appraiser, after making such written recommenda-
tion, shall file the request for exemption and the recommendations of the
county appraiser with the board of tax appeals.
(f) Upon receipt of the request for exemption, the board shall docket
the same and notify the applicant and the county appraiser of such fact.
(g) After examination of the request for exemption, and the county
appraiser's recommendation related thereto, the board may fix a time and
place for hearing, and shall notify the applicant and the county appraiser
of the time and place so fixed. A request for exemption pursuant to: (1)
Section 13 of article 11 of the Kansas constitution; or (2) K.S.A. 79-201a

Second
, and amendments thereto, for property constructed or purchased,
in whole or in part, with the proceeds of revenue bonds under the au-
thority of K.S.A. 12-1740 to 12-1749, inclusive, and amendments thereto,
prepared in accordance with instructions and assistance which shall be
provided by the department of commerce
and housing , shall be deemed
approved unless scheduled for hearing within 30 days after the date of
receipt of all required information and data relating to the request for
exemption, and such hearing shall be conducted within 90 days after such
date. Such time periods shall be determined without regard to any ex-
tension or continuance allowed to either party to such request. In any
case where a party to such request for exemption requests a hearing
thereon, the same shall be granted. Hearings shall be conducted in ac-
cordance with the provisions of the Kansas administrative procedure act.
In all instances where the board sets a request for exemption for hearing,
the county shall be represented by its county attorney or county
counselor.
(h) Except as otherwise provided by subsection (g), in the event of a
hearing, the same shall be originally set not later than 90 days after the
filing of the request for exemption with the board.
(i) During the pendency of a request for exemption, no person, firm,
unincorporated association, company or corporation charged with real
estate or personal property taxes pursuant to K.S.A. 79-2004 and 79-
2004a, and amendments thereto, on the tax books in the hands of the
county treasurer shall be required to pay the tax from the date the request
is filed with the county appraiser until the expiration of 30 days after the
board issued its order thereon and the same becomes a final order. In
the event that taxes have been assessed against the subject property, no
interest shall accrue on any unpaid tax for the year or years in question
nor shall the unpaid tax be considered delinquent from the date the re-
quest is filed with the county appraiser until the expiration of 30 days
after the board issued its order thereon. In the event the board deter-
mines an application for exemption is without merit and filed in bad faith
to delay the due date of the tax, the tax shall be considered delinquent
as of the date the tax would have been due pursuant to K.S.A. 79-2004
and 79-2004a, and amendments thereto, and interest shall accrue as pre-
scribed therein.
(j) In the event the board grants the initial request for exemption,
the same shall be effective beginning with the date of first exempt use
except that, with respect to property the construction of which com-
menced not to exceed 24 months prior to the date of first exempt use,
the same shall be effective beginning with the date of commencement of
construction.
(k) In conjunction with its authority to grant exemptions, the board
shall have the authority to abate all unpaid taxes that have accrued from
and since the effective date of the exemption. In the event that taxes have
been paid during the period where the subject property has been deter-
mined to be exempt, the board shall have the authority to order a refund
of taxes for a period not to exceed three years.
(l) The provisions of this section shall not apply to: (1) Farm machin-
ery and equipment exempted from ad valorem taxation by K.S.A. 79-201j,

and amendments thereto; (2) personal property exempted from ad valo-
rem taxation by K.S.A. 79-215, and amendments thereto; (3) wearing
apparel, household goods and personal effects exempted from ad valorem
taxation by K.S.A. 79-201c, and amendments thereto; (4) livestock; (5)
hay and silage exempted from ad valorem taxation by K.S.A. 79-201d, and
amendments thereto; (6) merchants' and manufacturers' inventories ex-
empted from ad valorem taxation by K.S.A. 79-201m and amendments
thereto; (7) grain exempted from ad valorem taxation by K.S.A. 79-201n,
and amendments thereto; (8) property exempted from ad valorem taxa-
tion by K.S.A. 79-201a
Seventeenth and amendments thereto, including
all property previously acquired by the secretary of transportation or a
predecessor in interest, which is used in the administration, construction,
maintenance or operation of the state system of highways. The secretary
of transportation shall at the time of acquisition of property notify the
county appraiser in the county in which the property is located that the
acquisition occurred and provide a legal description of the property ac-
quired; (9) property exempted from ad valorem taxation by K.S.A. 79-
201a
Ninth, and amendments thereto, including all property previously
acquired by the Kansas turnpike authority which is used in the adminis-
tration, construction, maintenance or operation of the Kansas turnpike.
