Kansas 2023-2024 Regular Session

Kansas Senate Bill SB91 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	Session of 2023
2	2	SENATE BILL No. 91
3	3	By Committee on Commerce
4	4	1-24
5	5	AN ACT concerning economic development; enacting the Kansas film and
6	6	digital media production development act; establishing an income tax
7	7	credit, sales tax exemption and loan and grant program to be
8	8	administered by the secretary of commerce for the purpose of
9	9	developing film, video or digital production in Kansas; establishing the
10	10	Kansas film and digital media production development act education
11	11	fund and the Kansas film and digital media production development act
12	12	workforce training and business direct investment fund; amending
13	13	K.S.A. 2022 Supp. 79-3606 and repealing the existing section.
14	14	Be it enacted by the Legislature of the State of Kansas:
15	15	New Section 1. Sections 1 through 8, and amendments thereto, shall
16	16	be known and may be cited as the Kansas film and digital media
17	17	production development act. The purpose of the Kansas film and digital
18	18	media production development act is to incentivize film, video or digital
19	19	media productions in Kansas and facilitate the development and growth of
20	20	a film, video or digital media production industry and associated
21	21	businesses supporting the industry in this state.
22	22	New Sec. 2. As used in this act:
23	23	(a) "Above-the-line personnel" means any individual hired or credited
24	24	on screen for an eligible production for work on the production or
25	25	postproduction of film as a:
26	26	(1) Principal cast member compensated for the eligible production
27	27	project at a screen actors guild schedule f or above payment rate; or
28	28	(2) producer, screenwriter or director.
29	29	(b) "Act" means the Kansas film and digital media production
30	30	development act.
31	31	(c) "Affiliates" means those entities that are included in the
32	32	production company's affiliated group as defined in section 1504(a) of the
33	33	internal revenue code, 26 U.S.C. § 1504(a), and all other entities that are
34	34	50% or more owned, directly or indirectly, by members of the affiliated
35	35	group.
36	36	(d) "Based in Kansas" or "Kansas-based" means, in reference to a
37	37	vendor, production company or company, that the vendor, production
38	38	company or company is subject to income tax liability under the Kansas
39	39	income tax act and has a physical presence in Kansas and, with respect to a
40	40	1
41	41	2
42	42	3
43	43	4
44	44	5
45	45	6
46	46	7
47	47	8
48	48	9
49	49	10
50	50	11
51	51	12
52	52	13
53	53	14
54	54	15
55	55	16
56	56	17
57	57	18
58	58	19
59	59	20
60	60	21
61	61	22
62	62	23
63	63	24
64	64	25
65	65	26
66	66	27
67	67	28
68	68	29
69	69	30
70	70	31
71	71	32
72	72	33
73	73	34
74	74	35
75	75	36 SB 91 2
76	76	production company, has maintained a physical presence in Kansas for at
77	77	least six months prior to submitting an application to the secretary
78	78	pursuant to section 3, and amendments thereto.
79	79	(e) "Certified production" or "certified project" means an eligible
80	80	production that has agreed to one or more qualified Kansas promotions
81	81	and that has been approved by the secretary of commerce as eligible for
82	82	tax incentives pursuant to the provisions of section 3, and amendments
83	83	thereto.
84	84	(f) "Crew" means any individual who works on production or
85	85	postproduction for an eligible production. "Crew" does not include above-
86	86	the-line personnel.
87	87	(g) (1) "Eligible production" or "eligible project" means a production:
88	88	(A) (i) Of a new film, video or digital project, or a portion or portions
89	89	of such project, produced in this state, including a feature film,
90	90	documentary, series, pilot, movie for television, televised commercial
91	91	advertisement, music video, video game, content-based mobile application
92	92	or a virtual reality, augmented reality, multi-media or new media project;
93	93	(ii) produced in whole or in part, in short or in long form, and may
94	94	include animation, music and green screen, motion capture and similar
95	95	production techniques;
96	96	(iii) fixed on a delivery system including, but not limited to, film
97	97	format or reels, videotape, computer drive or disc, laser disc or any
98	98	element of the digital domain, from which the program or completed
99	99	project is viewed or reproduced; and
100	100	(iv) intended for multimarket commercial distribution via theaters,
101	101	video on demand, direct to DVD, streaming, digital platforms or electronic
102	102	delivery systems designed for the distribution or playing of interactive
103	103	games, licensing for exhibition by individual television stations, groups of
104	104	stations, networks, advertiser-supported sites, cable television stations,
105	105	streaming companies or public broadcasting stations; and
106	106	(B) that incurs or is reasonably anticipated to incur qualified
107	107	production or postproduction expenses of at least $50,000, as determined
108	108	by the secretary.
109	109	(2) "Eligible production" or "eligible project" does not include:
110	110	(A) The coverage of news or athletic events, local advertising, local
111	111	interest programming, instructional videos, corporate videos, any project
112	112	that is not intended for multimarket commercial distribution or any portion
113	113	of a project not shot, recorded or created in Kansas; and
114	114	(B) any production of obscene material or an obscene performance as
115	115	defined in K.S.A. 2022 Supp. 21-6401, and amendments thereto.
116	116	(3) For purposes of the income tax credit as allowed under section
117	117	4(f), and amendments thereto, "eligible production" or "eligible project"
118	118	means the same as defined in paragraphs (1) and (2), except that a
119	119	1
120	120	2
121	121	3
122	122	4
123	123	5
124	124	6
125	125	7
126	126	8
127	127	9
128	128	10
129	129	11
130	130	12
131	131	13
132	132	14
133	133	15
134	134	16
135	135	17
136	136	18
137	137	19
138	138	20
139	139	21
140	140	22
141	141	23
142	142	24
143	143	25
144	144	26
145	145	27
146	146	28
147	147	29
148	148	30
149	149	31
150	150	32
151	151	33
152	152	34
153	153	35
154	154	36
155	155	37
156	156	38
157	157	39
158	158	40
159	159	41
160	160	42
161	161	43 SB 91 3
162	162	production not intended for multimarket commercial distribution may be
163	163	included and the amount of eligible expenses required shall be at least
164	164	$25,000.
165	165	(h) "Eligible television series" means a certified series television
166	166	production project intended for multimarket commercial distribution, with
167	167	an order for multiple episodes in a single season, not less than 25% of the
168	168	series season is filmed within Kansas and the production incurs qualifying
169	169	eligible expenses of more than $50,000.
170	170	(i) "Eligible wages and salaries" means:
171	171	(1) (A) Wages or salaries paid by the production company to crew for
172	172	work in Kansas designated as for production or for postproduction of an
173	173	eligible production;
174	174	(B) for which the production company is required to remit
175	175	withholding payments to the department of revenue under the Kansas
176	176	withholding and declaration of estimated tax act; and
177	177	(C) at least 10% of the crew are residents of this state. The secretary
178	178	and the Kansas arts industry director may agree upon a higher percentage
179	179	requirement; and
180	180	(2) the amounts of wages, salaries or payments paid to above-the-line
181	181	personnel, except that the eligible amount of such wages, salaries or
182	182	payments shall not comprise more than 25% of qualified production
183	183	expenditures as defined in subsection (s).
184	184	(j) "Film" means a professional single media, multimedia, video or
185	185	audiovisual program or feature, that may be digital, that is not obscene
186	186	material or an obscene performance as defined in K.S.A. 2022 Supp. 21-
187	187	6401, and amendments thereto. "Film" includes, but is not limited to, film
188	188	produced for an interactive game or a documentary, special, music video,
189	189	television commercial or television program, or a portion thereof, that is
190	190	filmed or taped for cable, television, streaming network, national or
191	191	regional syndication or for a feature-length motion picture intended for
192	192	theatrical release or for network, streaming, national or regional
193	193	syndication or broadcast.
194	194	(k) "High-impact production" means a certified production for which
195	195	production or postproduction expenditures are at least $50,000,000, and at
196	196	least
197	197	1
198	198	/3 of such total expenditures constitute qualified expenditures
199	199	approved by the secretary of commerce.
200	200	(l) "Kansas film media industry development expenditure" means
201	201	documented financial, promotional or in-kind contributions or educational
202	202	or workforce development efforts, at standard rates set by the secretary of
203	203	commerce in consultation with the Kansas creative arts industries
204	204	commission, in partnership with related Kansas industry labor
205	205	organizations or educational institutions, toward the furtherance of the
206	206	Kansas film or digital media industry. Promotional efforts include, but are
207	207	1
208	208	2
209	209	3
210	210	4
211	211	5
212	212	6
213	213	7
214	214	8
215	215	9
216	216	10
217	217	11
218	218	12
219	219	13
220	220	14
221	221	15
222	222	16
223	223	17
224	224	18
225	225	19
226	226	20
227	227	21
228	228	22
229	229	23
230	230	24
231	231	25
232	232	26
233	233	27
234	234	28
235	235	29
236	236	30
237	237	31
238	238	32
239	239	33
240	240	34
241	241	35
242	242	36
243	243	37
244	244	38
245	245	39
246	246	40
247	247	41
248	248	42
249	249	43 SB 91 4
250	250	not limited to, the promotion of the Kansas industry by directors, actors or
251	251	producers affiliated with the production company's project through social
252	252	media that is managed by the state, radio or television interviews
253	253	facilitated by the department of commerce, enhanced screen credit
254	254	acknowledgments or related events that are facilitated, conducted or
255	255	sponsored by the secretary of commerce or the Kansas creative arts
256	256	industries commission.
257	257	(m) "Multi-film deal" means a certified project in which a production
258	258	company films at least 75% of main crew principal photography for three
259	259	or more films in this state within five years.
260	260	(n) "Nonresident crew member" means an individual who is not a
261	261	Kansas resident and is hired for work on a an eligible production project
262	262	within this state.
263	263	(o) "Production company" means a person, producer or company that
264	264	produces film for, including, but not limited to, exhibition in theaters,
265	265	television, interactive games, cable, syndication or streaming networks.
266	266	"Production company" includes affiliates of a production company when
267	267	approved by the secretary and identified in the agreement executed
268	268	pursuant to section 3, and amendments thereto.
269	269	(p) (1) "Postproduction expenditures" means expenditures made in
270	270	Kansas directly for postproduction activities in Kansas for an eligible
271	271	production by a production company and includes, but are not limited to,
272	272	the following categories:
273	273	(A) Eligible wages or salaries of above-the-line personnel or crew
274	274	designated as postproduction;
275	275	(B) sound synchronization, recording or mixing;
276	276	(C) color grading;
277	277	(D) editing and related services;
278	278	(E) visual effects or special effects;
279	279	(F) computer graphics, special effects or animation services;
280	280	(G) film processing or format transfers;
281	281	(H) music production, recording, mixing or composition;
282	282	(I) licensing of music produced in this state or created by a Kansas
283	283	resident;
284	284	(J) rental of facilities or equipment;
285	285	(K) leasing of vehicles, including leasing of airplanes, for
286	286	postproduction-related transportation and costs of food and lodging; and
287	287	(L) other direct postproduction costs of an eligible production in
288	288	accordance with generally accepted entertainment industry practices.
289	289	(2) "Postproduction expenditures" does not include:
290	290	(A) Goods, equipment or vehicles not purchased, rented or leased in
291	291	Kansas from a Kansas-based vendor and when not used in Kansas;
292	292	(B) any expenditures for activities, work or services not conducted in
293	293	1
294	294	2
295	295	3
296	296	4
297	297	5
298	298	6
299	299	7
300	300	8
301	301	9
302	302	10
303	303	11
304	304	12
305	305	13
306	306	14
307	307	15
308	308	16
309	309	17
310	310	18
311	311	19
312	312	20
313	313	21
314	314	22
315	315	23
316	316	24
317	317	25
318	318	26
319	319	27
320	320	28
321	321	29
322	322	30
323	323	31
324	324	32
325	325	33
326	326	34
327	327	35
328	328	36
329	329	37
330	330	38
331	331	39
332	332	40
333	333	41
334	334	42
335	335	43 SB 91 5
336	336	Kansas and not performed by a Kansas-based vendor. A vendor that acts as
337	337	a conduit to enable purchases, rentals or leases to qualify as "production
338	338	expenditures" that would not otherwise qualify shall not be considered a
339	339	Kansas-based vendor with respect to such purchases, rentals or leases; or
340	340	(C) costs for footage shot outside this state, marketing, story rights or
341	341	distribution.
342	342	(q) (1) "Production expenditures" means expenditures made in
343	343	Kansas directly related to or used for production activities in this state for
344	344	an eligible production by a production company, including, but not limited
345	345	to, the following categories:
346	346	(A) Eligible wages or salaries of above-the-line personnel or crew
347	347	designated as production;
348	348	(B) set construction, maintenance, repair or modification, set
349	349	furnishings and operations, wardrobe, make-up, materials used to construct
350	350	costumes, props or scenery, accessories and related services;
351	351	(C) scripts, musical scores or storyboards and drafting and design
352	352	supplies;
353	353	(D) photography, sound synchronization, lighting and related
354	354	services;
355	355	(E) editing and related services;
356	356	(F) rental of buildings, facilities or equipment and leasing of vehicles,
357	357	including, but not limited to, leasing of airplanes;
358	358	(G) transportation costs, including, but not limited to, leasing of
359	359	vehicles or airplanes, directly related to production activities in Kansas;
360	360	(H) food and lodging;
361	361	(I) sound recording or mixing services;
362	362	(J) computer graphics, special effects and animation services;
363	363	(K) film processing or format transfers;
364	364	(L) airfare if purchased through a Kansas travel agency;
365	365	(M) insurance costs and bonding if purchased through a Kansas
366	366	insurance agency; and
367	367	(N) other direct costs of producing film in accordance with generally
368	368	accepted entertainment industry practices.
369	369	(2) "Production expenditures" does not include:
370	370	(A) Goods, equipment or vehicles not purchased, rented or leased in
371	371	Kansas from a Kansas-based vendor;
372	372	(B) any expenditures for activities, work or services not conducted in
373	373	Kansas and services not performed at the filming site unless the vendor is
374	374	a Kansas-based vendor; and
375	375	(C) postproduction expenditures as defined in subsection (p) when
376	376	used for postproduction activities.
377	377	(r) "Qualified postproduction expenditures" means the funds actually
378	378	invested and expended by a production company that are postproduction
379	379	1
380	380	2
381	381	3
382	382	4
383	383	5
384	384	6
385	385	7
386	386	8
387	387	9
388	388	10
389	389	11
390	390	12
391	391	13
392	392	14
393	393	15
394	394	16
395	395	17
396	396	18
397	397	19
398	398	20
399	399	21
400	400	22
401	401	23
402	402	24
403	403	25
404	404	26
405	405	27
406	406	28
407	407	29
408	408	30
409	409	31
410	410	32
411	411	33
412	412	34
413	413	35
414	414	36
415	415	37
416	416	38
417	417	39
418	418	40
419	419	41
420	420	42
421	421	43 SB 91 6
422	422	expenditures made in this state and that are directly used in a certified
423	423	production, including, but not limited to, any Kansas film media industry
424	424	development expenditures, and approved by the secretary of commerce.
425	425	"Qualified postproduction expenditures" shall not exceed the usual and
426	426	customary cost of the goods or services acquired. The secretary of
427	427	commerce or the secretary of revenue may determine the value of the
428	428	goods or services for purposes of this section when the buyer and seller are
429	429	affiliates, or the sale or purchase is not an arm's length transaction.
