As Amended by House Committee
Session of 2023
HOUSE BILL No. 2302
By Committee on Water
2-6
AN ACT concerning water; relating to funding for the state water plan and
water infrastructure projects; creating the water technical assistance
fund and water projects grant fund; authorizing the Kansas water office
to provide grants from such funds and adopt rules and regulations to
establish the criteria for grants from such funds; distributing a portion
of the revenue from the sales and compensating use tax to the state
water plan fund; amending K.S.A. 82a-951 and K.S.A. 2022 Supp. 79-
3620, 79-3710, 79-4804 and 82a-953a and repealing the existing
sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) On July 1, 2023, and each July 1 thereafter
through July 1, 2028, no transfers to the state water plan fund pursuant to
K.S.A. 79-4804 and 82a-953a, and amendments thereto, shall be made if
the full amount of sales tax revenue authorized for distribution by K.S.A.
79-3620 and 79-3710, and amendments thereto, is transferred to the state
water plan fund.
(b) (1) The state water plan fund shall continue to be appropriated and
expended for the purposes prescribed in K.S.A. 82a-951, and amendments
thereto, except that:
(A) On July 1, 2023, and each July 1 thereafter through July 1, 2028,
or as soon thereafter on such dates as moneys are available:
(i) $5,000,000 shall be transferred from the state water plan fund to
the water technical assistance fund established in section 2, and
amendments thereto; and
(ii) $15,000,000 shall be transferred from the state water plan fund to
the water projects grant fund established in section 3, and amendments
thereto; and
(B) for the fiscal years ending June 30, 2024, June 30, 2025, and June
30, 2026, an amount not less than $15,000,000 from the state water plan
fund shall be applied toward the retirement of any water supply storage
debt for Milford and Perry Lake reservoirs until such debt is retired.
(2) The appropriation acts required by paragraph (1) shall only be
made if the full amount of sales tax revenue authorized for distribution by
K.S.A. 79-3620 and 79-3710, and amendments thereto, is transferred to
the state water plan fund.
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(3) The provisions of this section shall expire on July 1, 2028. On
July 1, 2028, the director of accounts and reports shall transfer all moneys
in the water technical assistance fund and the water projects grant fund to
the state water plan fund and all liabilities of the water technical assistance
fund and the water projects grant fund shall be imposed upon the state
water plan fund. On July 1, 2028, the water technical assistance fund and
the water projects grant fund shall be abolished.
(c) (1) (A) Notwithstanding any restrictions in K.S.A. 82a-951, and
amendments thereto, the Kansas water authority may recommend to the
legislature the appropriation of up to 10% of the unencumbered balance of
the state water plan fund to be used to supplement salaries of existing state
agency full-time equivalent employees and for funding new full-time
equivalent positions created to implement the state water plan. Moneys
from such appropriation may be used to supplement existing positions, but
such moneys shall not be used to replace state general fund moneys, any
fee fund moneys or other funding for positions existing on July 1, 2023.
(B) Eligible full-time equivalent positions that moneys may be used
for pursuant to this paragraph include engineers, geologists, hydrologists,
environmental scientists, attorneys, resource planners, grant specialists and
any other similar positions.
(2) If at least two conservation districts present a joint proposal to the
Kansas water authority for a position or positions to provide shared
services to all districts involved in such proposal, the Kansas water
authority may recommend that moneys be used to supplement the salary or
salaries of such position or positions pursuant to paragraph (1).
(d) All reporting requirements established in K.S.A. 82a-951, and
amendments thereto, shall continue and such reporting requirements shall
apply to the water technical assistance fund established in section 2, and
amendments thereto, and the water projects grant fund established in
section 3, and amendments thereto.
New Sec. 2. (a) (1) There is hereby established in the state treasury
the water technical assistance fund. The fund shall be administered by the
Kansas water office. Expenditures from such fund shall be used for the
purposes described in subsection (b). All expenditures shall be made in
accordance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the director
of the Kansas water office, or such director's designee.
(2) Whenever the unencumbered balance of the water technical
assistance fund exceeds $15,000,000, such excess moneys may be
recommended for appropriation by the Kansas water authority for the
same purposes as any other moneys in the state water plan fund are
appropriated.