The Kansas turnpike authority shall at the time of acquisition of property
notify the county appraiser in the county in which the property is located
that the acquisition occurred and provide a legal description of the prop-
erty acquired; (10) aquaculture machinery and equipment exempted from
ad valorem taxation by K.S.A. 79-201j, and amendments thereto. As used
in this section, ``aquaculture'' has the same meaning ascribed thereto by
K.S.A. 47-1901, and amendments thereto; (11) Christmas tree machinery
and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
and amendments thereto; (12) property used exclusively by the state or
any municipality or political subdivision of the state for right-of-way pur-
poses. The state agency or the governing body of the municipality or
political subdivision shall at the time of acquisition of property for right-
of-way purposes notify the county appraiser in the county in which the
property is located that the acquisition occurred and provide a legal de-
scription of the property acquired; (13) machinery, equipment, materials
and supplies exempted from ad valorem taxation by K.S.A. 79-201w, and
amendments thereto; (14) vehicles owned by the state or by any political
or taxing subdivision thereof and used exclusively for governmental pur-
poses; (15) property used for residential purposes which is exempted pur-
suant to K.S.A. 79-201x from the property tax levied pursuant to K.S.A.
72-6431, and amendments thereto; (16) from and after July 1, 1998, ve-
hicles which are owned by an organization having as one of its purposes
the assistance by the provision of transit services to the elderly and to
disabled persons and which are exempted pursuant to K.S.A. 79-201
Ninth; and (17) from and after July 1, 1998, motor vehicles exempted
from taxation by subsection (e) of K.S.A. 79-5107, and amendments
thereto.
(m) The provisions of this section shall apply to property exempt pur-
suant to the provisions of section 13 of article 11 of the Kansas
constitution.
(n) The provisions of subsection (j) and (k) as amended by this act
shall be applicable to all taxable years commencing after December 31,
1995.
Sec. 92. On and after July 1, 2003, K.S.A. 2002 Supp. 79-251 is
hereby amended to read as follows: 79-251. Prior to the granting of an
exemption for any property from ad valorem taxation pursuant to the
provisions of section 13 of article 11 of the Kansas constitution, the board
of county commissioners of any county or the governing body of any city,
as the case requires, shall be required to do the following:
(a) Develop and adopt official policies and procedures for the grant-
ing of such exemptions including:
(1) The required preparation of an analysis of the costs and benefits
of each exemption, including the effect of the exemption on state reve-
nues, prior to the granting of such exemption;
(2) a procedure for monitoring the compliance of a business receiving
an exemption with any terms or conditions established by the governing
body for the granting of the exemption;
(b) conduct a public hearing on the granting of such exemption. No-
tice of the public hearing shall be published at least once seven days prior
to the hearing in the official city or county newspaper, as the case re-
quires, and shall indicate the purpose, time and place thereof. In addition
to such publication notice, the city or county clerk, as the case requires,
shall notify in writing the governing body of the city or county and unified
school district within which the property proposed for exemption is lo-
cated; and
(c) adopt a resolution containing the following findings of fact:
(1) That the property for which the exemption is to be granted will
be used exclusively for the purposes specified in section 13 of article 11
of the Kansas constitution; and
(2) if the business using the property is relocating from one city or
county to another within this state, that the business has received approval
of the secretary of commerce
and housing prior to qualifying for the
exemption upon a finding by the secretary that such relocation is neces-
sary to prevent the business from relocating outside this state.
Sec. 93. On and after July 1, 2003, K.S.A. 2002 Supp. 79-3271 is
hereby amended to read as follows: 79-3271. As used in this act, unless
the context otherwise requires: (a) ``Business income'' means income aris-
ing from transactions and activity in the regular course of the taxpayer's
trade or business and includes income from tangible and intangible prop-
erty if the acquisition, management, and disposition of the property con-
stitute integral parts of the taxpayer's regular trade or business operations,
except that for taxable years commencing after December 31, 1995, a
taxpayer may elect that all income derived from the acquisition, manage-
ment, use or disposition of tangible or intangible property constitutes
business income. The election shall be effective and irrevocable for the
taxable year of the election and the following nine taxable years. The
election shall be binding on all members of a unitary group of
corporations.
(b) ``Commercial domicile'' means the principal place from which the
trade or business of the taxpayer is directed or managed.
(c) ``Compensation'' means wages, salaries, commissions and any
other form of remuneration paid to employees for personal services.
(d) ``Financial organization'' means any bank, trust company, savings
bank, industrial bank, land bank, safe deposit company, private banker,
savings and loan association, credit union, cooperative bank, or any type
of insurance company, but such term shall not be deemed to include any
business entity, other than those hereinbefore enumerated, whose pri-
mary business activity is making consumer loans or purchasing retail in-
stallment contracts from one or more sellers.
(e) ``Nonbusiness income'' means all income other than business
income.