430	430	"Qualified postproduction expenditures" does not include postproduction
431	431	expenditures for which another taxpayer claims the production tax credit
432	432	pursuant to section 4, and amendments thereto.
433	433	(s) "Qualified production expenditures" means the funds actually
434	434	invested and expended by a production company that are production
435	435	expenditures made in this state and directly used in a certified production,
436	436	including any Kansas film media industry development expenditures, and
437	437	approved by the secretary of commerce. "Qualified production
438	438	expenditures" shall not exceed the usual and customary cost of the goods
439	439	or services acquired. The secretary of commerce or the secretary of
440	440	revenue may determine the value of the goods or services for purposes of
441	441	this act when the buyer and seller are affiliates, or the sale or purchase is
442	442	not an arm's length transaction. "Qualified production expenditures" does
443	443	not include production expenditures for which another taxpayer claims the
444	444	production tax credit pursuant to section 4, and amendments thereto.
445	445	"Qualified production expenditures" does not include wages, salaries or
446	446	payment paid to above-the-line personnel that constitute more than 25% of
447	447	total production expenditures.
448	448	(t) "Qualified Kansas promotion" means a promotion of this state,
449	449	approved by the secretary as to content, distribution, duration and
450	450	placement within a production, video or interactive game or in associated
451	451	online or other promotions, that consists of a static or animated logo that
452	452	promotes Kansas, an embedded Kansas promotion or a Kansas
453	453	advertisement and that may include a link to a Kansas website.
454	454	(u) "Secretary" means the secretary of commerce.
455	455	(v) "Vendor" means a business that sells or leases goods or services
456	456	that are related to standard production industry inventory or services.
457	457	"Vendor" does not include a personal services business.
458	458	New Sec. 3. (a) There is hereby created the Kansas film and digital
459	459	media industry development program. The purpose of the Kansas film and
460	460	digital media industry development program is to:
461	461	(1) Provide tax incentives, including, but not limited to, an income
462	462	tax credit and a sales tax exemption, for eligible projects produced in
463	463	Kansas by production companies that meet the requirements of this act and
464	464	are approved as certified projects by the secretary of commerce; and
465	465	1
466	466	2
467	467	3
468	468	4
469	469	5
470	470	6
471	471	7
472	472	8
473	473	9
474	474	10
475	475	11
476	476	12
477	477	13
478	478	14
479	479	15
480	480	16
481	481	17
482	482	18
483	483	19
484	484	20
485	485	21
486	486	22
487	487	23
488	488	24
489	489	25
490	490	26
491	491	27
492	492	28
493	493	29
494	494	30
495	495	31
496	496	32
497	497	33
498	498	34
499	499	35
500	500	36
501	501	37
502	502	38
503	503	39
504	504	40
505	505	41
506	506	42
507	507	43 SB 91 7
508	508	(2) provide tax incentives, support programs or services, including,
509	509	but not limited to, professional development, infrastructure investments
510	510	and marketing efforts to develop film and digital media industry-related
511	511	Kansas businesses.
512	512	(b) The program shall be administered by the secretary with the
513	513	assistance of the Kansas creative arts industries commission. The secretary
514	514	shall consult with the Kansas creative arts industries commission in
515	515	administering this act to ensure the best possible use of Kansas resources
516	516	for promoting and developing film and digital media production and
517	517	related industry in Kansas. In determining whether to approve a project as
518	518	a certified project, the secretary shall consider the immediate impact and
519	519	potential future impact of the project on the development and growth of
520	520	the Kansas film, video and digital media production industry. The
521	521	secretary may limit, by category, specified eligible expenditures or total
522	522	amounts of eligible production or postproduction expenditures that may be
523	523	approved by the secretary as qualified production or postproduction
524	524	expenditures. The aggregate total amount of income tax credits under this
525	525	act shall not exceed $10,000,000 in a tax year. The secretary shall
526	526	designate 10% of such total aggregate amount in each tax year for tax
527	527	credits for Kansas-based production companies to fulfill the purpose of
528	528	this act as described in subsection (a)(2).
529	529	(c) To be eligible for an income tax credit or a sales tax exemption
530	530	under this act, a production company shall, prior to the commencement of
531	531	the project or of principal photography, submit the following to the
532	532	secretary of commerce in the form and manner and with such
533	533	documentation and other information as required by the secretary:
534	534	(1) An application for approval of the production as an eligible
535	535	production and for designation as a certified production;
536	536	(2) evidence of adequate financing for the project;
537	537	(3) evidence of a certificate of general liability insurance with a
538	538	minimum coverage of $1,000,000, or a greater amount if required by the
539	539	secretary, and workers compensation coverage in compliance with Kansas
540	540	law that shall include coverage of employer liability;
541	541	(4) a description of the project, timelines and anticipated completion
542	542	dates, anticipated eligible expenditures and project activities to be
543	543	conducted in Kansas, anticipated employment of crew or above-the-line
544	544	personnel who are Kansas residents or use of Kansas-based vendors and
545	545	any anticipated construction or contribution of production infrastructure or
546	546	participation in Kansas film and digital media industry development
547	547	activities; and
548	548	(5) an economic impact statement showing the economic impact from
549	549	the activities of the project. Such economic impact statement shall indicate
550	550	the impact on the region of the state in which the project production or
551	551	1
552	552	2
553	553	3
554	554	4
555	555	5
556	556	6
557	557	7
558	558	8
559	559	9
560	560	10
561	561	11
562	562	12
563	563	13
564	564	14
565	565	15
566	566	16
567	567	17
568	568	18
569	569	19
570	570	20
571	571	21
572	572	22
573	573	23
574	574	24
575	575	25
576	576	26
577	577	27
578	578	28
579	579	29
580	580	30
581	581	31
582	582	32
583	583	33
584	584	34
585	585	35
586	586	36
587	587	37
588	588	38
589	589	39
590	590	40
591	591	41
592	592	42
593	593	43 SB 91 8
594	594	production-related activities are conducted and any impact on the state as a
595	595	whole. The secretary may consider the size of the project when
596	596	determining the scope and information required.
597	597	(d) (1) If the secretary determines that the project is an eligible
598	598	project and approves the application, the production company shall enter
599	599	into an agreement with the secretary prior to the commencement of the
600	600	project on such terms and conditions as the secretary may require. Such
601	601	terms and conditions shall include, but not be limited to, qualified Kansas
602	602	promotions to be provided and any limitations the secretary may impose
603	603	on the amounts of eligible production or postproduction expenditures that
604	604	may be approved by the secretary as qualified expenditures, whether in
605	605	total or for specified eligible expenditures or specified eligible expenditure
606	606	categories.
607	607	(2) The production company shall agree to the provision of
608	608	documentation and information to the secretary or the secretary of revenue
609	609	on a regular basis as requested by the secretary or secretary of revenue to
610	610	determine qualified expenditures and compliance with the requirements of
611	611	this act and rules and regulations adopted by the secretary or the secretary
612	612	of revenue pursuant to this act. The production company shall agree to the
613	613	provision of information to the secretary on a regular basis as requested by
614	614	the secretary regarding the progress of the project and estimated
615	615	completion date.
616	616	(3) The terms and conditions shall include provisions for repayment
617	617	of income tax credits or sales tax exempted if requirements of this act or
618	618	rules and regulations are not met, provisions requiring cooperation with
619	619	any audit conducted pursuant to this act and provisions for submission of
620	620	information as required for publication on the Kansas economic incentive
621	621	database and for the secretary's reports to the legislature as provided by
622	622	section 5, and amendments thereto.
623	623	(4) The terms and conditions may also include agreements by the
624	624	production company for the facilitation of, coordination with or provision
625	625	of support services for Kansas businesses and organizations to enable
626	626	participation in the project or the development of the Kansas film and
627	627	digital media industry.
628	628	(5) If the secretary approves the agreement with the production
629	629	company, the secretary shall authorize the eligible project as a certified
630	630	project.
631	631	(e) Upon approval by the secretary as an eligible and certified project
632	632	and the execution of the agreement as provided in subsection (d), the
633	633	secretary may approve an application by the production company for a
634	634	sales tax exemption for production or postproduction expenditures
635	635	pursuant to the provisions of K.S.A. 79-3606(pppp), and amendments
636	636	thereto, and shall notify the applicant and the secretary of revenue of such
637	637	1
638	638	2
639	639	3
640	640	4
641	641	5
642	642	6
643	643	7
644	644	8
645	645	9
646	646	10
647	647	11
648	648	12
649	649	13
650	650	14
651	651	15
652	652	16
653	653	17
654	654	18
655	655	19
656	656	20
657	657	21
658	658	22
659	659	23
660	660	24
661	661	25
662	662	26
663	663	27
664	664	28
665	665	29
666	666	30
667	667	31
668	668	32
669	669	33
670	670	34
671	671	35
672	672	36
673	673	37
674	674	38
675	675	39
676	676	40
677	677	41
678	678	42
679	679	43 SB 91 9
680	680	approval. In considering approval of such sales tax exemption, the
681	681	secretary shall prioritize expenditures in rural areas or in economically
682	682	depressed urban areas to the extent feasible. The secretary may require that
683	683	all or a portion of expenditures eligible for exemption from sales tax be
684	684	made with businesses located in such areas, as determined by the secretary.
685	685	A production company receiving a sales tax exemption shall provide the
686	686	secretary or the secretary of revenue with such documentation as requested
687	687	by the secretary or the secretary of revenue to demonstrate that
688	688	expenditures have been made as required.
689	689	(f) Prior to receipt by a production company of any income tax credit
690	690	authorized by section 4, and amendments thereto, the secretary shall
691	691	examine and determine, in the sole discretion of the secretary, the amount
692	692	of eligible production or eligible postproduction expenditures that are
693	693	qualified production expenditures or qualified postproduction expenditures
694	694	of the production company and that such expenditures are for a certified
695	695	production. No expenditure that was exempt from sales taxation pursuant
696	696	to K.S.A. 79-3606(pppp), and amendments thereto, shall also be a basis
697	697	for the income tax credit pursuant to section 4, and amendments thereto,
698	698	unless specifically approved by the secretary. The production company
699	699	shall provide such information and documentation as requested by the
700	700	secretary to make such determination. In addition, the production company
701	701	shall provide evidence as required by the secretary that:
702	702	(1) The production company has filed all Kansas tax returns and tax
703	703	documents required by law and withholding taxes have been submitted as
704	704	required by law;
705	705	(2) all crew who are Kansas residents and Kansas-based vendors have
706	706	been paid and that there are no pending liens in this state against the
707	707	production company; and
708	708	(3) the certified project for which a sales tax exemption has been
709	709	granted or an income tax credit is requested has been completed, or in the
710	710	discretion of the secretary, a phase of the certified project has been
711	711	completed and adequate assurance, as determined by the secretary, has
712	712	been provided that the project will be fully completed.
713	713	(g) As a condition of receiving any income tax credits pursuant to this
714	714	act, the production company shall provide the secretary with a report by a
715	715	certified public accountant licensed to practice in Kansas, prepared at the
716	716	expense of the applicant, verifying that the expenditures have been made
717	717	in compliance with the requirements of this act. The report shall be
718	718	provided with a claim for income tax credits as required by section 4, and
719	719	amendments thereto, or as required by the secretary.
720	720	(h) The secretary shall notify the production company and the
721	721	secretary of revenue of determinations of qualified expenditures made by
722	722	the secretary.
723	723	1
724	724	2
725	725	3
726	726	4
727	727	5
728	728	6
729	729	7
730	730	8
731	731	9
732	732	10
733	733	11
734	734	12
735	735	13
736	736	14
737	737	15
738	738	16
739	739	17
740	740	18
741	741	19
742	742	20
743	743	21
744	744	22
745	745	23
746	746	24
747	747	25
748	748	26
749	749	27
750	750	28
751	751	29
752	752	30
753	753	31
754	754	32
755	755	33
756	756	34
757	757	35
758	758	36
759	759	37
760	760	38
761	761	39
762	762	40
763	763	41
764	764	42
765	765	43 SB 91 10
766	766	(i) The secretary of commerce and the secretary of revenue may
767	767	adopt rules and regulations to implement the provisions of this act.
768	768	New Sec. 4. (a) For tax years 2023 through 2032, for any production
769	769	company or its affiliates that make qualified production or qualified
770	770	postproduction expenditures for a certified production approved by the
771	771	secretary of commerce as provided by section 3, and amendments thereto,
772	772	there shall be allowed an income tax credit against the tax imposed under
773	773	the Kansas income tax act in the amount as determined pursuant to
774	774	subsection (d) as limited by subsection (h). The tax credit shall be applied
775	775	against the production company's income tax liability for the taxable year
776	776	in which the qualified expenditures are made by the production company.
777	777	If the amount of the tax credit allowed exceeds the production company's
778	778	income tax liability for the taxable year, an amount equal to the remainder
779	779	of the unused tax credits shall be refunded to the production company. If
780	780	the production company is a corporation having an election in effect under
781	781	subchapter S of the federal internal revenue code, a partnership or a
782	782	limited liability company, the credit provided by this section shall be
783	783	claimed by the shareholders of such corporation, the partners of such
784	784	partnership or members of such limited liability company in the same
785	785	manner as such shareholders, partners or members account for their
786	786	proportionate shares of the income or loss of the corporation, partnership
787	787	or limited liability company and in accordance with the agreement
788	788	executed pursuant to section 3, and amendments thereto. The tax credit
789	789	may be transferred as provided by subsection (k). The aggregate total
790	790	amount of credits allowed under this section shall not exceed $10,000,000
791	791	in a tax year. Ten percent of such aggregate total in each tax year shall be
792	792	designated for tax credits to Kansas-based production companies.
793	793	(b) A claim for a tax credit shall be filed with the secretary of revenue
794	794	as part of a return filed by the production company pursuant to the Kansas
795	795	income tax act. The order that agreements are executed with the secretary
796	796	of commerce pursuant to section 3, and amendments thereto, shall
797	797	determine the order that credit claims are allocated by the secretary of
798	798	revenue. A claim shall be submitted with a return or amended return within
799	799	one calendar year of the date of the last eligible production expenditure or
800	800	the last eligible postproduction expenditure for the certified production
801	801	that would be eligible for an income tax credit as provided by subsection
802	802	(a). All qualified production expenditures or postproduction expenditures
803	803	incurred during the taxable year by a production company for a certified
804	804	production shall be submitted for credit as part of the same income tax
805	805	return. A tax credit claim for qualified expenditures during a taxable year
806	806	shall not be divided and submitted with multiple returns or in multiple
807	807	years.
808	808	(c) The claim shall include a copy of the project certification and the
809	809	1
810	810	2
811	811	3
812	812	4
813	813	5
814	814	6
815	815	7
816	816	8
817	817	9
818	818	10
819	819	11
820	820	12
821	821	13
822	822	14
823	823	15
824	824	16
825	825	17
826	826	18
827	827	19
828	828	20
829	829	21
830	830	22
831	831	23
832	832	24
833	833	25
834	834	26
835	835	27
836	836	28
837	837	29
838	838	30
839	839	31
840	840	32
841	841	33
842	842	34
843	843	35
844	844	36
845	845	37
846	846	38
847	847	39
848	848	40
849	849	41
850	850	42
851	851	43 SB 91 11
852	852	determination of qualified production or postproduction expenditures by
853	853	the secretary of commerce. The claim shall also include a report by a
854	854	certified public accountant licensed to practice in Kansas, prepared at the
855	855	expense of the applicant, verifying that the expenditures have been made
856	856	in compliance with the requirements of this act.