(b) (1) The water technical assistance fund shall be used by the
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Kansas water office to provide grants to municipalities for the planning,
engineering, managing and other technical assistance that may be
necessary in the development of plans for water infrastructure projects or
for processing the grant and loan applications for such water infrastructure
projects. The Kansas water office may offer services directly, provide
funding to other organizations to provide such services at no cost to a
municipality or special district related to water or the Kansas water
office may provide grants directly to applicants to cover expenses related
to the hiring of such technical assistance.
(2) Any municipality, watershed district or conservation district or
special district related to water organized under the laws of the state of
Kansas may apply for a grant, and the Kansas water office is authorized to
award full or partial grants to such applicants. Municipalities with fewer
than 2,000 residents shall be prioritized for the awarding of full grants.
Watershed districts and, conservation districts, groundwater
management districts and all special districts related to water shall not
be prioritized for the awarding of full grants for the purposes of this
section.
(c) The Kansas water office shall adopt rules and regulations to
establish any necessary criteria for administering the water technical
assistance fund and awarding grants for technical assistance. Such criteria
shall include, but not be limited to, factors applicable to:
(1) Municipalities with greater than 2,000 residents of different
populations including the prioritization of small municipalities as
required by subsection (b)(2). Such factors may include, but not be
limited to, public health, socio-economic factors and the ability for a
municipality to repay any loans without grant assistance; and
(2) special districts such as watershed districts, conservation districts,
groundwater management districts, rural water districts and any other
similar districts formed for a special or single purpose related to water.
(d) The Kansas water authority shall encourage funding requests
from state and local entities that cooperate with qualified nonprofit
entities on projects that provide a direct benefit to water quantity and
quality, including water infrastructures that are both natural and
manmade, and include matching funds from non-state sources.
(d)(e) No single grant awarded for technical assistance pursuant to
this section shall exceed $1,000,000 unless specified by any appropriation
act of the Kansas legislature.
New Sec. 3. (a) (1) There is hereby established in the state treasury
the water projects grant fund. The fund shall be administered by the
Kansas water office. Expenditures from such fund shall be used for the
purposes described in subsection (b). All expenditures shall be made in
accordance with appropriation acts upon warrants of the director of
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accounts and reports issued pursuant to vouchers approved by the director
of the Kansas water office, or such director's designee.
(2) Whenever the unencumbered balance of the water projects grant
fund exceeds $45,000,000, such excess moneys may be recommended for
appropriation by the Kansas water authority for the same purposes as any
other moneys in the state water plan fund are appropriated.
(b) The Kansas water office may provide full or partial funding in the
form of grants to any municipality or special district related to water
established pursuant to the laws of the state of Kansas for the following:
(1) Construction, repair, maintenance or replacement of water-related
infrastructures and any related construction costs;
(2) matching moneys for grant or loan applications for water-related
infrastructure projects; and
(3) grants that may be applied to an outstanding loan balance from the
public water supply loan fund established in K.S.A. 65-163e, and
amendments thereto, or the Kansas pollution control revolving fund
established in K.S.A. 65-3322, and amendments thereto, subject to the
provisions of subsection (c).
(c) The Kansas water office shall adopt rules and regulations to
establish any necessary criteria for grants from the water projects grant
fund. Such rules and regulations shall include any necessary criteria
that may be applied to the selection of projects with outstanding loan
balances from the public water supply loan fund established in K.S.A. 65-
163e, and amendments thereto, or the Kansas pollution control revolving
fund established in K.S.A. 65-3322, and amendments thereto. Such criteria
shall be based on the following factors:
(1) The planned construction on the project with the outstanding loan
balance is complete;
(2) the municipality or special district has made at least five years of
payments on such project loans;
(3) awarding grants that provide repayment of up to:
(A) 90% of any remaining project loan balance for cities with fewer
than 2,000 residents;
(B) 75% of any remaining project loan balance for cities with fewer
than 5,000 residents;
(C) 50% of any remaining project loan balance for cities with fewer
than 10,000 residents; and
(D) 25% of any remaining project loan balance for all other cities in
Kansas; and
(4) any other relevant criteria including, but not limited to, the socio-
economic status of the residents of any municipality, public health and the
ability of any municipality to repay a loan without further assistance.
(d) No single grant awarded for a project pursuant to this section shall
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be greater than $8,000,000 unless specified by any appropriation act of the
Kansas legislature.