(f) ``Public utility'' means any business entity which owns or operates
for public use any plant, equipment, property, franchise, or license for
the transmission of communications, transportation of goods or persons,
or the production, storage, transmission, sale, delivery, or furnishing of

electricity, water, steam, oil, oil products or gas.
(g) ``Original return'' means the first return filed to report the income
of a taxpayer for a taxable year or period, irrespective of whether such
return is filed on a single entity basis or a combined basis.
(h) ``Sales'' means all gross receipts of the taxpayer not allocated un-
der K.S.A. 79-3274 through 79-3278, and amendments thereto.
(i) ``State'' means any state of the United States, the District of Co-
lumbia, the Commonwealth of Puerto Rico, any territory or possession
of the United States, and any foreign country or political subdivision
thereof.
(j) ``Telecommunications company'' means any business entity or uni-
tary group of entities whose primary business activity is the transmission
of communications in the form of voice, data, signals or facsimile com-
munications by wire or fiber optic cable.
(k) ``Distressed area taxpayer'' means a corporation which: (1) Is lo-
cated in a county which has a population of not more than 45,000 persons
and which, as certified by the department of commerce
and housing , has
sustained an adverse economic impact due to the closure of a state hos-
pital in such county pursuant to the recommendations of the hospital
closure commission; and (2) which has a total annual payroll of
$20,000,000 or more for employees employed within such county.
(l) For the purposes of this subsection and subsection (b)(5) of K.S.A.
79-3279, and amendments thereto, the following terms are defined:
(1) ``Administration services'' include clerical, fund or shareholder ac-
counting, participant record keeping, transfer agency, bookkeeping, data
processing, custodial, internal auditing, legal and tax services performed
for an investment company;
(2) ``distribution services'' include the services of advertising, servic-
ing, marketing, underwriting or selling shares of an investment company,
but, in the case of advertising, servicing or marketing shares, only where
such service is performed by a person who is, or in the case of a closed
end company, was, either engaged in the services of underwriting or sell-
ing investment company shares or affiliated with a person who is engaged
in the service of underwriting or selling investment company shares. In
the case of an open end company, such service of underwriting or selling
shares must be performed pursuant to a contract entered into pursuant
to 15 U.S.C.§ 80a-15(b), as in effect on the effective date
of this act;
(3) ``investment company'', means any person registered under the
federal Investment Company Act of 1940, as in effect on the effective
date of this act, or a company which would be required to register as an
investment company under such act except that such person is exempt to
such registration pursuant to§ 80a-3(c)(1) of such act;
(4) ``investment funds service corporation'' includes any corporation
or S corporation headquartered in and doing business in this state which
derives more than 50% of its gross income from the provision of man-
agement, distribution or administration services to or on behalf of an
investment company or from trustees, sponsors and participants of em-
ployee benefit plans which have accounts in an investment company;
(5) ``management services'' include the rendering of investment ad-
vice to an investment company making determinations as to when sales
and purchases of securities are to be made on behalf of the investment
company, or the selling or purchasing of securities constituting assets of
an investment company, and related activities, but only where such activ-
ity or activities are performed:
(A) Pursuant to a contract with the investment company entered into
pursuant to 15 U.S.C. § 80a-15(a), in effect on the effective date of this
act; or
(B) for a person that has entered into such contract with the invest-
ment company;
(6) ``qualifying business income'' is business income derived from the
provision of management, distribution or administration services to or on
behalf of an investment company or from trustees, sponsors and partici-
pants of employee benefit plans which have accounts in an investment
company; and
(7) ``residence'' is the fund shareholder's primary residence address.
Sec. 94. On and after July 1, 2003, K.S.A. 2002 Supp. 79-3271a is
hereby amended to read as follows: 79-3271a. As used in this act, unless
the context otherwise requires: (a) ``Business income'' means income aris-
ing from transactions and activity in the regular course of the taxpayer's
trade or business and includes income from tangible and intangible prop-
erty if the acquisition, management, and disposition of the property con-
stitute integral parts of the taxpayer's regular trade or business operations,
except that for taxable years commencing after December 31, 1995, a
taxpayer may elect that all income constitutes business income. The elec-
tion shall be effective and irrevocable for the taxable year of the election
and the following nine taxable years. The election shall be binding on all
members of a unitary group of corporations.
(b) ``Commercial domicile'' means the principal place from which the
trade or business of the taxpayer is directed or managed.
(c) ``Compensation'' means wages, salaries, commissions and any
other form of remuneration paid to employees for personal services.
(d) ``Financial organization'' means any bank, trust company, savings
bank, industrial bank, land bank, safe deposit company, private banker,
savings and loan association, credit union, cooperative bank, investment
company, or any type of insurance company, but such term shall not be
deemed to include any business entity, other than those hereinbefore
enumerated, whose primary business activity is making consumer loans
or purchasing retail installment contracts from one or more sellers.