857	857	(d) The amount of the tax credit shall be equal to 30% of:
858	858	(1) The qualified production expenditures for the certified project; or
859	859	(2) the qualified postproduction expenses for a certified project with
860	860	no qualified production expenses.
861	861	(e) The secretary of commerce may approve additional credits as
862	862	follows:
863	863	(1) In addition to the amount authorized by subsection (d)(1):
864	864	(A) Up to 5% of the qualified production expenditures for a certified
865	865	multi-film deal, a certified eligible television series, a certified high-impact
866	866	production or contributions to film-related infrastructure or workforce
867	867	development in Kansas, including, but not limited to, contributions to
868	868	permanent sets, sound stages, film editing facilities, computer graphics,
869	869	special effects or animation facilities, educational facilities or programs,
870	870	internships or apprenticeships or equipment for production activities, in
871	871	the amount such contributions are approved by the secretary of commerce;
872	872	or
873	873	(B) up to 5% for qualified production expenditures for a production if
874	874	50% or more of the crew or above-the-line personnel are Kansas residents;
875	875	or
876	876	(2) in addition to the amount authorized under subsection (d)(1) or
877	877	(2), up to an additional 5%, as determined by the secretary, of the amount
878	878	of the qualified production expenditures or qualified postproduction
879	879	expenditures, as applicable, of a certified project of a production company
880	880	that has previously received an income tax credit under this act with
881	881	respect to such certified project.
882	882	(f) In addition to or in lieu of the credits authorized by subsection (d),
883	883	as determined by the secretary, a Kansas-based production company that
884	884	incurs at least $25,000 in qualified expenditures, including, but not limited
885	885	to, expenditures for a certified production not intended for multimarket
886	886	distribution but that otherwise constitute qualified expenditures and meets
887	887	all other qualifications for a tax credit under this act shall receive a
888	888	nonrefundable tax credit in the amount of 25% of such qualified
889	889	production expenditures.
890	890	(g) Notwithstanding any other provision of this act, the tax credit
891	891	amount based on a production or postproduction expenditure for a single
892	892	individual who meets the definition of individuals who are above-the-line,
893	893	nonresident personnel shall be limited to not more than $500,000 in each
894	894	taxable year.
895	895	1
896	896	2
897	897	3
898	898	4
899	899	5
900	900	6
901	901	7
902	902	8
903	903	9
904	904	10
905	905	11
906	906	12
907	907	13
908	908	14
909	909	15
910	910	16
911	911	17
912	912	18
913	913	19
914	914	20
915	915	21
916	916	22
917	917	23
918	918	24
919	919	25
920	920	26
921	921	27
922	922	28
923	923	29
924	924	30
925	925	31
926	926	32
927	927	33
928	928	34
929	929	35
930	930	36
931	931	37
932	932	38
933	933	39
934	934	40
935	935	41
936	936	42
937	937	43 SB 91 12
938	938	(h) The maximum cumulative amount of all income tax credits
939	939	awarded to a production company for a certified project for a taxable year
940	940	shall not exceed 40% of the total qualified production expenditures or
941	941	qualified postproduction expenditures made by the production company
942	942	for that certified project during that taxable year.
943	943	(i) For purposes of determining the payment of credit claims pursuant
944	944	to this section, the secretary of revenue may require that credit claims of
945	945	affiliates be combined into one claim if necessary to accurately reflect
946	946	closely integrated activities of affiliates.
947	947	(j) If a production company hires another production company to
948	948	produce a project or contribute elements of a project for pay, the hired
949	949	company shall be considered a service provider for the hiring company,
950	950	and the hiring company shall be entitled to the income tax credit
951	951	authorized by this section.
952	952	(k) The tax credit allowed pursuant to this section may be transferred,
953	953	in whole or in part, by the production company or, as provided by
954	954	subsection (a), a shareholder, partner or member, to one or more
955	955	transferees. The transferor shall provide notification and documentation of
956	956	the transfer or transfers with its claim for a tax credit pursuant to
957	957	subsection (b) filed with the secretary of revenue in such form and manner
958	958	as may be required by the secretary of revenue, including all information
959	959	requested by the secretary of revenue regarding the transferee. The
960	960	transferor shall make the transfer within the calendar year in which the
961	961	transferor's claim is made to the secretary of revenue. The credit shall only
962	962	be transferred once. The transferor may transfer the credit to any
963	963	individual or entity subject to income tax under the Kansas income tax act.
964	964	The transferred credit shall be claimed by the transferee against the
965	965	transferee's Kansas income tax liability in the year the credit was
966	966	transferred. The amount of the transferred credit that exceeds the
967	967	transferee's tax liability for such year shall be refunded to the transferee.
968	968	The transferor or transferee shall provide such documentation of the
969	969	transfer to the secretary of revenue as may be required by the secretary and
970	970	at such time as may be required by the secretary.
971	971	New Sec. 5. On or before January 31, 2024, and each January 31
972	972	through January 31, 2033, the secretary of commerce shall submit an
973	973	annual report to the house of representatives standing committees on
974	974	commerce, labor and economic development and taxation and the senate
975	975	standing committees on commerce and assessment and taxation. The
976	976	report shall include the amounts and recipients of tax incentives approved
977	977	by the secretary pursuant to this act for the prior year and to the date of the
978	978	report, anticipated tax incentive amounts for the current year, the
979	979	production companies that have applied for and that have been certified for
980	980	projects, a description of ongoing and completed projects and the impact
981	981	1
982	982	2
983	983	3
984	984	4
985	985	5
986	986	6
987	987	7
988	988	8
989	989	9
990	990	10
991	991	11
992	992	12
993	993	13
994	994	14
995	995	15
996	996	16
997	997	17
998	998	18
999	999	19
1000	1000	20
1001	1001	21
1002	1002	22
1003	1003	23
1004	1004	24
1005	1005	25
1006	1006	26
1007	1007	27
1008	1008	28
1009	1009	29
1010	1010	30
1011	1011	31
1012	1012	32
1013	1013	33
1014	1014	34
1015	1015	35
1016	1016	36
1017	1017	37
1018	1018	38
1019	1019	39
1020	1020	40
1021	1021	41
1022	1022	42
1023	1023	43 SB 91 13
1024	1024	of such projects and the program on the film, video or digital production
1025	1025	industry in Kansas. The secretary of revenue shall provide the secretary of
1026	1026	commerce with information as necessary for the report in accordance with
1027	1027	the terms of the agreements required by section 3, and amendments
1028	1028	thereto.
1029	1029	New Sec. 6. No sales tax exemption or income tax credit pursuant to
1030	1030	this act shall apply or be awarded for expenditures made on or after
1031	1031	January 1, 2033.
1032	1032	New Sec. 7. (a) The secretary of commerce is hereby authorized and
1033	1033	empowered to award grants for educational purposes or programs to
1034	1034	develop and support the Kansas film and digital media industry. The
1035	1035	purpose of such grants is to develop, expand and improve Kansas
1036	1036	educational programs directly relevant to development and support of the
1037	1037	film and digital media industry in this state. The secretary is authorized to
1038	1038	award such grants to not-for-profit postsecondary educational institutions
1039	1039	with a main campus or principal operations in Kansas, including public or
1040	1040	private four-year universities or colleges, community colleges or technical
1041	1041	colleges established under the laws of this state or the Washburn institute
1042	1042	of technology. In awarding such grants, the secretary shall select such
1043	1043	institutions that are engaged in or that seek to engage in educational
1044	1044	programs or activities related to film, media, digital technology, gaming or
1045	1045	other evolving areas of the film and digital media industry in Kansas. The
1046	1046	secretary shall not award grants pursuant to this section on or after January
1047	1047	1, 2033.
1048	1048	(b) (1) There is hereby established in the state treasury the Kansas
1049	1049	film and digital media production development act education fund to be
1050	1050	administered by the secretary of commerce. All moneys credited to such
1051	1051	fund shall be used to provide grants for the expansion of film and digital
1052	1052	media production-related education in the state of Kansas and the
1053	1053	administration of such fund. All expenditures from such fund shall be
1054	1054	made in accordance with the provisions of appropriation acts and upon
1055	1055	warrants of the director of accounts and reports issued pursuant to
1056	1056	vouchers approved by the secretary of commerce or the secretary's
1057	1057	designee.
1058	1058	(2) The secretary shall remit any moneys received pursuant to any
1059	1059	penalties or any repayment obligations imposed by the secretary pursuant
1060	1060	to this section to the state treasurer in accordance with the provisions of
1061	1061	K.S.A. 75-4215, and amendments thereto. Upon receipt of each such
1062	1062	remittance, the state treasurer shall deposit the entire amount in the state
1063	1063	treasury to the credit of the Kansas film and digital media production
1064	1064	development act education fund.
1065	1065	(c) (1) Grants made by the secretary of commerce from the Kansas
1066	1066	film and digital media production development act education fund shall be
1067	1067	1
1068	1068	2
1069	1069	3
1070	1070	4
1071	1071	5
1072	1072	6
1073	1073	7
1074	1074	8
1075	1075	9
1076	1076	10
1077	1077	11
1078	1078	12
1079	1079	13
1080	1080	14
1081	1081	15
1082	1082	16
1083	1083	17
1084	1084	18
1085	1085	19
1086	1086	20
1087	1087	21
1088	1088	22
1089	1089	23
1090	1090	24
1091	1091	25
1092	1092	26
1093	1093	27
1094	1094	28
1095	1095	29
1096	1096	30
1097	1097	31
1098	1098	32
1099	1099	33
1100	1100	34
1101	1101	35
1102	1102	36
1103	1103	37
1104	1104	38
1105	1105	39
1106	1106	40
1107	1107	41
1108	1108	42
1109	1109	43 SB 91 14
1110	1110	used for educational purposes, including, but not limited to:
1111	1111	(A) Internships and apprenticeship programs;
1112	1112	(B) scholarships and loan forgiveness programs;
1113	1113	(C) curriculum development and staffing; or
1114	1114	(D) resources such as lab facilities or equipment.
1115	1115	(2) Such grants shall be awarded upon such terms and conditions as
1116	1116	the secretary of commerce may deem appropriate. Such terms and
1117	1117	conditions shall:
1118	1118	(A) Require that scholarship or loan forgiveness programs that
1119	1119	receive grant funding require student scholarship or loan forgiveness
1120	1120	recipients to agree to reside in Kansas and work primarily in Kansas or
1121	1121	with a Kansas-based company, when possible, for at least two years
1122	1122	following completion of an educational program;
1123	1123	(B) include specified objectives and milestones as agreed by the
1124	1124	Kansas educational institution grant recipient and the secretary, including,
1125	1125	but not limited to, graduate job placement goals; and
1126	1126	(C) require the Kansas educational institution to provide information
1127	1127	as requested by the secretary for purposes of administering the grant
1128	1128	program, monitoring the use of funds and the achievement of milestones
1129	1129	and objectives and preparation of the report required by subsection (e).
1130	1130	(d) (1) Subject to appropriation acts, on July 1, 2023, and each July 1
1131	1131	thereafter through July 1, 2032, the director of accounts and reports shall
1132	1132	transfer $1,000,000 from the state general fund to the Kansas film and
1133	1133	digital media production development act education fund. Any
1134	1134	unexpended balance in such fund at the close of a fiscal year shall remain
1135	1135	credited to the fund for use in the succeeding fiscal year.
1136	1136	(2) On January 1, 2033, the director of accounts and reports shall
1137	1137	transfer all unencumbered moneys in the Kansas film and digital media
1138	1138	production development act education fund to the state general fund. After
1139	1139	such transfer and the disbursement of any encumbered funds pursuant to
1140	1140	grant awards made prior to January 1, 2033, the Kansas film and digital
1141	1141	media production development act education fund shall be abolished.
1142	1142	Upon abolishment of such fund, all liabilities of the Kansas film and
1143	1143	digital media production development act education fund shall be
1144	1144	transferred to and imposed on the state general fund.
1145	1145	(e) On or before January 31, 2024, and each January 31 through
1146	1146	January 31, 2033, the secretary of commerce shall submit an annual report
1147	1147	to the house of representatives standing committee on commerce, labor
1148	1148	and economic development and the senate standing committee on
1149	1149	commerce on the administration of the Kansas film and digital media
1150	1150	production development act education fund and all grants awarded from
1151	1151	the fund. Such report shall contain specific and aggregate information
1152	1152	regarding all expenditures from the fund, the Kansas educational
1153	1153	1
1154	1154	2
1155	1155	3
1156	1156	4
1157	1157	5
1158	1158	6
1159	1159	7
1160	1160	8
1161	1161	9
1162	1162	10
1163	1163	11
1164	1164	12
1165	1165	13
1166	1166	14
1167	1167	15
1168	1168	16
1169	1169	17
1170	1170	18
1171	1171	19
1172	1172	20
1173	1173	21
1174	1174	22
1175	1175	23
1176	1176	24
1177	1177	25
1178	1178	26
1179	1179	27
1180	1180	28
1181	1181	29
1182	1182	30
1183	1183	31
1184	1184	32
1185	1185	33
1186	1186	34
1187	1187	35
1188	1188	36
1189	1189	37
1190	1190	38
1191	1191	39
1192	1192	40
1193	1193	41
1194	1194	42
1195	1195	43 SB 91 15
1196	1196	institutions receiving grants, the amount of funds expended for each grant,
1197	1197	the reason and purpose for which each grant was approved, including how
1198	1198	it was intended to further the purposes of the fund, the actual use of such
1199	1199	grant funds by the Kansas educational institution and the accomplishment
1200	1200	or progress made by the educational institution toward agreed milestones
1201	1201	and objectives.
1202	1202	New Sec. 8. (a) The secretary of commerce is hereby authorized and
1203	1203	empowered to award grants or loans from the Kansas film and digital
1204	1204	media production development act workforce training and business direct
1205	1205	investment fund in connection with projects certified by the secretary
1206	1206	pursuant to section 3, and amendments thereto. The secretary shall award
1207	1207	such grants or loans for the purpose of facilitating and supporting certified
1208	1208	projects and developing the Kansas film and digital media industry by
1209	1209	funding workforce training and by investing directly in Kansas companies
1210	1210	engaged in or seeking to engage in certified projects. The secretary shall
1211	1211	not award grants or loans pursuant to this section on or after January 1,
1212	1212	2033.
1213	1213	(b) (1) There is hereby established in the state treasury the Kansas
1214	1214	film and digital media production development act workforce training and
1215	1215	business direct investment fund to be administered by the secretary of
1216	1216	commerce. All moneys credited to such fund shall be used to provide
1217	1217	grants or loans as provided by this section for the support of workforce
1218	1218	training and direct investment in Kansas companies in relation to certified
1219	1219	film or digital media production projects, the development of the Kansas
1220	1220	film and digital media industry and the administration of such fund. All
1221	1221	expenditures from such fund shall be made in accordance with the
1222	1222	provisions of appropriation acts and upon warrants of the director of
1223	1223	accounts and reports issued pursuant to vouchers approved by the
1224	1224	secretary of commerce or the secretary's designee.
1225	1225	(2) The secretary of commerce shall remit any moneys received
1226	1226	pursuant to loan repayments, interest, any penalties or any other repayment
1227	1227	obligations imposed by the secretary pursuant to this section to the state
1228	1228	treasurer in accordance with the provisions of K.S.A. 75-4215, and
1229	1229	amendments thereto. Upon receipt of each such remittance, the state
1230	1230	treasurer shall deposit the entire amount in the state treasury to the credit
1231	1231	of the Kansas film and digital media production development act
1232	1232	workforce training and business direct investment fund.