(e) The Kansas water office and the department of health and
environment shall coordinate the sharing of information regarding
applicants for loans from the public water supply loan fund
established in K.S.A. 65-163e, and amendments thereto, and the
Kansas pollution control revolving fund established in K.S.A. 65-3322,
and amendments thereto, and shall take into consideration the
approval or likely approval of a grant by the Kansas water office when
considering the eligibility of any municipality to receive moneys from
such funds.
Sec. 4. K.S.A. 2022 Supp. 79-3620 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
subsections (c), (d) and (e), 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. 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. 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 transfer 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) On January 1, 2023, the state treasurer shall credit 17% of the
revenue collected and received from the tax imposed by K.S.A. 79-3603,
and amendments thereto, at the rates provided in K.S.A. 79-3603, and
amendments thereto, and K.S.A. 2022 Supp. 79-3603d, and amendments
thereto, and deposited as provided by subsection (a), exclusive of amounts
credited pursuant to subsection (d), in the state highway fund.
(2) On January 1, 2025, and thereafter, the state treasurer shall credit
18% of the revenue collected and received from the tax imposed by K.S.A.
79-3603, and amendments thereto, at the rates provided in K.S.A. 79-
3603, and amendments thereto, and K.S.A. 2022 Supp. 79-3603d, and
amendments thereto, and deposited as provided by subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
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highway fund.
(3) On and after July 1, 2023, and prior to July 1, 2028, the state
treasurer shall credit 1.231% of the revenue collected and received from
the tax imposed by K.S.A. 79-3603, and amendments thereto, at the rates
provided in K.S.A. 79-3603, and amendments thereto, and K.S.A. 2022
Supp. 79-3603d, and amendments thereto, and deposited as provided by
subsection (a), exclusive of amounts credited pursuant to subsection (d), in
the state water plan 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 portion
of a STAR bond project district occupied by a STAR bond project or
taxpayers doing business with such entity financed by a STAR bond
project as defined in K.S.A. 12-17,162, and amendments thereto, that was
determined by the secretary of commerce 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 STAR bond project as defined in K.S.A. 12-
17,162, 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 K.S.A. 79-3710(d), 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
STAR bond project.
(e) All revenue certified by the director of taxation as having been
collected or received from the tax imposed by K.S.A. 79-3603(c), and
amendments thereto, on the sale or furnishing of gas, water, electricity and
heat for use or consumption within the intermodal facility district
described in this subsection, shall be credited by the state treasurer to the
state highway fund. Such revenue may be transferred by the secretary of
transportation to the rail service improvement fund pursuant to law. The
provisions of this subsection shall take effect upon certification by the
secretary of transportation that a notice to proceed has been received for
the construction of the improvements within the intermodal facility
district, but not later than December 31, 2010, and shall expire when the
secretary of revenue determines that the total of all amounts credited
hereunder and pursuant to K.S.A. 79-3710(e), and amendments thereto, is
equal to $53,300,000, but not later than December 31, 2045. Thereafter, all
revenues shall be collected and distributed in accordance with applicable
law. For all tax reporting periods during which the provisions of this
subsection are in effect, none of the exemptions contained in K.S.A. 79-
3601 et seq., and amendments thereto, shall apply to the sale or furnishing
of any gas, water, electricity and heat for use or consumption within the
intermodal facility district. As used in this subsection, "intermodal facility
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district" shall consist of an intermodal transportation area as defined by
K.S.A. 12-1770a(oo), and amendments thereto, located in Johnson county
within the polygonal-shaped area having Waverly Road as the eastern
boundary, 191
st
Street as the southern boundary, Four Corners Road as the
western boundary, and Highway 56 as the northern boundary, and the
polygonal-shaped area having Poplar Road as the eastern boundary, 183
rd
Street as the southern boundary, Waverly Road as the western boundary,
and the BNSF mainline track as the northern boundary, that includes
capital investment in an amount exceeding $150 million for the
construction of an intermodal facility to handle the transfer, storage and
distribution of freight through railway and trucking operations.
Sec. 5. K.S.A. 2022 Supp. 79-3710 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 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 set apart as
provided in subsection (b) and amounts credited as provided in subsection
(c), (d) and (e), 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) On January 1, 2023, the state treasurer shall credit 17% of the
revenue collected and received from the tax imposed by K.S.A. 79-3703,
and amendments thereto, at the rates provided in K.S.A. 79-3703, and
amendments thereto, and K.S.A. 2022 Supp. 79-3603d, and amendments
thereto, and deposited as provided by subsection (a), exclusive of amounts
credited pursuant to subsection (d), in the state highway fund.