(e) ``Nonbusiness income'' means all income other than business
income.
(f) ``Public utility'' means any business entity which owns or operates
for public use any plant, equipment, property, franchise, or license for
the transmission of communications, transportation of goods or persons,
or the production, storage, transmission, sale, delivery, or furnishing of
electricity, water, steam, oil, oil products or gas.
(g) ``Sales'' means all gross receipts of the taxpayer not allocated un-
der K.S.A. 79-3274 through 79-3278, and amendments thereto.
(h) ``State'' means any state of the United States, the District of Co-
lumbia, the Commonwealth of Puerto Rico, any territory or possession
of the United States, and any foreign country or political subdivision
thereof.
(i) ``Telecommunications company'' means any business entity or uni-
tary group of entities whose primary business activity is the transmission
of communications in the form of voice, data, signals or facsimile com-
munications by wire or fiber optic cable.
(j) ``Distressed area taxpayer'' means a corporation which: (1) Is lo-
cated in a county which has a population of not more than 45,000 persons
and which, as certified by the department of commerce
and housing , has
sustained an adverse economic impact due to the closure of a state hos-
pital in such county pursuant to the recommendations of the hospital
closure commission; and (2) which has a total annual payroll of
$20,000,000 or more for employees employed within such county.
Sec. 95. On and after July 1, 2003, K.S.A. 2002 Supp. 79-32,160a is
hereby amended to read as follows: 79-32,160a. (a) For taxable years
commencing after December 31, 1999, any taxpayer who shall invest in

a qualified business facility, as defined in subsection (b) of K.S.A. 79-
32,154, and amendments thereto, and also meets the definition of a busi-
ness in subsection (b) of K.S.A. 74-50,114, and amendments thereto, shall
be allowed a credit for such investment, in an amount determined under
subsection (b) or (c), as the case requires, against the tax imposed by the
Kansas income tax act or where the qualified business facility is the prin-
cipal place from which the trade or business of the taxpayer is directed
or managed and the facility has facilitated the creation of at least 20 new
full-time positions, against the premium tax or privilege fees imposed
pursuant to K.S.A. 40-252, and amendments thereto, or as measured by
the net income of financial institutions imposed pursuant to chapter 79,
article 11 of the Kansas Statutes Annotated, for the taxable year during
which commencement of commercial operations, as defined in subsection
(f) of K.S.A. 79-32,154, and amendments thereto, occurs at such qualified
business facility. In the case of a taxpayer who meets the definition of a
manufacturing business in subsection (d) of K.S.A. 74-50,114, and
amendments thereto, no credit shall be allowed under this section unless
the number of qualified business facility employees, as determined under
subsection (d) of K.S.A. 79-32,154, and amendments thereto, engaged or
maintained in employment at the qualified business facility as a direct
result of the investment by the taxpayer for the taxable year for which the
credit is claimed equals or exceeds two. In the case of a taxpayer who
meets the definition of a nonmanufacturing business in subsection (f) of
K.S.A. 74-50,114, and amendments thereto, no credit shall be allowed
under this section unless the number of qualified business facility em-
ployees, as determined under subsection (d) of K.S.A. 79-32,154, and
amendments thereto, engaged or maintained in employment at the qual-
ified business facility as a direct result of the investment by the taxpayer
for the taxable year for which the credit is claimed equals or exceeds five.
Where an employee performs services for the taxpayer outside the qual-
ified business facility, the employee shall be considered engaged or main-
tained in employment at the qualified business facility if (1) the em-
ployee's service performed outside the qualified business facility is
incidental to the employee's service inside the qualified business facility,
or (2) the base of operations or, the place from which the service is di-
rected or controlled, is at the qualified business facility.
(b) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility which is located in a designated nonmetro-
politan region established under K.S.A. 74-50,116, and amendments
thereto, on or after the effective date of this act, shall be a portion of the
income tax imposed by the Kansas income tax act on the taxpayer's Kansas
taxable income, the premium tax or privilege fees imposed pursuant to
K.S.A. 40-252, and amendments thereto, or the privilege tax as measured
by the net income of financial institutions imposed pursuant to chapter
79, article 11 of the Kansas Statutes Annotated, for the taxable year for
which such credit is allowed, but in the case where the qualified business
facility investment was made prior to January 1, 1996, not in excess of
50% of such tax. Such portion shall be an amount equal to the sum of
the following:
(1) Two thousand five hundred dollars for each qualified business
facility employee determined under K.S.A. 79-32,154, and amendments
thereto; plus
(2) one thousand dollars for each $100,000, or major fraction thereof,
which shall be deemed to be 51% or more, in qualified business facility
investment, as determined under K.S.A. 79-32,154, and amendments
thereto.