1233	1233	(c) (1) Grants made by the secretary of commerce from the Kansas
1234	1234	film and digital media production development act workforce training and
1235	1235	business direct investment fund shall be used for workforce development
1236	1236	purposes, including, but not limited to:
1237	1237	(A) Apprenticeship programs for Kansas residents;
1238	1238	(B) crew training for Kansas residents, including:
1239	1239	1
1240	1240	2
1241	1241	3
1242	1242	4
1243	1243	5
1244	1244	6
1245	1245	7
1246	1246	8
1247	1247	9
1248	1248	10
1249	1249	11
1250	1250	12
1251	1251	13
1252	1252	14
1253	1253	15
1254	1254	16
1255	1255	17
1256	1256	18
1257	1257	19
1258	1258	20
1259	1259	21
1260	1260	22
1261	1261	23
1262	1262	24
1263	1263	25
1264	1264	26
1265	1265	27
1266	1266	28
1267	1267	29
1268	1268	30
1269	1269	31
1270	1270	32
1271	1271	33
1272	1272	34
1273	1273	35
1274	1274	36
1275	1275	37
1276	1276	38
1277	1277	39
1278	1278	40
1279	1279	41
1280	1280	42
1281	1281	43 SB 91 16
1282	1282	(i) Training provided by not-for-profit postsecondary educational
1283	1283	institutions with a main campus or principal operations in Kansas selected
1284	1284	by the secretary, including four-year public or private educational
1285	1285	institutions, public community colleges or public technical schools
1286	1286	established under the laws of this state or the Washburn institute of
1287	1287	technology; or
1288	1288	(ii) employee training provided by any production company or a
1289	1289	Kansas company involved in the film and digital media industry and
1290	1290	engaged in a certified project; or
1291	1291	(C) development of training models, in coordination and cooperation
1292	1292	with the film and digital media production industry, for use by Kansas
1293	1293	educational institutions.
1294	1294	(2) Such grants shall be upon such terms and conditions as the
1295	1295	secretary of commerce may deem appropriate. Such terms and conditions
1296	1296	shall include an agreement by the grant recipient to provide information as
1297	1297	requested by the secretary for purposes of administering the grant
1298	1298	program, monitoring the use of funds and preparation of the report
1299	1299	required by subsection (f).
1300	1300	(d) (1) Direct investments made by the secretary of commerce from
1301	1301	the Kansas film and digital media production development act workforce
1302	1302	training and business direct investment fund shall be used for investing in
1303	1303	Kansas film and digital media production industry companies that will or
1304	1304	seek to be engaged in certified projects, including Kansas-based
1305	1305	production companies or Kansas businesses that are offering personnel,
1306	1306	services, facilities, leases or rentals or that are offering, engaged in or
1307	1307	seeking to engage in other production or postproduction-related business
1308	1308	activities. Investments may be made in Kansas start-ups, Kansas
1309	1309	businesses seeking to expand into the film and digital media production
1310	1310	industry or established Kansas businesses in such industry.
1311	1311	(2) Direct investments shall be comprised of a loan component in the
1312	1312	amount of 80% and a grant component in the amount of 20% of the total
1313	1313	award of funds to the recipient. The investment shall be made upon such
1314	1314	terms and conditions as the secretary of commerce may deem appropriate.
1315	1315	Such terms and conditions shall:
1316	1316	(A) Include specified objectives and milestones as required by the
1317	1317	secretary and provisions for repayment of the grant or loan if conditions
1318	1318	specified by the secretary are not met; and
1319	1319	(B) require the recipient to provide information as requested by the
1320	1320	secretary for purposes of administering the direct investment program,
1321	1321	monitoring the use of funds and achievement of milestones and objectives
1322	1322	and preparation of the report required by subsection (f).
1323	1323	(e) (1) Subject to appropriation acts, on July 1, 2024, and each July 1
1324	1324	thereafter through July 1, 2032, the director of accounts and reports shall
1325	1325	1
1326	1326	2
1327	1327	3
1328	1328	4
1329	1329	5
1330	1330	6
1331	1331	7
1332	1332	8
1333	1333	9
1334	1334	10
1335	1335	11
1336	1336	12
1337	1337	13
1338	1338	14
1339	1339	15
1340	1340	16
1341	1341	17
1342	1342	18
1343	1343	19
1344	1344	20
1345	1345	21
1346	1346	22
1347	1347	23
1348	1348	24
1349	1349	25
1350	1350	26
1351	1351	27
1352	1352	28
1353	1353	29
1354	1354	30
1355	1355	31
1356	1356	32
1357	1357	33
1358	1358	34
1359	1359	35
1360	1360	36
1361	1361	37
1362	1362	38
1363	1363	39
1364	1364	40
1365	1365	41
1366	1366	42
1367	1367	43 SB 91 17
1368	1368	transfer $1,000,000 from the state general fund to the Kansas film and
1369	1369	digital media production development act workforce training and business
1370	1370	direct investment fund. Any unexpended balance in such fund at the close
1371	1371	of a fiscal year shall remain credited to the fund for use in the succeeding
1372	1372	fiscal year.
1373	1373	(2) On January 1, 2033, the director of accounts and reports shall
1374	1374	transfer all unencumbered moneys in the Kansas film and digital media
1375	1375	production development act workforce training and business direct
1376	1376	investment fund to the state general fund. After such transfer and the
1377	1377	disbursement of any encumbered funds pursuant to awards made prior to
1378	1378	January 1, 2033, the Kansas film and digital media production
1379	1379	development act workforce training and business direct investment fund
1380	1380	shall be abolished. Upon abolishment of such fund, all liabilities of the
1381	1381	Kansas film and digital media production development act workforce
1382	1382	training and business direct investment fund shall be transferred to and
1383	1383	imposed on the state general fund.
1384	1384	(f) On or before January 31, 2024, and each January 31 thereafter
1385	1385	through January 31, 2033, the secretary of commerce shall submit an
1386	1386	annual report to the house of representatives standing committee on
1387	1387	commerce, labor and economic development and the senate standing
1388	1388	committee on commerce on the administration of the Kansas film and
1389	1389	digital media production development act workforce training and business
1390	1390	direct investment fund and all grants or loans awarded from the fund. Such
1391	1391	report shall contain specific and aggregate information regarding all
1392	1392	expenditures from the fund, the businesses or Kansas postsecondary
1393	1393	educational institutions receiving funds, the amount of funds expended for
1394	1394	each grant or loan, the reason and purpose for which each grant or loan
1395	1395	was approved, including how it was intended to further the purposes of the
1396	1396	Kansas film and digital media production development act project
1397	1397	workforce training and business direct investment fund, the actual use of
1398	1398	the grant or loan funds by the recipient and the accomplishment of or
1399	1399	progress made toward agreed milestones and objectives.
1400	1400	Sec. 9. K.S.A. 2022 Supp. 79-3606 is hereby amended to read as
1401	1401	follows: 79-3606. The following shall be exempt from the tax imposed by
1402	1402	this act:
1403	1403	(a) All sales of motor-vehicle fuel or other articles upon which a sales
1404	1404	or excise tax has been paid, not subject to refund, under the laws of this
1405	1405	state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
1406	1406	3301, and amendments thereto, including consumable material for such
1407	1407	electronic cigarettes, cereal malt beverages and malt products as defined
1408	1408	by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt,
1409	1409	malt syrup and malt extract, that is not subject to taxation under the
1410	1410	provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles
1411	1411	1
1412	1412	2
1413	1413	3
1414	1414	4
1415	1415	5
1416	1416	6
1417	1417	7
1418	1418	8
1419	1419	9
1420	1420	10
1421	1421	11
1422	1422	12
1423	1423	13
1424	1424	14
1425	1425	15
1426	1426	16
1427	1427	17
1428	1428	18
1429	1429	19
1430	1430	20
1431	1431	21
1432	1432	22
1433	1433	23
1434	1434	24
1435	1435	25
1436	1436	26
1437	1437	27
1438	1438	28
1439	1439	29
1440	1440	30
1441	1441	31
1442	1442	32
1443	1443	33
1444	1444	34
1445	1445	35
1446	1446	36
1447	1447	37
1448	1448	38
1449	1449	39
1450	1450	40
1451	1451	41
1452	1452	42
1453	1453	43 SB 91 18
1454	1454	taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed
1455	1455	pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and
1456	1456	laundry services taxed pursuant to K.S.A. 65-34,150, and amendments
1457	1457	thereto, and gross receipts from regulated sports contests taxed pursuant to
1458	1458	the Kansas professional regulated sports act, and amendments thereto;
1459	1459	(b) all sales of tangible personal property or service, including the
1460	1460	renting and leasing of tangible personal property, purchased directly by the
1461	1461	state of Kansas, a political subdivision thereof, other than a school or
1462	1462	educational institution, or purchased by a public or private nonprofit
1463	1463	hospital, public hospital authority, nonprofit blood, tissue or organ bank or
1464	1464	nonprofit integrated community care organization and used exclusively for
1465	1465	state, political subdivision, hospital, public hospital authority, nonprofit
1466	1466	blood, tissue or organ bank or nonprofit integrated community care
1467	1467	organization purposes, except when: (1) Such state, hospital or public
1468	1468	hospital authority is engaged or proposes to engage in any business
1469	1469	specifically taxable under the provisions of this act and such items of
1470	1470	tangible personal property or service are used or proposed to be used in
1471	1471	such business; or (2) such political subdivision is engaged or proposes to
1472	1472	engage in the business of furnishing gas, electricity or heat to others and
1473	1473	such items of personal property or service are used or proposed to be used
1474	1474	in such business;
1475	1475	(c) all sales of tangible personal property or services, including the
1476	1476	renting and leasing of tangible personal property, purchased directly by a
1477	1477	public or private elementary or secondary school or public or private
1478	1478	nonprofit educational institution and used primarily by such school or
1479	1479	institution for nonsectarian programs and activities provided or sponsored
1480	1480	by such school or institution or in the erection, repair or enlargement of
1481	1481	buildings to be used for such purposes. The exemption herein provided
1482	1482	shall not apply to erection, construction, repair, enlargement or equipment
1483	1483	of buildings used primarily for human habitation, except that such
1484	1484	exemption shall apply to the erection, construction, repair, enlargement or
1485	1485	equipment of buildings used for human habitation by the cerebral palsy
1486	1486	research foundation of Kansas located in Wichita, Kansas, and multi
1487	1487	community diversified services, incorporated, located in McPherson,
1488	1488	Kansas;
1489	1489	(d) all sales of tangible personal property or services purchased by a
1490	1490	contractor for the purpose of constructing, equipping, reconstructing,
1491	1491	maintaining, repairing, enlarging, furnishing or remodeling facilities for
1492	1492	any public or private nonprofit hospital or public hospital authority, public
1493	1493	or private elementary or secondary school, a public or private nonprofit
1494	1494	educational institution, state correctional institution including a privately
1495	1495	constructed correctional institution contracted for state use and ownership,
1496	1496	that would be exempt from taxation under the provisions of this act if
1497	1497	1
1498	1498	2
1499	1499	3
1500	1500	4
1501	1501	5
1502	1502	6
1503	1503	7
1504	1504	8
1505	1505	9
1506	1506	10
1507	1507	11
1508	1508	12
1509	1509	13
1510	1510	14
1511	1511	15
1512	1512	16
1513	1513	17
1514	1514	18
1515	1515	19
1516	1516	20
1517	1517	21
1518	1518	22
1519	1519	23
1520	1520	24
1521	1521	25
1522	1522	26
1523	1523	27
1524	1524	28
1525	1525	29
1526	1526	30
1527	1527	31
1528	1528	32
1529	1529	33
1530	1530	34
1531	1531	35
1532	1532	36
1533	1533	37
1534	1534	38
1535	1535	39
1536	1536	40
1537	1537	41
1538	1538	42
1539	1539	43 SB 91 19
1540	1540	purchased directly by such hospital or public hospital authority, school,
1541	1541	educational institution or a state correctional institution; and all sales of
1542	1542	tangible personal property or services purchased by a contractor for the
1543	1543	purpose of constructing, equipping, reconstructing, maintaining, repairing,
1544	1544	enlarging, furnishing or remodeling facilities for any political subdivision
1545	1545	of the state or district described in subsection (s), the total cost of which is
1546	1546	paid from funds of such political subdivision or district and that would be
1547	1547	exempt from taxation under the provisions of this act if purchased directly
1548	1548	by such political subdivision or district. Nothing in this subsection or in
1549	1549	the provisions of K.S.A. 12-3418, and amendments thereto, shall be
1550	1550	deemed to exempt the purchase of any construction machinery, equipment
1551	1551	or tools used in the constructing, equipping, reconstructing, maintaining,
1552	1552	repairing, enlarging, furnishing or remodeling facilities for any political
1553	1553	subdivision of the state or any such district. As used in this subsection,
1554	1554	K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a
1555	1555	political subdivision" shall mean general tax revenues, the proceeds of any
1556	1556	bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
1557	1557	purpose of constructing, equipping, reconstructing, repairing, enlarging,
1558	1558	furnishing or remodeling facilities that are to be leased to the donor. When
1559	1559	any political subdivision of the state, district described in subsection (s),
1560	1560	public or private nonprofit hospital or public hospital authority, public or
1561	1561	private elementary or secondary school, public or private nonprofit
1562	1562	educational institution, state correctional institution including a privately
1563	1563	constructed correctional institution contracted for state use and ownership
1564	1564	shall contract for the purpose of constructing, equipping, reconstructing,
1565	1565	maintaining, repairing, enlarging, furnishing or remodeling facilities, it
1566	1566	shall obtain from the state and furnish to the contractor an exemption
1567	1567	certificate for the project involved, and the contractor may purchase
1568	1568	materials for incorporation in such project. The contractor shall furnish the
1569	1569	number of such certificate to all suppliers from whom such purchases are
1570	1570	made, and such suppliers shall execute invoices covering the same bearing
1571	1571	the number of such certificate. Upon completion of the project the
1572	1572	contractor shall furnish to the political subdivision, district described in
1573	1573	subsection (s), hospital or public hospital authority, school, educational
1574	1574	institution or department of corrections concerned a sworn statement, on a
1575	1575	form to be provided by the director of taxation, that all purchases so made
1576	1576	were entitled to exemption under this subsection. As an alternative to the
1577	1577	foregoing procedure, any such contracting entity may apply to the
1578	1578	secretary of revenue for agent status for the sole purpose of issuing and
1579	1579	furnishing project exemption certificates to contractors pursuant to rules
1580	1580	and regulations adopted by the secretary establishing conditions and
1581	1581	standards for the granting and maintaining of such status. All invoices
1582	1582	shall be held by the contractor for a period of five years and shall be
1583	1583	1
1584	1584	2
1585	1585	3
1586	1586	4
1587	1587	5
1588	1588	6
1589	1589	7
1590	1590	8
1591	1591	9
1592	1592	10
1593	1593	11
1594	1594	12
1595	1595	13
1596	1596	14
1597	1597	15
1598	1598	16
1599	1599	17
1600	1600	18
1601	1601	19
1602	1602	20
1603	1603	21
1604	1604	22
1605	1605	23
1606	1606	24
1607	1607	25
1608	1608	26
1609	1609	27
1610	1610	28
1611	1611	29
1612	1612	30
1613	1613	31
1614	1614	32
1615	1615	33
1616	1616	34
1617	1617	35
1618	1618	36
1619	1619	37
1620	1620	38
1621	1621	39
1622	1622	40
1623	1623	41
1624	1624	42
1625	1625	43 SB 91 20
1626	1626	subject to audit by the director of taxation. If any materials purchased
1627	1627	under such a certificate are found not to have been incorporated in the
1628	1628	building or other project or not to have been returned for credit or the sales
1629	1629	or compensating tax otherwise imposed upon such materials that will not
1630	1630	be so incorporated in the building or other project reported and paid by
1631	1631	such contractor to the director of taxation not later than the 20
1632	1632	th
1633	1633	day of the
1634	1634	month following the close of the month in which it shall be determined
1635	1635	that such materials will not be used for the purpose for which such
1636	1636	certificate was issued, the political subdivision, district described in
1637	1637	subsection (s), hospital or public hospital authority, school, educational
1638	1638	institution or the contractor contracting with the department of corrections
1639	1639	for a correctional institution concerned shall be liable for tax on all
1640	1640	materials purchased for the project, and upon payment thereof it may
1641	1641	recover the same from the contractor together with reasonable attorney
1642	1642	fees. Any contractor or any agent, employee or subcontractor thereof, who
1643	1643	shall use or otherwise dispose of any materials purchased under such a
1644	1644	certificate for any purpose other than that for which such a certificate is
1645	1645	issued without the payment of the sales or compensating tax otherwise
1646	1646	imposed upon such materials, shall be guilty of a misdemeanor and, upon
1647	1647	conviction therefor, shall be subject to the penalties provided for in K.S.A.