(2) On January 1, 2025, and thereafter, the state treasurer shall credit
18% of the revenue collected and received from the tax imposed by K.S.A.
79-3703, and amendments thereto, at the rates provided in K.S.A. 79-
3703, and amendments thereto, and K.S.A. 2022 Supp. 79-3603d, and
amendments thereto, and deposited as provided by subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.
(3) On and after July 1, 2023, and prior to July 1, 2028, the state
treasurer shall credit 1.231% of the revenue collected and received from
the tax imposed by K.S.A. 79-3703, and amendments thereto, at the rates
provided in K.S.A. 79-3703, and amendments thereto, and K.S.A. 2022
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Supp. 79-3603d, and amendments thereto, and deposited as provided by
subsection (a), exclusive of amounts credited pursuant to subsection (d), in
the state water plan 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 portion
of a redevelopment district occupied by a redevelopment project that was
determined by the secretary of commerce to be of statewide 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 K.S.A. 79-3620(d), and amendments thereto. The
provisions of this subsection shall expire when the total of all amounts
credited hereunder and under K.S.A. 79-3620(d), 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 K.S.A. 12-1770a(z), and amendments thereto.
(e) All revenue certified by the director of taxation as having been
collected or received from the tax imposed by K.S.A. 79-3603(c), and
amendments thereto, on the sale or furnishing of gas, water, electricity and
heat for use or consumption within the intermodal facility district
described in this subsection, shall be credited by the state treasurer to the
state highway fund. Such revenue may be transferred by the secretary of
transportation to the rail service improvement fund pursuant to law. The
provisions of this subsection shall take effect upon certification by the
secretary of transportation that a notice to proceed has been received for
the construction of the improvements within the intermodal facility
district, but not later than December 31, 2010, and shall expire when the
secretary of revenue determines that the total of all amounts credited
hereunder and pursuant to K.S.A. 79-3620(e), and amendments thereto, is
equal to $53,300,000, but not later than December 31, 2045. Thereafter, all
revenues shall be collected and distributed in accordance with applicable
law. For all tax reporting periods during which the provisions of this
subsection are in effect, none of the exemptions contained in K.S.A. 79-
3601 et seq., and amendments thereto, shall apply to the sale or furnishing
of any gas, water, electricity and heat for use or consumption within the
intermodal facility district. As used in this subsection, "intermodal facility
district" shall consist of an intermodal transportation area as defined by
K.S.A. 12-1770a(oo), and amendments thereto, located in Johnson county
within the polygonal-shaped area having Waverly Road as the eastern
boundary, 191
st
Street as the southern boundary, Four Corners Road as the
western boundary, and Highway 56 as the northern boundary, and the
polygonal-shaped area having Poplar Road as the eastern boundary, 183
rd
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Street as the southern boundary, Waverly Road as the western boundary,
and the BNSF mainline track as the northern boundary, that includes
capital investment in an amount exceeding $150 million for the
construction of an intermodal facility to handle the transfer, storage and
distribution of freight through railway and trucking operations.
Sec. 6. K.S.A. 2022 Supp. 79-4804 is hereby amended to read as
follows: 79-4804. (a) After the transfer of moneys pursuant to K.S.A. 79-
4806, and amendments thereto, an amount equal to 85% of the balance of
all moneys credited to the state gaming revenues fund shall be transferred
and credited to the state economic development initiatives fund.
Expenditures from the state economic development initiatives fund shall
be made in accordance with appropriations acts for the financing of such
programs supporting and enhancing the existing economic foundation of
the state and fostering growth through the expansion of current, and the
establishment and attraction of new, commercial and industrial enterprises
as provided by this section and as may be authorized by law and not less
than
1
/2 of such money shall be distributed equally among the
congressional districts of the state. Except as provided by subsection (g),
all moneys credited to the state economic development initiatives fund
shall be credited within the fund, as provided by law, to an account or
accounts of the fund, which are created by this section or for state fiscal
years 2022, 2023 and 2024, to an account or accounts of the fund created
by appropriation acts.