(c) The credit allowed by subsection (a) for any taxpayer who invests
in a qualified business facility, which is not located in a nonmetropolitan
region established under K.S.A. 74-50,116, and amendments thereto, and
which also meets the definition of business in subsection (b) of K.S.A.
74-50,114, and amendments thereto, on or after the effective date of this
act, shall be a portion of the income tax imposed by the Kansas income
tax act on the taxpayer's Kansas taxable income, the premium tax or priv-
ilege fees imposed pursuant to K.S.A. 40-252, and amendments thereto,
or the privilege tax as measured by the net income of financial institutions
imposed pursuant to chapter 79, article 11 of the Kansas Statutes An-
notated, for the taxable year for which such credit is allowed, but in the
case where the qualified business facility investment was made prior to
January 1, 1996, not in excess of 50% of such tax. Such portion shall be
an amount equal to the sum of the following:
(1) One thousand five hundred dollars for each qualified business
facility employee as determined under K.S.A. 79-32,154, and amend-
ments thereto; and
(2) one thousand dollars for each $100,000, or major fraction thereof,
which shall be deemed to be 51% or more, in qualified business facility
investment as determined under K.S.A. 79-32,154, and amendments
thereto.
(d) The credit allowed by subsection (a) for each qualified business
facility employee and for qualified business facility investment shall be a
one-time credit. If the amount of the credit allowed under subsection (a)
exceeds the tax imposed by the Kansas income tax act on the taxpayer's
Kansas taxable income, the premium tax and privilege fees imposed pur-
suant to K.S.A. 40-252, and amendments thereto, or the privilege tax as
measured by the net income of financial institutions imposed pursuant to
chapter 79, article 11 of the Kansas Statutes Annotated for the taxable
year, or in the case where the qualified business facility investment was
made prior to January 1, 1996, 50% of such tax imposed upon the amount
which exceeds such tax liability or such portion thereof may be carried
over for credit in the same manner in the succeeding taxable years until
the total amount of such credit is used. Except that, before the credit is
allowed, a taxpayer, who meets the definition of a manufacturing business
in subsection (d) of K.S.A. 74-50,114, and amendments thereto, shall
recertify annually that the net increase of a minimum of two qualified
business facility employees has continued to be maintained and a tax-
payer, who meets the definition of a nonmanufacturing business in sub-
section (f) of K.S.A. 74-50,114, and amendments thereto, shall recertify
annually that the net increase of a minimum of five qualified business
employees has continued to be maintained.
(e) Notwith standing the foregoing provisions of this section, any tax-
payer qualified and certified under the provisions of K.S.A. 74-50,131,
and amendments thereto; which, prior to making a commitment to invest
in a qualified Kansas business, has filed a certificate of intent to invest in
a qualified business facility in a form satisfactory to the secretary of com-
merce
and housing ; and that has received written approval from the sec-
retary of commerce
and housing for participation and has participated,
during the tax year for which the exemption is claimed, in the Kansas
industrial training, Kansas industrial retraining or the state of Kansas in-
vestments in lifelong learning program or is eligible for the tax credit
established in K.S.A. 74-50,132, and amendments thereto, shall be enti-
tled to a credit in an amount equal to 10% of that portion of the qualified
business facility investment which exceeds $50,000 in lieu of the credit
provided in subsection (b)(2) or (c)(2) without regard to the number of
qualified business facility employees engaged or maintained in employ-
ment at the qualified business facility. The credit allowed by this subsec-

tion shall be a one-time credit. If the amount thereof exceeds the tax
imposed by the Kansas income tax act on the taxpayer's Kansas taxable
income or the premium tax or privilege fees imposed pursuant to K.S.A.
40-252, and amendments thereto, or the privilege tax as measured by net
income of financial institutions imposed pursuant to chapter 79, article
11 of the Kansas Statutes Annotated for the taxable year, the amount
thereof which exceeds such tax liability may be carried forward for credit
in the succeeding taxable year or years until the total amount of the tax
credit is used, except that no such tax credit shall be carried forward for
deduction after the 10th taxable year succeeding the taxable year in which
such credit initially was claimed and no carry forward shall be allowed for
deduction in any succeeding taxable year unless the taxpayer continued
to be qualified and was recertified for such succeeding taxable year pur-
suant to K.S.A. 74-50,131, and amendments thereto.
(f) This section and K.S.A. 79-32,160b, and amendments thereto,
shall be part of and supplemental to the job expansion and investment
credit act of 1976 and acts amendatory thereof and supplemental thereto.