1648	1648	79-3615(h), and amendments thereto;
1649	1649	(e) all sales of tangible personal property or services purchased by a
1650	1650	contractor for the erection, repair or enlargement of buildings or other
1651	1651	projects for the government of the United States, its agencies or
1652	1652	instrumentalities, that would be exempt from taxation if purchased directly
1653	1653	by the government of the United States, its agencies or instrumentalities.
1654	1654	When the government of the United States, its agencies or
1655	1655	instrumentalities shall contract for the erection, repair, or enlargement of
1656	1656	any building or other project, it shall obtain from the state and furnish to
1657	1657	the contractor an exemption certificate for the project involved, and the
1658	1658	contractor may purchase materials for incorporation in such project. The
1659	1659	contractor shall furnish the number of such certificates to all suppliers
1660	1660	from whom such purchases are made, and such suppliers shall execute
1661	1661	invoices covering the same bearing the number of such certificate. Upon
1662	1662	completion of the project the contractor shall furnish to the government of
1663	1663	the United States, its agencies or instrumentalities concerned a sworn
1664	1664	statement, on a form to be provided by the director of taxation, that all
1665	1665	purchases so made were entitled to exemption under this subsection. As an
1666	1666	alternative to the foregoing procedure, any such contracting entity may
1667	1667	apply to the secretary of revenue for agent status for the sole purpose of
1668	1668	issuing and furnishing project exemption certificates to contractors
1669	1669	pursuant to rules and regulations adopted by the secretary establishing
1670	1670	conditions and standards for the granting and maintaining of such status.
1671	1671	1
1672	1672	2
1673	1673	3
1674	1674	4
1675	1675	5
1676	1676	6
1677	1677	7
1678	1678	8
1679	1679	9
1680	1680	10
1681	1681	11
1682	1682	12
1683	1683	13
1684	1684	14
1685	1685	15
1686	1686	16
1687	1687	17
1688	1688	18
1689	1689	19
1690	1690	20
1691	1691	21
1692	1692	22
1693	1693	23
1694	1694	24
1695	1695	25
1696	1696	26
1697	1697	27
1698	1698	28
1699	1699	29
1700	1700	30
1701	1701	31
1702	1702	32
1703	1703	33
1704	1704	34
1705	1705	35
1706	1706	36
1707	1707	37
1708	1708	38
1709	1709	39
1710	1710	40
1711	1711	41
1712	1712	42
1713	1713	43 SB 91 21
1714	1714	All invoices shall be held by the contractor for a period of five years and
1715	1715	shall be subject to audit by the director of taxation. Any contractor or any
1716	1716	agent, employee or subcontractor thereof, who shall use or otherwise
1717	1717	dispose of any materials purchased under such a certificate for any purpose
1718	1718	other than that for which such a certificate is issued without the payment
1719	1719	of the sales or compensating tax otherwise imposed upon such materials,
1720	1720	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
1721	1721	subject to the penalties provided for in K.S.A. 79-3615(h), and
1722	1722	amendments thereto;
1723	1723	(f) tangible personal property purchased by a railroad or public utility
1724	1724	for consumption or movement directly and immediately in interstate
1725	1725	commerce;
1726	1726	(g) sales of aircraft including remanufactured and modified aircraft
1727	1727	sold to persons using directly or through an authorized agent such aircraft
1728	1728	as certified or licensed carriers of persons or property in interstate or
1729	1729	foreign commerce under authority of the laws of the United States or any
1730	1730	foreign government or sold to any foreign government or agency or
1731	1731	instrumentality of such foreign government and all sales of aircraft for use
1732	1732	outside of the United States and sales of aircraft repair, modification and
1733	1733	replacement parts and sales of services employed in the remanufacture,
1734	1734	modification and repair of aircraft;
1735	1735	(h) all rentals of nonsectarian textbooks by public or private
1736	1736	elementary or secondary schools;
1737	1737	(i) the lease or rental of all films, records, tapes, or any type of sound
1738	1738	or picture transcriptions used by motion picture exhibitors;
1739	1739	(j) meals served without charge or food used in the preparation of
1740	1740	such meals to employees of any restaurant, eating house, dining car, hotel,
1741	1741	drugstore or other place where meals or drinks are regularly sold to the
1742	1742	public if such employees' duties are related to the furnishing or sale of
1743	1743	such meals or drinks;
1744	1744	(k) any motor vehicle, semitrailer or pole trailer, as such terms are
1745	1745	defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and
1746	1746	delivered in this state to a bona fide resident of another state, which motor
1747	1747	vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
1748	1748	in this state and which vehicle, semitrailer, pole trailer or aircraft will not
1749	1749	remain in this state more than 10 days;
1750	1750	(l) all isolated or occasional sales of tangible personal property,
1751	1751	services, substances or things, except isolated or occasional sale of motor
1752	1752	vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and
1753	1753	amendments thereto;
1754	1754	(m) all sales of tangible personal property that become an ingredient
1755	1755	or component part of tangible personal property or services produced,
1756	1756	manufactured or compounded for ultimate sale at retail within or without
1757	1757	1
1758	1758	2
1759	1759	3
1760	1760	4
1761	1761	5
1762	1762	6
1763	1763	7
1764	1764	8
1765	1765	9
1766	1766	10
1767	1767	11
1768	1768	12
1769	1769	13
1770	1770	14
1771	1771	15
1772	1772	16
1773	1773	17
1774	1774	18
1775	1775	19
1776	1776	20
1777	1777	21
1778	1778	22
1779	1779	23
1780	1780	24
1781	1781	25
1782	1782	26
1783	1783	27
1784	1784	28
1785	1785	29
1786	1786	30
1787	1787	31
1788	1788	32
1789	1789	33
1790	1790	34
1791	1791	35
1792	1792	36
1793	1793	37
1794	1794	38
1795	1795	39
1796	1796	40
1797	1797	41
1798	1798	42
1799	1799	43 SB 91 22
1800	1800	the state of Kansas; and any such producer, manufacturer or compounder
1801	1801	may obtain from the director of taxation and furnish to the supplier an
1802	1802	exemption certificate number for tangible personal property for use as an
1803	1803	ingredient or component part of the property or services produced,
1804	1804	manufactured or compounded;
1805	1805	(n) all sales of tangible personal property that is consumed in the
1806	1806	production, manufacture, processing, mining, drilling, refining or
1807	1807	compounding of tangible personal property, the treating of by-products or
1808	1808	wastes derived from any such production process, the providing of
1809	1809	services or the irrigation of crops for ultimate sale at retail within or
1810	1810	without the state of Kansas; and any purchaser of such property may
1811	1811	obtain from the director of taxation and furnish to the supplier an
1812	1812	exemption certificate number for tangible personal property for
1813	1813	consumption in such production, manufacture, processing, mining,
1814	1814	drilling, refining, compounding, treating, irrigation and in providing such
1815	1815	services;
1816	1816	(o) all sales of animals, fowl and aquatic plants and animals, the
1817	1817	primary purpose of which is use in agriculture or aquaculture, as defined in
1818	1818	K.S.A. 47-1901, and amendments thereto, the production of food for
1819	1819	human consumption, the production of animal, dairy, poultry or aquatic
1820	1820	plant and animal products, fiber or fur, or the production of offspring for
1821	1821	use for any such purpose or purposes;
1822	1822	(p) all sales of drugs dispensed pursuant to a prescription order by a
1823	1823	licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-
1824	1824	1626, and amendments thereto. As used in this subsection, "drug" means a
1825	1825	compound, substance or preparation and any component of a compound,
1826	1826	substance or preparation, other than food and food ingredients, dietary
1827	1827	supplements or alcoholic beverages, recognized in the official United
1828	1828	States pharmacopeia, official homeopathic pharmacopoeia of the United
1829	1829	States or official national formulary, and supplement to any of them,
1830	1830	intended for use in the diagnosis, cure, mitigation, treatment or prevention
1831	1831	of disease or intended to affect the structure or any function of the body,
1832	1832	except that for taxable years commencing after December 31, 2013, this
1833	1833	subsection shall not apply to any sales of drugs used in the performance or
1834	1834	induction of an abortion, as defined in K.S.A. 65-6701, and amendments
1835	1835	thereto;
1836	1836	(q) all sales of insulin dispensed by a person licensed by the state
1837	1837	board of pharmacy to a person for treatment of diabetes at the direction of
1838	1838	a person licensed to practice medicine by the state board of healing arts;
1839	1839	(r) all sales of oxygen delivery equipment, kidney dialysis equipment,
1840	1840	enteral feeding systems, prosthetic devices and mobility enhancing
1841	1841	equipment prescribed in writing by a person licensed to practice the
1842	1842	healing arts, dentistry or optometry, and in addition to such sales, all sales
1843	1843	1
1844	1844	2
1845	1845	3
1846	1846	4
1847	1847	5
1848	1848	6
1849	1849	7
1850	1850	8
1851	1851	9
1852	1852	10
1853	1853	11
1854	1854	12
1855	1855	13
1856	1856	14
1857	1857	15
1858	1858	16
1859	1859	17
1860	1860	18
1861	1861	19
1862	1862	20
1863	1863	21
1864	1864	22
1865	1865	23
1866	1866	24
1867	1867	25
1868	1868	26
1869	1869	27
1870	1870	28
1871	1871	29
1872	1872	30
1873	1873	31
1874	1874	32
1875	1875	33
1876	1876	34
1877	1877	35
1878	1878	36
1879	1879	37
1880	1880	38
1881	1881	39
1882	1882	40
1883	1883	41
1884	1884	42
1885	1885	43 SB 91 23
1886	1886	of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto,
1887	1887	and repair and replacement parts therefor, including batteries, by a person
1888	1888	licensed in the practice of dispensing and fitting hearing aids pursuant to
1889	1889	the provisions of K.S.A. 74-5808, and amendments thereto. For the
1890	1890	purposes of this subsection: (1) "Mobility enhancing equipment" means
1891	1891	equipment including repair and replacement parts to same, but does not
1892	1892	include durable medical equipment, which is primarily and customarily
1893	1893	used to provide or increase the ability to move from one place to another
1894	1894	and which is appropriate for use either in a home or a motor vehicle; is not
1895	1895	generally used by persons with normal mobility; and does not include any
1896	1896	motor vehicle or equipment on a motor vehicle normally provided by a
1897	1897	motor vehicle manufacturer; and (2) "prosthetic device" means a
1898	1898	replacement, corrective or supportive device including repair and
1899	1899	replacement parts for same worn on or in the body to artificially replace a
1900	1900	missing portion of the body, prevent or correct physical deformity or
1901	1901	malfunction or support a weak or deformed portion of the body;
1902	1902	(s) except as provided in K.S.A. 82a-2101, and amendments thereto,
1903	1903	all sales of tangible personal property or services purchased directly or
1904	1904	indirectly by a groundwater management district organized or operating
1905	1905	under the authority of K.S.A. 82a-1020 et seq., and amendments thereto,
1906	1906	by a rural water district organized or operating under the authority of
1907	1907	K.S.A. 82a-612, and amendments thereto, or by a water supply district
1908	1908	organized or operating under the authority of K.S.A. 19-3501 et seq., 19-
1909	1909	3522 et seq. or 19-3545, and amendments thereto, which property or
1910	1910	services are used in the construction activities, operation or maintenance of
1911	1911	the district;
1912	1912	(t) all sales of farm machinery and equipment or aquaculture
1913	1913	machinery and equipment, repair and replacement parts therefor and
1914	1914	services performed in the repair and maintenance of such machinery and
1915	1915	equipment. For the purposes of this subsection the term "farm machinery
1916	1916	and equipment or aquaculture machinery and equipment" shall include a
1917	1917	work-site utility vehicle, as defined in K.S.A. 8-126, and amendments
1918	1918	thereto, and is equipped with a bed or cargo box for hauling materials, and
1919	1919	shall also include machinery and equipment used in the operation of
1920	1920	Christmas tree farming but shall not include any passenger vehicle, truck,
1921	1921	truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as
1922	1922	such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm
1923	1923	machinery and equipment" includes precision farming equipment that is
1924	1924	portable or is installed or purchased to be installed on farm machinery and
1925	1925	equipment. "Precision farming equipment" includes the following items
1926	1926	used only in computer-assisted farming, ranching or aquaculture
1927	1927	production operations: Soil testing sensors, yield monitors, computers,
1928	1928	monitors, software, global positioning and mapping systems, guiding
1929	1929	1
1930	1930	2
1931	1931	3
1932	1932	4
1933	1933	5
1934	1934	6
1935	1935	7
1936	1936	8
1937	1937	9
1938	1938	10
1939	1939	11
1940	1940	12
1941	1941	13
1942	1942	14
1943	1943	15
1944	1944	16
1945	1945	17
1946	1946	18
1947	1947	19
1948	1948	20
1949	1949	21
1950	1950	22
1951	1951	23
1952	1952	24
1953	1953	25
1954	1954	26
1955	1955	27
1956	1956	28
1957	1957	29
1958	1958	30
1959	1959	31
1960	1960	32
1961	1961	33
1962	1962	34
1963	1963	35
1964	1964	36
1965	1965	37
1966	1966	38
1967	1967	39
1968	1968	40
1969	1969	41
1970	1970	42
1971	1971	43 SB 91 24
1972	1972	systems, modems, data communications equipment and any necessary
1973	1973	mounting hardware, wiring and antennas. Each purchaser of farm
1974	1974	machinery and equipment or aquaculture machinery and equipment
1975	1975	exempted herein must certify in writing on the copy of the invoice or sales
1976	1976	ticket to be retained by the seller that the farm machinery and equipment
1977	1977	or aquaculture machinery and equipment purchased will be used only in
1978	1978	farming, ranching or aquaculture production. Farming or ranching shall
1979	1979	include the operation of a feedlot and farm and ranch work for hire and the
1980	1980	operation of a nursery;
1981	1981	(u) all leases or rentals of tangible personal property used as a
1982	1982	dwelling if such tangible personal property is leased or rented for a period
1983	1983	of more than 28 consecutive days;
1984	1984	(v) all sales of tangible personal property to any contractor for use in
1985	1985	preparing meals for delivery to homebound elderly persons over 60 years
1986	1986	of age and to homebound disabled persons or to be served at a group-
1987	1987	sitting at a location outside of the home to otherwise homebound elderly
1988	1988	persons over 60 years of age and to otherwise homebound disabled
1989	1989	persons, as all or part of any food service project funded in whole or in
1990	1990	part by government or as part of a private nonprofit food service project
1991	1991	available to all such elderly or disabled persons residing within an area of
1992	1992	service designated by the private nonprofit organization, and all sales of
1993	1993	tangible personal property for use in preparing meals for consumption by
1994	1994	indigent or homeless individuals whether or not such meals are consumed
1995	1995	at a place designated for such purpose, and all sales of food products by or
1996	1996	on behalf of any such contractor or organization for any such purpose;
1997	1997	(w) all sales of natural gas, electricity, heat and water delivered
1998	1998	through mains, lines or pipes: (1) To residential premises for
1999	1999	noncommercial use by the occupant of such premises; (2) for agricultural
2000	2000	use and also, for such use, all sales of propane gas; (3) for use in the
2001	2001	severing of oil; and (4) to any property which is exempt from property
2002	2002	taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this
2003	2003	paragraph, "severing" means the same as defined in K.S.A. 79-4216(k),
2004	2004	and amendments thereto. For all sales of natural gas, electricity and heat
2005	2005	delivered through mains, lines or pipes pursuant to the provisions of
2006	2006	subsection (w)(1) and (w)(2), the provisions of this subsection shall expire
2007	2007	on December 31, 2005;
2008	2008	(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
2009	2009	for the production of heat or lighting for noncommercial use of an
2010	2010	occupant of residential premises occurring prior to January 1, 2006;
2011	2011	(y) all sales of materials and services used in the repairing, servicing,