(b) There is hereby created the Kansas capital formation account in
the state economic development initiatives fund. All moneys credited to
the Kansas capital formation account shall be used to provide, encourage
and implement capital development and formation in Kansas.
(c) There is hereby created the Kansas economic development
research and development account in the state economic development
initiatives fund. All moneys credited to the Kansas economic development
research and development account shall be used to promote, encourage
and implement research and development programs and activities in
Kansas and technical assistance funded through state educational
institutions under the supervision and control of the state board of regents
or other Kansas colleges and universities.
(d) There is hereby created the Kansas economic development
endowment account in the state economic development initiatives fund.
All moneys credited to the Kansas economic development endowment
account shall be accumulated and invested as provided in this section to
provide an ongoing source of funds, which shall be used for economic
development activities in Kansas, including, but not limited to, continuing
appropriations or demand transfers for programs and projects, which shall
include, but are not limited to, specific community infrastructure projects
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in Kansas that stimulate economic growth.
(e) Except as provided in subsection (f), the director of investments
may invest and reinvest moneys credited to the state economic
development initiatives fund in accordance with investment policies
established by the pooled money investment board under K.S.A. 75-4232,
and amendments thereto, in the pooled money investment portfolio. All
moneys received as interest earned by the investment of the moneys
credited to the state economic development initiatives fund shall be
deposited in the state treasury and credited to the Kansas economic
development endowment account of such fund.
(f) Moneys credited to the Kansas economic development
endowment account of the state economic development initiatives fund
may be invested in government guaranteed loans and debentures as
provided by law in addition to the investments authorized by subsection
(e) or in lieu of such investments. All moneys received as interest earned
by the investment under this subsection of the moneys credited to the
Kansas economic development endowment account shall be deposited in
the state treasury and credited to the Kansas economic development
endowment account of the state economic development initiatives fund.
(g) Except as provided further and in section 1, and amendments
thereto, in each fiscal year, the director of accounts and reports shall make
transfers in equal amounts on July 15 and January 15 that in the aggregate
equal $2,000,000 from the state economic development initiatives fund to
the state water plan fund created by K.S.A. 82a-951, and amendments
thereto. In state fiscal year 2022, the director of accounts and reports shall
make transfers in equal amounts on July 15 and January 15 that in the
aggregate equal $1,719,264 from the state economic development
initiatives fund to the state water plan fund. No other moneys credited to
the state economic development initiatives fund shall be used for: (1)
Water-related projects or programs, or related technical assistance; or (2)
any other projects or programs, or related technical assistance that meet
one or more of the long-range goals, objectives and considerations set
forth in the state water resource planning act.
Sec. 7. K.S.A. 82a-951 is hereby amended to read as follows: 82a-
951. (a) On and after July 1, 1989, there is hereby created, in the state
treasury, the state water plan fund. All moneys in the state water plan fund
shall be expended in accordance with appropriations acts for
implementation of the state water plan formulated pursuant to K.S.A. 82a-
903 et seq. and amendments thereto. Except as provided in section 1, and
amendments thereto, such moneys shall be used only for the establishment
and implementation of water-related projects or programs, and related
technical assistance, and shall not be used for: (1) Replacing full time
equivalent positions of any state agency; or (2) recreational projects which
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do not meet one or more of the long-range goals, objectives and
considerations set forth in the state water resource planning act.
(b) On or before December 1 of each year, the Kansas water authority
shall submit to the governor and the legislature a report setting out: (1) An
account of all moneys expended from the state water plan fund, the water
technical assistance fund and the water projects grant fund during each
such fiscal year; and (2) a five-year capital development plan for state
water plan projects.
Sec. 8. K.S.A. 2022 Supp. 82a-953a is hereby amended to read as
follows: 82a-953a. Subject to the provisions of section 1, and amendments
thereto, during each fiscal year, the director of accounts and reports shall
transfer $6,000,000 from the state general fund to the state water plan fund
created by K.S.A. 82a-951, and amendments thereto,
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/2 of such amount to
be transferred on July 15 and
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/2 to be transferred on January 15. During
the fiscal year ending June 30, 2022, the transfer shall not exceed
$4,005,632.
Sec. 9. K.S.A. 82a-951 and K.S.A. 2022 Supp. 79-3620, 79-3710, 79-
4804 and 82a-953a are hereby repealed.
Sec. 10. This act shall take effect and be in force from and after its
publication in the statute book.
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