Sec. 96. On and after July 1, 2003, K.S.A. 2002 Supp. 79-32,197a is
hereby amended to read as follows: 79-32,197a. Any business firm or
business entity not subject to Kansas income, privilege or premiums tax,
hereinafter designated the assignor, may sell, assign, convey or otherwise
transfer tax credits allowed and earned pursuant to K.S.A. 79-32,196, and
amendments thereto, for an amount not less than 50% of the value of
any such credit. Such credits shall be deemed to be allowed and earned
by any such business entity which is only disqualified therefrom by reason
of not being subject to such Kansas taxes. The business firm acquiring
earned credits, hereinafter designated the assignee, may use the amount
of the acquired credits to offset up to 100% of its income, privilege or
premiums tax liability for the taxable year in which such acquisition was
made. Only the full credit amount for any one contribution may be trans-
ferred and such credit may be transferred one time. Unused credit
amounts claimed by the assignee may be carried forward for up to five
years, except that all such amounts shall be claimed within 10 years fol-
lowing the tax year in which the contribution was made. The assignor
shall enter into a written agreement with the assignee establishing the
terms and conditions of the agreement and shall perfect such transfer by
notifying the director of community development of the department of
commerce
and housing in writing within 30 calendar days following the
effective date of the transfer and shall provide any information as may be
required by the director of community development of the department
of commerce
and housing to administer and carry out the provisions of
this section. The amount received by the assignor of such tax credit shall
be taxable as income of the assignor, and the excess of the value of such
credit over the amount paid by the assignee for such credit shall be taxable
as income of the assignee.
Sec. 97. On and after July 1, 2003, K.S.A. 79-32,198 is hereby
amended to read as follows: 79-32,198. The director of community de-
velopment of the department of commerce
and housing shall annually
review and approve or disapprove the proposal of the provider of com-
munity services, except that, no proposal for crime prevention shall be
approved without the endorsement of the agency of local government
within the area in which crime prevention is to be provided. The proposal
shall set forth the program to be conducted, why the program is needed,
the estimated amount to be invested in the program and the plans for
implementing the program. The director is hereby authorized to prom-
ulgate rules and regulations for establishing criteria for evaluating such
proposals by the provider of community services for approval or disap-
proval and for establishing priorities for approval or disapproval of such
proposals by the provider of community services with the assistance and
approval of the secretary of the department of revenue.
Sec. 98. On and after July 1, 2003, K.S.A. 2002 Supp. 79-3620, as
amended by section 5 of 2003 Senate Substitute for House Bill No. 2208,
is hereby amended to read as follows: 79-3620. (a) All revenue collected
or received by the director of taxation from the taxes imposed by this act
shall be remitted to the state treasurer in accordance with the provisions
of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such
remittance, the state treasurer shall deposit the entire amount in the state
treasury, less amounts withheld as provided in subsection (b) and amounts
credited as provided in subsection (c) and (d), to the credit of the state
general fund.
(b) A refund fund, designated as ``sales tax refund fund'' not to exceed
$100,000 shall be set apart and maintained by the director from sales tax
collections and estimated tax collections and held by the state treasurer
for prompt payment of all sales tax refunds including refunds authorized
under the provisions of K.S.A. 79-3635, and amendments thereto. Such
fund shall be in such amount, within the limit set by this section, as the
director shall determine is necessary to meet current refunding require-
ments under this act. In the event such fund as established by this section
is, at any time, insufficient to provide for the payment of refunds due
claimants thereof, the director shall certify the amount of additional funds
required to the director of accounts and reports who shall promptly trans-
fer the required amount from the state general fund to the sales tax refund
fund, and notify the state treasurer, who shall make proper entry in the
records.
(c) (1) The state treasurer shall credit 5/98 of the revenue collected
or received from the tax imposed by K.S.A. 79-3603, and amendments
thereto, at the rate of 4.9%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(2) The state treasurer shall credit 5/104 of the revenue collected or
received from the tax imposed by K.S.A. 79-3603, and amendments
thereto, at the rate of 5.2%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(3) The state treasurer shall credit 5/106 of the revenue collected or
received from the tax imposed by K.S.A. 79-3603, and amendments
thereto, at the rate of 5.3%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(4) The state treasurer shall credit 1/20 of the revenue collected and
received from the tax imposed by K.S.A. 79-3603, and amendments
thereto, at the rate of 5%, and deposited as provided by subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(d) The state treasurer shall credit all revenue collected or received
from the tax imposed by K.S.A. 79-3603, and amendments thereto, as
certified by the director, from taxpayers doing business within that por-
tion of a redevelopment district occupied by a redevelopment project or
taxpayers doing business with such entity financed by a special bond pro-
ject as defined in K.S.A. 12-1770a, and amendments thereto, that was
determined by the secretary of commerce
and housing to be of statewide
as well as local importance or will create a major tourism area for the
state or the project was designated as a special bond project as defined
in K.S.A. 12-1770a, and amendments thereto, to the city bond finance

fund, which fund is hereby created. The provisions of this subsection shall
expire when the total of all amounts credited hereunder and under sub-
section (d) of K.S.A. 79-3710, and amendments thereto, is sufficient to
retire the special obligation bonds issued for the purpose of financing all
or a portion of the costs of such redevelopment or special bond project.