2012	2012	altering, maintaining, manufacturing, remanufacturing, or modification of
2013	2013	railroad rolling stock for use in interstate or foreign commerce under
2014	2014	authority of the laws of the United States;
2015	2015	1
2016	2016	2
2017	2017	3
2018	2018	4
2019	2019	5
2020	2020	6
2021	2021	7
2022	2022	8
2023	2023	9
2024	2024	10
2025	2025	11
2026	2026	12
2027	2027	13
2028	2028	14
2029	2029	15
2030	2030	16
2031	2031	17
2032	2032	18
2033	2033	19
2034	2034	20
2035	2035	21
2036	2036	22
2037	2037	23
2038	2038	24
2039	2039	25
2040	2040	26
2041	2041	27
2042	2042	28
2043	2043	29
2044	2044	30
2045	2045	31
2046	2046	32
2047	2047	33
2048	2048	34
2049	2049	35
2050	2050	36
2051	2051	37
2052	2052	38
2053	2053	39
2054	2054	40
2055	2055	41
2056	2056	42
2057	2057	43 SB 91 25
2058	2058	(z) all sales of tangible personal property and services purchased
2059	2059	directly by a port authority or by a contractor therefor as provided by the
2060	2060	provisions of K.S.A. 12-3418, and amendments thereto;
2061	2061	(aa) all sales of materials and services applied to equipment that is
2062	2062	transported into the state from without the state for repair, service,
2063	2063	alteration, maintenance, remanufacture or modification and that is
2064	2064	subsequently transported outside the state for use in the transmission of
2065	2065	liquids or natural gas by means of pipeline in interstate or foreign
2066	2066	commerce under authority of the laws of the United States;
2067	2067	(bb) all sales of used mobile homes or manufactured homes. As used
2068	2068	in this subsection: (1) "Mobile homes" and "manufactured homes" mean
2069	2069	the same as defined in K.S.A. 58-4202, and amendments thereto; and (2)
2070	2070	"sales of used mobile homes or manufactured homes" means sales other
2071	2071	than the original retail sale thereof;
2072	2072	(cc) all sales of tangible personal property or services purchased prior
2073	2073	to January 1, 2012, except as otherwise provided, for the purpose of and in
2074	2074	conjunction with constructing, reconstructing, enlarging or remodeling a
2075	2075	business or retail business that meets the requirements established in
2076	2076	K.S.A. 74-50,115, and amendments thereto, and the sale and installation of
2077	2077	machinery and equipment purchased for installation at any such business
2078	2078	or retail business, and all sales of tangible personal property or services
2079	2079	purchased on or after January 1, 2012, for the purpose of and in
2080	2080	conjunction with constructing, reconstructing, enlarging or remodeling a
2081	2081	business that meets the requirements established in K.S.A. 74-50,115(e),
2082	2082	and amendments thereto, and the sale and installation of machinery and
2083	2083	equipment purchased for installation at any such business. When a person
2084	2084	shall contract for the construction, reconstruction, enlargement or
2085	2085	remodeling of any such business or retail business, such person shall
2086	2086	obtain from the state and furnish to the contractor an exemption certificate
2087	2087	for the project involved, and the contractor may purchase materials,
2088	2088	machinery and equipment for incorporation in such project. The contractor
2089	2089	shall furnish the number of such certificates to all suppliers from whom
2090	2090	such purchases are made, and such suppliers shall execute invoices
2091	2091	covering the same bearing the number of such certificate. Upon
2092	2092	completion of the project the contractor shall furnish to the owner of the
2093	2093	business or retail business a sworn statement, on a form to be provided by
2094	2094	the director of taxation, that all purchases so made were entitled to
2095	2095	exemption under this subsection. All invoices shall be held by the
2096	2096	contractor for a period of five years and shall be subject to audit by the
2097	2097	director of taxation. Any contractor or any agent, employee or
2098	2098	subcontractor thereof, who shall use or otherwise dispose of any materials,
2099	2099	machinery or equipment purchased under such a certificate for any
2100	2100	purpose other than that for which such a certificate is issued without the
2101	2101	1
2102	2102	2
2103	2103	3
2104	2104	4
2105	2105	5
2106	2106	6
2107	2107	7
2108	2108	8
2109	2109	9
2110	2110	10
2111	2111	11
2112	2112	12
2113	2113	13
2114	2114	14
2115	2115	15
2116	2116	16
2117	2117	17
2118	2118	18
2119	2119	19
2120	2120	20
2121	2121	21
2122	2122	22
2123	2123	23
2124	2124	24
2125	2125	25
2126	2126	26
2127	2127	27
2128	2128	28
2129	2129	29
2130	2130	30
2131	2131	31
2132	2132	32
2133	2133	33
2134	2134	34
2135	2135	35
2136	2136	36
2137	2137	37
2138	2138	38
2139	2139	39
2140	2140	40
2141	2141	41
2142	2142	42
2143	2143	43 SB 91 26
2144	2144	payment of the sales or compensating tax otherwise imposed thereon, shall
2145	2145	be guilty of a misdemeanor and, upon conviction therefor, shall be subject
2146	2146	to the penalties provided for in K.S.A. 79-3615(h), and amendments
2147	2147	thereto. As used in this subsection, "business" and "retail business" mean
2148	2148	the same as defined in K.S.A. 74-50,114, and amendments thereto. Project
2149	2149	exemption certificates that have been previously issued under this
2150	2150	subsection by the department of revenue pursuant to K.S.A. 74-50,115,
2151	2151	and amendments thereto, but not including K.S.A. 74-50,115(e), and
2152	2152	amendments thereto, prior to January 1, 2012, and have not expired will be
2153	2153	effective for the term of the project or two years from the effective date of
2154	2154	the certificate, whichever occurs earlier. Project exemption certificates that
2155	2155	are submitted to the department of revenue prior to January 1, 2012, and
2156	2156	are found to qualify will be issued a project exemption certificate that will
2157	2157	be effective for a two-year period or for the term of the project, whichever
2158	2158	occurs earlier;
2159	2159	(dd) all sales of tangible personal property purchased with food
2160	2160	stamps issued by the United States department of agriculture;
2161	2161	(ee) all sales of lottery tickets and shares made as part of a lottery
2162	2162	operated by the state of Kansas;
2163	2163	(ff) on and after July 1, 1988, all sales of new mobile homes or
2164	2164	manufactured homes to the extent of 40% of the gross receipts, determined
2165	2165	without regard to any trade-in allowance, received from such sale. As used
2166	2166	in this subsection, "mobile homes" and "manufactured homes" mean the
2167	2167	same as defined in K.S.A. 58-4202, and amendments thereto;
2168	2168	(gg) all sales of tangible personal property purchased in accordance
2169	2169	with vouchers issued pursuant to the federal special supplemental food
2170	2170	program for women, infants and children;
2171	2171	(hh) all sales of medical supplies and equipment, including durable
2172	2172	medical equipment, purchased directly by a nonprofit skilled nursing home
2173	2173	or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
2174	2174	and amendments thereto, for the purpose of providing medical services to
2175	2175	residents thereof. This exemption shall not apply to tangible personal
2176	2176	property customarily used for human habitation purposes. As used in this
2177	2177	subsection, "durable medical equipment" means equipment including
2178	2178	repair and replacement parts for such equipment, that can withstand
2179	2179	repeated use, is primarily and customarily used to serve a medical purpose,
2180	2180	generally is not useful to a person in the absence of illness or injury and is
2181	2181	not worn in or on the body, but does not include mobility enhancing
2182	2182	equipment as defined in subsection (r), oxygen delivery equipment, kidney
2183	2183	dialysis equipment or enteral feeding systems;
2184	2184	(ii) all sales of tangible personal property purchased directly by a
2185	2185	nonprofit organization for nonsectarian comprehensive multidiscipline
2186	2186	youth development programs and activities provided or sponsored by such
2187	2187	1
2188	2188	2
2189	2189	3
2190	2190	4
2191	2191	5
2192	2192	6
2193	2193	7
2194	2194	8
2195	2195	9
2196	2196	10
2197	2197	11
2198	2198	12
2199	2199	13
2200	2200	14
2201	2201	15
2202	2202	16
2203	2203	17
2204	2204	18
2205	2205	19
2206	2206	20
2207	2207	21
2208	2208	22
2209	2209	23
2210	2210	24
2211	2211	25
2212	2212	26
2213	2213	27
2214	2214	28
2215	2215	29
2216	2216	30
2217	2217	31
2218	2218	32
2219	2219	33
2220	2220	34
2221	2221	35
2222	2222	36
2223	2223	37
2224	2224	38
2225	2225	39
2226	2226	40
2227	2227	41
2228	2228	42
2229	2229	43 SB 91 27
2230	2230	organization, and all sales of tangible personal property by or on behalf of
2231	2231	any such organization. This exemption shall not apply to tangible personal
2232	2232	property customarily used for human habitation purposes;
2233	2233	(jj) all sales of tangible personal property or services, including the
2234	2234	renting and leasing of tangible personal property, purchased directly on
2235	2235	behalf of a community-based facility for people with intellectual disability
2236	2236	or mental health center organized pursuant to K.S.A. 19-4001 et seq., and
2237	2237	amendments thereto, and licensed in accordance with the provisions of
2238	2238	K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible
2239	2239	personal property or services purchased by contractors during the time
2240	2240	period from July, 2003, through June, 2006, for the purpose of
2241	2241	constructing, equipping, maintaining or furnishing a new facility for a
2242	2242	community-based facility for people with intellectual disability or mental
2243	2243	health center located in Riverton, Cherokee County, Kansas, that would
2244	2244	have been eligible for sales tax exemption pursuant to this subsection if
2245	2245	purchased directly by such facility or center. This exemption shall not
2246	2246	apply to tangible personal property customarily used for human habitation
2247	2247	purposes;
2248	2248	(kk) (1) (A) all sales of machinery and equipment that are used in this
2249	2249	state as an integral or essential part of an integrated production operation
2250	2250	by a manufacturing or processing plant or facility;
2251	2251	(B) all sales of installation, repair and maintenance services
2252	2252	performed on such machinery and equipment; and
2253	2253	(C) all sales of repair and replacement parts and accessories
2254	2254	purchased for such machinery and equipment.
2255	2255	(2) For purposes of this subsection:
2256	2256	(A) "Integrated production operation" means an integrated series of
2257	2257	operations engaged in at a manufacturing or processing plant or facility to
2258	2258	process, transform or convert tangible personal property by physical,
2259	2259	chemical or other means into a different form, composition or character
2260	2260	from that in which it originally existed. Integrated production operations
2261	2261	shall include: (i) Production line operations, including packaging
2262	2262	operations; (ii) preproduction operations to handle, store and treat raw
2263	2263	materials; (iii) post production handling, storage, warehousing and
2264	2264	distribution operations; and (iv) waste, pollution and environmental
2265	2265	control operations, if any;
2266	2266	(B) "production line" means the assemblage of machinery and
2267	2267	equipment at a manufacturing or processing plant or facility where the
2268	2268	actual transformation or processing of tangible personal property occurs;
2269	2269	(C) "manufacturing or processing plant or facility" means a single,
2270	2270	fixed location owned or controlled by a manufacturing or processing
2271	2271	business that consists of one or more structures or buildings in a
2272	2272	contiguous area where integrated production operations are conducted to
2273	2273	1
2274	2274	2
2275	2275	3
2276	2276	4
2277	2277	5
2278	2278	6
2279	2279	7
2280	2280	8
2281	2281	9
2282	2282	10
2283	2283	11
2284	2284	12
2285	2285	13
2286	2286	14
2287	2287	15
2288	2288	16
2289	2289	17
2290	2290	18
2291	2291	19
2292	2292	20
2293	2293	21
2294	2294	22
2295	2295	23
2296	2296	24
2297	2297	25
2298	2298	26
2299	2299	27
2300	2300	28
2301	2301	29
2302	2302	30
2303	2303	31
2304	2304	32
2305	2305	33
2306	2306	34
2307	2307	35
2308	2308	36
2309	2309	37
2310	2310	38
2311	2311	39
2312	2312	40
2313	2313	41
2314	2314	42
2315	2315	43 SB 91 28
2316	2316	manufacture or process tangible personal property to be ultimately sold at
2317	2317	retail. Such term shall not include any facility primarily operated for the
2318	2318	purpose of conveying or assisting in the conveyance of natural gas,
2319	2319	electricity, oil or water. A business may operate one or more manufacturing
2320	2320	or processing plants or facilities at different locations to manufacture or
2321	2321	process a single product of tangible personal property to be ultimately sold
2322	2322	at retail;
2323	2323	(D) "manufacturing or processing business" means a business that
2324	2324	utilizes an integrated production operation to manufacture, process,
2325	2325	fabricate, finish or assemble items for wholesale and retail distribution as
2326	2326	part of what is commonly regarded by the general public as an industrial
2327	2327	manufacturing or processing operation or an agricultural commodity
2328	2328	processing operation. (i) Industrial manufacturing or processing operations
2329	2329	include, by way of illustration but not of limitation, the fabrication of
2330	2330	automobiles, airplanes, machinery or transportation equipment, the
2331	2331	fabrication of metal, plastic, wood or paper products, electricity power
2332	2332	generation, water treatment, petroleum refining, chemical production,
2333	2333	wholesale bottling, newspaper printing, ready mixed concrete production,
2334	2334	and the remanufacturing of used parts for wholesale or retail sale. Such
2335	2335	processing operations shall include operations at an oil well, gas well,
2336	2336	mine or other excavation site where the oil, gas, minerals, coal, clay, stone,
2337	2337	sand or gravel that has been extracted from the earth is cleaned, separated,
2338	2338	crushed, ground, milled, screened, washed or otherwise treated or prepared
2339	2339	before its transmission to a refinery or before any other wholesale or retail
2340	2340	distribution. (ii) Agricultural commodity processing operations include, by
2341	2341	way of illustration but not of limitation, meat packing, poultry slaughtering
2342	2342	and dressing, processing and packaging farm and dairy products in sealed
2343	2343	containers for wholesale and retail distribution, feed grinding, grain
2344	2344	milling, frozen food processing, and grain handling, cleaning, blending,
2345	2345	fumigation, drying and aeration operations engaged in by grain elevators
2346	2346	or other grain storage facilities. (iii) Manufacturing or processing
2347	2347	businesses do not include, by way of illustration but not of limitation,
2348	2348	nonindustrial businesses whose operations are primarily retail and that
2349	2349	produce or process tangible personal property as an incidental part of
2350	2350	conducting the retail business, such as retailers who bake, cook or prepare
2351	2351	food products in the regular course of their retail trade, grocery stores,
2352	2352	meat lockers and meat markets that butcher or dress livestock or poultry in
2353	2353	the regular course of their retail trade, contractors who alter, service, repair
2354	2354	or improve real property, and retail businesses that clean, service or
2355	2355	refurbish and repair tangible personal property for its owner;
2356	2356	(E) "repair and replacement parts and accessories" means all parts
2357	2357	and accessories for exempt machinery and equipment, including, but not
2358	2358	limited to, dies, jigs, molds, patterns and safety devices that are attached to
2359	2359	1
2360	2360	2
2361	2361	3
2362	2362	4
2363	2363	5
2364	2364	6
2365	2365	7
2366	2366	8
2367	2367	9
2368	2368	10
2369	2369	11
2370	2370	12
2371	2371	13
2372	2372	14
2373	2373	15
2374	2374	16
2375	2375	17
2376	2376	18
2377	2377	19
2378	2378	20
2379	2379	21
2380	2380	22
2381	2381	23
2382	2382	24
2383	2383	25
2384	2384	26
2385	2385	27
2386	2386	28
2387	2387	29
2388	2388	30
2389	2389	31
2390	2390	32
2391	2391	33
2392	2392	34
2393	2393	35
2394	2394	36
2395	2395	37
2396	2396	38
2397	2397	39
2398	2398	40
2399	2399	41
2400	2400	42
2401	2401	43 SB 91 29
2402	2402	exempt machinery or that are otherwise used in production, and parts and
2403	2403	accessories that require periodic replacement such as belts, drill bits,
2404	2404	grinding wheels, grinding balls, cutting bars, saws, refractory brick and
2405	2405	other refractory items for exempt kiln equipment used in production
2406	2406	operations;
2407	2407	(F) "primary" or "primarily" mean more than 50% of the time.
2408	2408	(3) For purposes of this subsection, machinery and equipment shall
2409	2409	be deemed to be used as an integral or essential part of an integrated
2410	2410	production operation when used to:
2411	2411	(A) Receive, transport, convey, handle, treat or store raw materials in
2412	2412	preparation of its placement on the production line;
2413	2413	(B) transport, convey, handle or store the property undergoing
2414	2414	manufacturing or processing at any point from the beginning of the
2415	2415	production line through any warehousing or distribution operation of the
2416	2416	final product that occurs at the plant or facility;
2417	2417	(C) act upon, effect, promote or otherwise facilitate a physical change
2418	2418	to the property undergoing manufacturing or processing;
2419	2419	(D) guide, control or direct the movement of property undergoing
2420	2420	manufacturing or processing;
2421	2421	(E) test or measure raw materials, the property undergoing
2422	2422	manufacturing or processing or the finished product, as a necessary part of
2423	2423	the manufacturer's integrated production operations;
2424	2424	(F) plan, manage, control or record the receipt and flow of inventories
2425	2425	of raw materials, consumables and component parts, the flow of the
2426	2426	property undergoing manufacturing or processing and the management of
2427	2427	inventories of the finished product;
2428	2428	(G) produce energy for, lubricate, control the operating of or
2429	2429	otherwise enable the functioning of other production machinery and
2430	2430	equipment and the continuation of production operations;
2431	2431	(H) package the property being manufactured or processed in a
2432	2432	container or wrapping in which such property is normally sold or
2433	2433	transported;
2434	2434	(I) transmit or transport electricity, coke, gas, water, steam or similar
2435	2435	substances used in production operations from the point of generation, if
2436	2436	produced by the manufacturer or processor at the plant site, to that
2437	2437	manufacturer's production operation; or, if purchased or delivered from
2438	2438	off-site, from the point where the substance enters the site of the plant or
2439	2439	facility to that manufacturer's production operations;
2440	2440	(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil,
2441	2441	solvents or other substances that are used in production operations;
2442	2442	(K) provide and control an environment required to maintain certain
2443	2443	levels of air quality, humidity or temperature in special and limited areas
2444	2444	of the plant or facility, where such regulation of temperature or humidity is
2445	2445	1
2446	2446	2
2447	2447	3
2448	2448	4
2449	2449	5
2450	2450	6
2451	2451	7
2452	2452	8
2453	2453	9
2454	2454	10
2455	2455	11
2456	2456	12
2457	2457	13
2458	2458	14
2459	2459	15
2460	2460	16
2461	2461	17
2462	2462	18
2463	2463	19
2464	2464	20
2465	2465	21
2466	2466	22
2467	2467	23
2468	2468	24
2469	2469	25
2470	2470	26
2471	2471	27
2472	2472	28
2473	2473	29
2474	2474	30
2475	2475	31
2476	2476	32
2477	2477	33
2478	2478	34
2479	2479	35
2480	2480	36
2481	2481	37
2482	2482	38
2483	2483	39
2484	2484	40
2485	2485	41
2486	2486	42
2487	2487	43 SB 91 30
2488	2488	part of and essential to the production process;
2489	2489	(L) treat, transport or store waste or other byproducts of production
2490	2490	operations at the plant or facility; or
2491	2491	(M) control pollution at the plant or facility where the pollution is
2492	2492	produced by the manufacturing or processing operation.
2493	2493	(4) The following machinery, equipment and materials shall be
2494	2494	deemed to be exempt even though it may not otherwise qualify as
2495	2495	machinery and equipment used as an integral or essential part of an
2496	2496	integrated production operation: (A) Computers and related peripheral
2497	2497	equipment that are utilized by a manufacturing or processing business for
2498	2498	engineering of the finished product or for research and development or
2499	2499	product design; (B) machinery and equipment that is utilized by a
2500	2500	manufacturing or processing business to manufacture or rebuild tangible
2501	2501	personal property that is used in manufacturing or processing operations,
2502	2502	including tools, dies, molds, forms and other parts of qualifying machinery
2503	2503	and equipment; (C) portable plants for aggregate concrete, bulk cement
2504	2504	and asphalt including cement mixing drums to be attached to a motor
2505	2505	vehicle; (D) industrial fixtures, devices, support facilities and special
2506	2506	foundations necessary for manufacturing and production operations, and
2507	2507	materials and other tangible personal property sold for the purpose of
2508	2508	fabricating such fixtures, devices, facilities and foundations. An exemption
2509	2509	certificate for such purchases shall be signed by the manufacturer or
2510	2510	processor. If the fabricator purchases such material, the fabricator shall
2511	2511	also sign the exemption certificate; (E) a manufacturing or processing
2512	2512	business' laboratory equipment that is not located at the plant or facility,
2513	2513	but that would otherwise qualify for exemption under subsection (3)(E);
2514	2514	(F) all machinery and equipment used in surface mining activities as
2515	2515	described in K.S.A. 49-601 et seq., and amendments thereto, beginning
2516	2516	from the time a reclamation plan is filed to the acceptance of the
2517	2517	completed final site reclamation.
2518	2518	(5) "Machinery and equipment used as an integral or essential part of
2519	2519	an integrated production operation" shall not include:
2520	2520	(A) Machinery and equipment used for nonproduction purposes,
2521	2521	including, but not limited to, machinery and equipment used for plant
2522	2522	security, fire prevention, first aid, accounting, administration, record
2523	2523	keeping, advertising, marketing, sales or other related activities, plant
2524	2524	cleaning, plant communications and employee work scheduling;
2525	2525	(B) machinery, equipment and tools used primarily in maintaining
2526	2526	and repairing any type of machinery and equipment or the building and
2527	2527	plant;
2528	2528	(C) transportation, transmission and distribution equipment not
2529	2529	primarily used in a production, warehousing or material handling
2530	2530	operation at the plant or facility, including the means of conveyance of
2531	2531	1
2532	2532	2
2533	2533	3
2534	2534	4
2535	2535	5
2536	2536	6
2537	2537	7
2538	2538	8
2539	2539	9
2540	2540	10
2541	2541	11
2542	2542	12
2543	2543	13
2544	2544	14
2545	2545	15
2546	2546	16
2547	2547	17
2548	2548	18
2549	2549	19
2550	2550	20
2551	2551	21
2552	2552	22
2553	2553	23
2554	2554	24
2555	2555	25
2556	2556	26
2557	2557	27
2558	2558	28
2559	2559	29
2560	2560	30
2561	2561	31
2562	2562	32
2563	2563	33
2564	2564	34
2565	2565	35
2566	2566	36
2567	2567	37
2568	2568	38
2569	2569	39
2570	2570	40
2571	2571	41
2572	2572	42
2573	2573	43 SB 91 31
2574	2574	natural gas, electricity, oil or water, and equipment related thereto, located
2575	2575	outside the plant or facility;
2576	2576	(D) office machines and equipment including computers and related
2577	2577	peripheral equipment not used directly and primarily to control or measure
2578	2578	the manufacturing process;
2579	2579	(E) furniture and other furnishings;
2580	2580	(F) buildings, other than exempt machinery and equipment that is
2581	2581	permanently affixed to or becomes a physical part of the building, and any
2582	2582	other part of real estate that is not otherwise exempt;
2583	2583	(G) building fixtures that are not integral to the manufacturing
2584	2584	operation, such as utility systems for heating, ventilation, air conditioning,
2585	2585	communications, plumbing or electrical;
2586	2586	(H) machinery and equipment used for general plant heating, cooling
2587	2587	and lighting;
2588	2588	(I) motor vehicles that are registered for operation on public
2589	2589	highways; or
2590	2590	(J) employee apparel, except safety and protective apparel that is
2591	2591	purchased by an employer and furnished gratuitously to employees who
2592	2592	are involved in production or research activities.
2593	2593	(6) Paragraphs (3) and (5) shall not be construed as exclusive listings
2594	2594	of the machinery and equipment that qualify or do not qualify as an
2595	2595	integral or essential part of an integrated production operation. When
2596	2596	machinery or equipment is used as an integral or essential part of
2597	2597	production operations part of the time and for nonproduction purposes at
2598	2598	other times, the primary use of the machinery or equipment shall
2599	2599	determine whether or not such machinery or equipment qualifies for
2600	2600	exemption.