Sec. 99. On and after July 1, 2003, K.S.A. 2002 Supp. 79-3620b is
hereby amended to read as follows: 79-3620b. Moneys credited to the
city bond finance fund in accordance with the provisions of subsections
(d) of K.S.A. 79-3620 and (d) of K.S.A. 79-3710, and amendments thereto,
shall be distributed biannually to cities which have issued special obliga-
tion bonds to finance, in whole or in part, a redevelopment project which
was determined by the secretary of commerce
and housing to be of state-
wide as well as local importance or will create a major tourism area for
the state as defined in K.S.A. 12-1770a, and amendments thereto. The
state treasurer shall make such biannual distributions on such dates as
mutually agreed to by the city and the state treasurer. The total of all
distributions under this section shall not exceed an amount determined
to be sufficient to retire the principal and interest payable on such special
obligation bonds. Moneys paid to cities hereunder shall be deposited in
a special fund of the city to pay the costs described herein.
Sec. 100. On and after July 1, 2003, K.S.A. 2002 Supp. 79-3710, as
amended by section 8 of 2003 Senate Substitute for House Bill No. 2208,
is hereby amended to read as follows: 79-3710. (a) All revenue collected
or received by the director under the provisions of this act shall be re-
mitted to the state treasurer in accordance with the provisions of K.S.A.
75-4215, and amendments thereto. Upon receipt of each such remittance,
the state treasurer shall deposit the entire amount in the state treasury,
less amounts set apart as provided in subsection (b) and amounts credited
as provided in subsection (c) and (d), to the credit of the state general
fund.
(b) A revolving fund, designated as ``compensating tax refund fund''
not to exceed $10,000 shall be set apart and maintained by the director
from compensating tax collections and estimated tax collections and held
by the state treasurer for prompt payment of all compensating tax refunds.
Such fund shall be in such amount, within the limit set by this section,
as the director shall determine is necessary to meet current refunding
requirements under this act.
(c) (1) The state treasurer shall credit 5/98 of the revenue collected
or received from the tax imposed by K.S.A. 79-3703, and amendments
thereto, at the rate of 4.9%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(2) The state treasurer shall credit 5/104 of the revenue collected or
received from the tax imposed by K.S.A. 79-3703, and amendments
thereto, at the rate of 5.2%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(3) The state treasurer shall credit 5/106 of the revenue collected or
received from the tax imposed by K.S.A. 79-3703, and amendments
thereto, at the rate of 5.3%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(4) The state treasurer shall credit 1/20 of the revenue collected or
received from the tax imposed by K.S.A. 79-3703, and amendments
thereto, at the rate of 5%, and deposited as provided by subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(d) The state treasurer shall credit all revenue collected or received
from the tax imposed by K.S.A. 79-3703, and amendments thereto, as
certified by the director, from taxpayers doing business within that por-
tion of a redevelopment district occupied by a redevelopment project that
was determined by the secretary of commerce
and housing to be of state-
wide as well as local importance or will create a major tourism area for
the state as defined in K.S.A. 12-1770a, and amendments thereto, to the
city bond finance fund created by subsection (d) of K.S.A. 79-3620, and
amendments thereto. The provisions of this subsection shall expire when
the total of all amounts credited hereunder and under subsection (d) of
K.S.A. 79-3620, and amendments thereto, is sufficient to retire the special
obligation bonds issued for the purpose of financing all or a portion of
the costs of such redevelopment project.
This subsection shall not apply to a project designated as a special bond
project as defined in subsection (z) of K.S.A. 12-1770a, and amendments
thereto.
Sec. 101. On and after July 1, 2003, Section 2 of 2003 Senate Sub-
stitute for House Bill No. 2208, is hereby amended to read as follows: (a)
The governing body of a city may establish one or more special bond
projects in any area within such city. The special bond projects shall be
eligible for financing by special obligation bonds payable from revenues
described by subsection (a)(1)(D) of K.S.A. 12-1774, and amendments
thereto. Each special bond project shall first be approved by the secretary.
The secretary may approve a special bond project located in a redevel-
opment district established by a city prior to the effective date of this act.
A special bond project shall not be granted to any business that proposes
to relocate its business from another area of the state into such city, for
the purpose of consideration for a special bond project and shall not
receive any of the benefits provided by K.S.A. 12-1770
et seq. , and amend-
ments thereto. A special bond project shall not be approved by the sec-
retary if the marketing study required by section 3, and amendments
thereto, indicates a substantial negative impact upon businesses in the
project market area or the granting of such project would cause a default
in the payment of any outstanding special obligation bonds as authorized
pursuant to subsection (a)(1)(D) of K.S.A. 12-1774, and amendments
thereto.
(b) The maximum maturity of special obligation bonds payable pri-
marily from revenues described by subsection (a)(1)(D) of K.S.A. 12-
1774, and amendments thereto, to finance special bond projects pursuant
to this section shall not exceed 20 years.
(c) Any redevelopment project plan in a redevelopment district lo-
cated in the city of Wichita that is eligible for benefits provided by K.S.A.
12-1774
et seq ., and amendments thereto, and includes an arena or arena-
like structure shall be subject to approval by a vote by the citizens of
Wichita at an election held for this purpose prior to approval by the
secretary of commerce
and housing.
Sec. 102. On and after July 1, 2003, Section 16 of 2003 Senate Bill
No. 237 is hereby amended to read as follows: Whenever a redevelop-
ment district is established under this act and bonds are issued by the
board of county commissioners or by the Kansas development finance
authority for any redevelopment project in the district, such redevelop-
ment project shall be regarded as a redevelopment project that was de-
termined by the secretary of commerce
and housing to be of statewide
as well as local importance for the purposes of K.S.A.
2002 Supp. 79-
3620, 79-3620b and 79-3710, and amendments thereto.
New Sec. 103. (a) On or before June 30, 2003, the department of

commerce and housing is hereby authorized and directed to adopt tem-
porary rules and regulations setting forth an objective scoring matrix for
the purpose of awarding housing tax credits.
(b) Notwithstanding the provisions of executive reorganization order
no. 30, the department of commerce is authorized and directed to adopt
in fiscal year 2004 permanent rules and regulations setting forth an ob-
jective scoring matrix for the purpose of awarding housing tax credits.
Thereafter the Kansas development finance authority is authorized to
amend or supplement any such rules and regulations.
Sec. 104. On and after July 1, 2003, K.S.A. 2-3602, 12-1770a, as
amended by section 1 of 2003 Senate Substitute for House Bill No. 2208,
12-1771b, 12-1771d, 12-1774, as amended by section 4 of 2003 Senate
Substitute for House Bill No. 2208, 12-5242, 32-873, 32-874a, 32-874b,
32-874d, 32-874e, 39-1605, 65-5721, 72-4436, 72-4437, 73-2402, 73-
2404, 74-520a, 74-567, 74-575, 74-2622, 74-2916, 74-32,151, 74-4911f,
74-5002f, 74-5002g, 74-5002h, 74-5002i, 74-5002j, 74-5002k, 74-5002n,
74-5002o, 74-5049, 74-5073, 74-5074, 74-5082, 74-5083, 74-5084, 74-
5085, 74-5086a, 74-5089, 74-5091, 74-5095, 74-5096, 74-5097, 74-50,103,
74-50,104, 74-50,105, 74-50,106, 74-50,107, 74-50,108, 74-50,109, 74-
50,110, 74-50,111, 74-50,114, 74-50,115, 74-50,131, 74-50,133, 74-
50,134, 74-50,151, 74-50,152, 74-50,153, 74-50,156, 74-50,157, 74-
50,158, 74-50,159, 74-50,160, 74-50,162, 74-50,163, 74-7295, 74-8001,
74-8002, 74-8004, 74-8005, 74-8006, 74-8007, 74-8010, 74-8101, 74-
8221, 74-8405, 74-8831, 74-8904, 74-8928, 74-8930, 74-8942, 74-8943,
74-9001, as amended by section 1 of 2003 House Bill No. 2106, 74-9002,
74-9003, 74-9004, 74-9005, 74-9201 and 79-32,198 and K.S.A. 2002 Supp.
2-1921, 40-4702, 58-1401, 58-1405, 58-1406, 58-1407, 75-2935, 79-213,
79-251, 79-3271, 79-3271a, 79-32,160a, 79-32,197a, 79-3620, as amended
by section 5 of 2003 Senate Substitute for House Bill No. 2208, 79-3620b
and 79-3710, as amended by section 8 of Senate Substitute for House
Bill No. 2208, and section 2 of 2003 Senate Substitute for House Bill No.
2208, and section 16 of 2003 Senate Bill No. 237 are hereby repealed.
Sec. 105. This act shall take effect and be in force from and after its
publication in the Kansas register.
Approved May 21, 2002.
Published in the
Kansas Register May 29, 2002.

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Date Composed: 10/29/2003 Date Modified: 10/29/2003