2601	2601	(7) The secretary of revenue shall adopt rules and regulations
2602	2602	necessary to administer the provisions of this subsection;
2603	2603	(ll) all sales of educational materials purchased for distribution to the
2604	2604	public at no charge by a nonprofit corporation organized for the purpose of
2605	2605	encouraging, fostering and conducting programs for the improvement of
2606	2606	public health, except that for taxable years commencing after December
2607	2607	31, 2013, this subsection shall not apply to any sales of such materials
2608	2608	purchased by a nonprofit corporation which performs any abortion, as
2609	2609	defined in K.S.A. 65-6701, and amendments thereto;
2610	2610	(mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
2611	2611	herbicides, germicides, pesticides and fungicides; and services, purchased
2612	2612	and used for the purpose of producing plants in order to prevent soil
2613	2613	erosion on land devoted to agricultural use;
2614	2614	(nn) except as otherwise provided in this act, all sales of services
2615	2615	rendered by an advertising agency or licensed broadcast station or any
2616	2616	member, agent or employee thereof;
2617	2617	1
2618	2618	2
2619	2619	3
2620	2620	4
2621	2621	5
2622	2622	6
2623	2623	7
2624	2624	8
2625	2625	9
2626	2626	10
2627	2627	11
2628	2628	12
2629	2629	13
2630	2630	14
2631	2631	15
2632	2632	16
2633	2633	17
2634	2634	18
2635	2635	19
2636	2636	20
2637	2637	21
2638	2638	22
2639	2639	23
2640	2640	24
2641	2641	25
2642	2642	26
2643	2643	27
2644	2644	28
2645	2645	29
2646	2646	30
2647	2647	31
2648	2648	32
2649	2649	33
2650	2650	34
2651	2651	35
2652	2652	36
2653	2653	37
2654	2654	38
2655	2655	39
2656	2656	40
2657	2657	41
2658	2658	42
2659	2659	43 SB 91 32
2660	2660	(oo) all sales of tangible personal property purchased by a community
2661	2661	action group or agency for the exclusive purpose of repairing or
2662	2662	weatherizing housing occupied by low-income individuals;
2663	2663	(pp) all sales of drill bits and explosives actually utilized in the
2664	2664	exploration and production of oil or gas;
2665	2665	(qq) all sales of tangible personal property and services purchased by
2666	2666	a nonprofit museum or historical society or any combination thereof,
2667	2667	including a nonprofit organization that is organized for the purpose of
2668	2668	stimulating public interest in the exploration of space by providing
2669	2669	educational information, exhibits and experiences, that is exempt from
2670	2670	federal income taxation pursuant to section 501(c)(3) of the federal
2671	2671	internal revenue code of 1986;
2672	2672	(rr) all sales of tangible personal property that will admit the
2673	2673	purchaser thereof to any annual event sponsored by a nonprofit
2674	2674	organization that is exempt from federal income taxation pursuant to
2675	2675	section 501(c)(3) of the federal internal revenue code of 1986, except that
2676	2676	for taxable years commencing after December 31, 2013, this subsection
2677	2677	shall not apply to any sales of such tangible personal property purchased
2678	2678	by a nonprofit organization which performs any abortion, as defined in
2679	2679	K.S.A. 65-6701, and amendments thereto;
2680	2680	(ss) all sales of tangible personal property and services purchased by
2681	2681	a public broadcasting station licensed by the federal communications
2682	2682	commission as a noncommercial educational television or radio station;
2683	2683	(tt) all sales of tangible personal property and services purchased by
2684	2684	or on behalf of a not-for-profit corporation that is exempt from federal
2685	2685	income taxation pursuant to section 501(c)(3) of the federal internal
2686	2686	revenue code of 1986, for the sole purpose of constructing a Kansas
2687	2687	Korean War memorial;
2688	2688	(uu) all sales of tangible personal property and services purchased by
2689	2689	or on behalf of any rural volunteer fire-fighting organization for use
2690	2690	exclusively in the performance of its duties and functions;
2691	2691	(vv) all sales of tangible personal property purchased by any of the
2692	2692	following organizations that are exempt from federal income taxation
2693	2693	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
2694	2694	for the following purposes, and all sales of any such property by or on
2695	2695	behalf of any such organization for any such purpose:
2696	2696	(1) The American heart association, Kansas affiliate, inc. for the
2697	2697	purposes of providing education, training, certification in emergency
2698	2698	cardiac care, research and other related services to reduce disability and
2699	2699	death from cardiovascular diseases and stroke;
2700	2700	(2) the Kansas alliance for the mentally ill, inc. for the purpose of
2701	2701	advocacy for persons with mental illness and to education, research and
2702	2702	support for their families;
2703	2703	1
2704	2704	2
2705	2705	3
2706	2706	4
2707	2707	5
2708	2708	6
2709	2709	7
2710	2710	8
2711	2711	9
2712	2712	10
2713	2713	11
2714	2714	12
2715	2715	13
2716	2716	14
2717	2717	15
2718	2718	16
2719	2719	17
2720	2720	18
2721	2721	19
2722	2722	20
2723	2723	21
2724	2724	22
2725	2725	23
2726	2726	24
2727	2727	25
2728	2728	26
2729	2729	27
2730	2730	28
2731	2731	29
2732	2732	30
2733	2733	31
2734	2734	32
2735	2735	33
2736	2736	34
2737	2737	35
2738	2738	36
2739	2739	37
2740	2740	38
2741	2741	39
2742	2742	40
2743	2743	41
2744	2744	42
2745	2745	43 SB 91 33
2746	2746	(3) the Kansas mental illness awareness council for the purposes of
2747	2747	advocacy for persons who are mentally ill and for education, research and
2748	2748	support for them and their families;
2749	2749	(4) the American diabetes association Kansas affiliate, inc. for the
2750	2750	purpose of eliminating diabetes through medical research, public education
2751	2751	focusing on disease prevention and education, patient education including
2752	2752	information on coping with diabetes, and professional education and
2753	2753	training;
2754	2754	(5) the American lung association of Kansas, inc. for the purpose of
2755	2755	eliminating all lung diseases through medical research, public education
2756	2756	including information on coping with lung diseases, professional education
2757	2757	and training related to lung disease and other related services to reduce the
2758	2758	incidence of disability and death due to lung disease;
2759	2759	(6) the Kansas chapters of the Alzheimer's disease and related
2760	2760	disorders association, inc. for the purpose of providing assistance and
2761	2761	support to persons in Kansas with Alzheimer's disease, and their families
2762	2762	and caregivers;
2763	2763	(7) the Kansas chapters of the Parkinson's disease association for the
2764	2764	purpose of eliminating Parkinson's disease through medical research and
2765	2765	public and professional education related to such disease;
2766	2766	(8) the national kidney foundation of Kansas and western Missouri
2767	2767	for the purpose of eliminating kidney disease through medical research
2768	2768	and public and private education related to such disease;
2769	2769	(9) the heartstrings community foundation for the purpose of
2770	2770	providing training, employment and activities for adults with
2771	2771	developmental disabilities;
2772	2772	(10) the cystic fibrosis foundation, heart of America chapter, for the
2773	2773	purposes of assuring the development of the means to cure and control
2774	2774	cystic fibrosis and improving the quality of life for those with the disease;
2775	2775	(11) the spina bifida association of Kansas for the purpose of
2776	2776	providing financial, educational and practical aid to families and
2777	2777	individuals with spina bifida. Such aid includes, but is not limited to,
2778	2778	funding for medical devices, counseling and medical educational
2779	2779	opportunities;
2780	2780	(12) the CHWC, Inc., for the purpose of rebuilding urban core
2781	2781	neighborhoods through the construction of new homes, acquiring and
2782	2782	renovating existing homes and other related activities, and promoting
2783	2783	economic development in such neighborhoods;
2784	2784	(13) the cross-lines cooperative council for the purpose of providing
2785	2785	social services to low income individuals and families;
2786	2786	(14) the dreams work, inc., for the purpose of providing young adult
2787	2787	day services to individuals with developmental disabilities and assisting
2788	2788	families in avoiding institutional or nursing home care for a
2789	2789	1
2790	2790	2
2791	2791	3
2792	2792	4
2793	2793	5
2794	2794	6
2795	2795	7
2796	2796	8
2797	2797	9
2798	2798	10
2799	2799	11
2800	2800	12
2801	2801	13
2802	2802	14
2803	2803	15
2804	2804	16
2805	2805	17
2806	2806	18
2807	2807	19
2808	2808	20
2809	2809	21
2810	2810	22
2811	2811	23
2812	2812	24
2813	2813	25
2814	2814	26
2815	2815	27
2816	2816	28
2817	2817	29
2818	2818	30
2819	2819	31
2820	2820	32
2821	2821	33
2822	2822	34
2823	2823	35
2824	2824	36
2825	2825	37
2826	2826	38
2827	2827	39
2828	2828	40
2829	2829	41
2830	2830	42
2831	2831	43 SB 91 34
2832	2832	developmentally disabled member of their family;
2833	2833	(15) the KSDS, Inc., for the purpose of promoting the independence
2834	2834	and inclusion of people with disabilities as fully participating and
2835	2835	contributing members of their communities and society through the
2836	2836	training and providing of guide and service dogs to people with
2837	2837	disabilities, and providing disability education and awareness to the
2838	2838	general public;
2839	2839	(16) the lyme association of greater Kansas City, Inc., for the purpose
2840	2840	of providing support to persons with lyme disease and public education
2841	2841	relating to the prevention, treatment and cure of lyme disease;
2842	2842	(17) the dream factory, inc., for the purpose of granting the dreams of
2843	2843	children with critical and chronic illnesses;
2844	2844	(18) the Ottawa Suzuki strings, inc., for the purpose of providing
2845	2845	students and families with education and resources necessary to enable
2846	2846	each child to develop fine character and musical ability to the fullest
2847	2847	potential;
2848	2848	(19) the international association of lions clubs for the purpose of
2849	2849	creating and fostering a spirit of understanding among all people for
2850	2850	humanitarian needs by providing voluntary services through community
2851	2851	involvement and international cooperation;
2852	2852	(20) the Johnson county young matrons, inc., for the purpose of
2853	2853	promoting a positive future for members of the community through
2854	2854	volunteerism, financial support and education through the efforts of an all
2855	2855	volunteer organization;
2856	2856	(21) the American cancer society, inc., for the purpose of eliminating
2857	2857	cancer as a major health problem by preventing cancer, saving lives and
2858	2858	diminishing suffering from cancer, through research, education, advocacy
2859	2859	and service;
2860	2860	(22) the community services of Shawnee, inc., for the purpose of
2861	2861	providing food and clothing to those in need;
2862	2862	(23) the angel babies association, for the purpose of providing
2863	2863	assistance, support and items of necessity to teenage mothers and their
2864	2864	babies; and
2865	2865	(24) the Kansas fairgrounds foundation for the purpose of the
2866	2866	preservation, renovation and beautification of the Kansas state fairgrounds;
2867	2867	(ww) all sales of tangible personal property purchased by the habitat
2868	2868	for humanity for the exclusive use of being incorporated within a housing
2869	2869	project constructed by such organization;
2870	2870	(xx) all sales of tangible personal property and services purchased by
2871	2871	a nonprofit zoo that is exempt from federal income taxation pursuant to
2872	2872	section 501(c)(3) of the federal internal revenue code of 1986, or on behalf
2873	2873	of such zoo by an entity itself exempt from federal income taxation
2874	2874	pursuant to section 501(c)(3) of the federal internal revenue code of 1986
2875	2875	1
2876	2876	2
2877	2877	3
2878	2878	4
2879	2879	5
2880	2880	6
2881	2881	7
2882	2882	8
2883	2883	9
2884	2884	10
2885	2885	11
2886	2886	12
2887	2887	13
2888	2888	14
2889	2889	15
2890	2890	16
2891	2891	17
2892	2892	18
2893	2893	19
2894	2894	20
2895	2895	21
2896	2896	22
2897	2897	23
2898	2898	24
2899	2899	25
2900	2900	26
2901	2901	27
2902	2902	28
2903	2903	29
2904	2904	30
2905	2905	31
2906	2906	32
2907	2907	33
2908	2908	34
2909	2909	35
2910	2910	36
2911	2911	37
2912	2912	38
2913	2913	39
2914	2914	40
2915	2915	41
2916	2916	42
2917	2917	43 SB 91 35
2918	2918	contracted with to operate such zoo and all sales of tangible personal
2919	2919	property or services purchased by a contractor for the purpose of
2920	2920	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
2921	2921	furnishing or remodeling facilities for any nonprofit zoo that would be
2922	2922	exempt from taxation under the provisions of this section if purchased
2923	2923	directly by such nonprofit zoo or the entity operating such zoo. Nothing in
2924	2924	this subsection shall be deemed to exempt the purchase of any construction
2925	2925	machinery, equipment or tools used in the constructing, equipping,
2926	2926	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
2927	2927	facilities for any nonprofit zoo. When any nonprofit zoo shall contract for
2928	2928	the purpose of constructing, equipping, reconstructing, maintaining,
2929	2929	repairing, enlarging, furnishing or remodeling facilities, it shall obtain
2930	2930	from the state and furnish to the contractor an exemption certificate for the
2931	2931	project involved, and the contractor may purchase materials for
2932	2932	incorporation in such project. The contractor shall furnish the number of
2933	2933	such certificate to all suppliers from whom such purchases are made, and
2934	2934	such suppliers shall execute invoices covering the same bearing the
2935	2935	number of such certificate. Upon completion of the project the contractor
2936	2936	shall furnish to the nonprofit zoo concerned a sworn statement, on a form
2937	2937	to be provided by the director of taxation, that all purchases so made were
2938	2938	entitled to exemption under this subsection. All invoices shall be held by
2939	2939	the contractor for a period of five years and shall be subject to audit by the
2940	2940	director of taxation. If any materials purchased under such a certificate are
2941	2941	found not to have been incorporated in the building or other project or not
2942	2942	to have been returned for credit or the sales or compensating tax otherwise
2943	2943	imposed upon such materials that will not be so incorporated in the
2944	2944	building or other project reported and paid by such contractor to the
2945	2945	director of taxation not later than the 20
2946	2946	th
2947	2947	day of the month following the
2948	2948	close of the month in which it shall be determined that such materials will
2949	2949	not be used for the purpose for which such certificate was issued, the
2950	2950	nonprofit zoo concerned shall be liable for tax on all materials purchased
2951	2951	for the project, and upon payment thereof it may recover the same from
2952	2952	the contractor together with reasonable attorney fees. Any contractor or
2953	2953	any agent, employee or subcontractor thereof, who shall use or otherwise
2954	2954	dispose of any materials purchased under such a certificate for any purpose
2955	2955	other than that for which such a certificate is issued without the payment
2956	2956	of the sales or compensating tax otherwise imposed upon such materials,
2957	2957	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
2958	2958	subject to the penalties provided for in K.S.A. 79-3615(h), and
2959	2959	amendments thereto;
2960	2960	(yy) all sales of tangible personal property and services purchased by
2961	2961	a parent-teacher association or organization, and all sales of tangible
2962	2962	personal property by or on behalf of such association or organization;
2963	2963	1
2964	2964	2
2965	2965	3
2966	2966	4
2967	2967	5
2968	2968	6
2969	2969	7
2970	2970	8
2971	2971	9
2972	2972	10
2973	2973	11
2974	2974	12
2975	2975	13
2976	2976	14
2977	2977	15
2978	2978	16
2979	2979	17
2980	2980	18
2981	2981	19
2982	2982	20
2983	2983	21
2984	2984	22
2985	2985	23
2986	2986	24
2987	2987	25
2988	2988	26
2989	2989	27
2990	2990	28
2991	2991	29
2992	2992	30
2993	2993	31
2994	2994	32
2995	2995	33
2996	2996	34
2997	2997	35
2998	2998	36
2999	2999	37
3000	3000	38
3001	3001	39
3002	3002	40
3003	3003	41
3004	3004	42
3005	3005	43 SB 91 36
3006	3006	(zz) all sales of machinery and equipment purchased by over-the-air,
3007	3007	free access radio or television station that is used directly and primarily for
3008	3008	the purpose of producing a broadcast signal or is such that the failure of
3009	3009	the machinery or equipment to operate would cause broadcasting to cease.
3010	3010	For purposes of this subsection, machinery and equipment shall include,
3011	3011	but not be limited to, that required by rules and regulations of the federal
3012	3012	communications commission, and all sales of electricity which are
3013	3013	essential or necessary for the purpose of producing a broadcast signal or is
3014	3014	such that the failure of the electricity would cause broadcasting to cease;
3015	3015	(aaa) all sales of tangible personal property and services purchased by
3016	3016	a religious organization that is exempt from federal income taxation
3017	3017	pursuant to section 501(c)(3) of the federal internal revenue code, and used
3018	3018	exclusively for religious purposes, and all sales of tangible personal
3019	3019	property or services purchased by a contractor for the purpose of
3020	3020	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
3021	3021	furnishing or remodeling facilities for any such organization that would be
3022	3022	exempt from taxation under the provisions of this section if purchased
3023	3023	directly by such organization. Nothing in this subsection shall be deemed
3024	3024	to exempt the purchase of any construction machinery, equipment or tools
3025	3025	used in the constructing, equipping, reconstructing, maintaining, repairing,
3026	3026	enlarging, furnishing or remodeling facilities for any such organization.
3027	3027	When any such organization shall contract for the purpose of constructing,
3028	3028	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3029	3029	remodeling facilities, it shall obtain from the state and furnish to the
3030	3030	contractor an exemption certificate for the project involved, and the
3031	3031	contractor may purchase materials for incorporation in such project. The
3032	3032	contractor shall furnish the number of such certificate to all suppliers from
3033	3033	whom such purchases are made, and such suppliers shall execute invoices
3034	3034	covering the same bearing the number of such certificate. Upon
3035	3035	completion of the project the contractor shall furnish to such organization
3036	3036	concerned a sworn statement, on a form to be provided by the director of
3037	3037	taxation, that all purchases so made were entitled to exemption under this
3038	3038	subsection. All invoices shall be held by the contractor for a period of five
3039	3039	years and shall be subject to audit by the director of taxation. If any
3040	3040	materials purchased under such a certificate are found not to have been
3041	3041	incorporated in the building or other project or not to have been returned
3042	3042	for credit or the sales or compensating tax otherwise imposed upon such
3043	3043	materials that will not be so incorporated in the building or other project
3044	3044	reported and paid by such contractor to the director of taxation not later
3045	3045	than the 20
3046	3046	th
3047	3047	day of the month following the close of the month in which it
3048	3048	shall be determined that such materials will not be used for the purpose for
3049	3049	which such certificate was issued, such organization concerned shall be
3050	3050	liable for tax on all materials purchased for the project, and upon payment
3051	3051	1
3052	3052	2
3053	3053	3
3054	3054	4
3055	3055	5
3056	3056	6
3057	3057	7
3058	3058	8
3059	3059	9
3060	3060	10
3061	3061	11
3062	3062	12
3063	3063	13
3064	3064	14
3065	3065	15
3066	3066	16
3067	3067	17
3068	3068	18
3069	3069	19
3070	3070	20
3071	3071	21
3072	3072	22
3073	3073	23
3074	3074	24
3075	3075	25
3076	3076	26
3077	3077	27
3078	3078	28
3079	3079	29
3080	3080	30
3081	3081	31
3082	3082	32
3083	3083	33
3084	3084	34
3085	3085	35
3086	3086	36
3087	3087	37
3088	3088	38
3089	3089	39
3090	3090	40
3091	3091	41
3092	3092	42
3093	3093	43 SB 91 37
3094	3094	thereof it may recover the same from the contractor together with
3095	3095	reasonable attorney fees. Any contractor or any agent, employee or
3096	3096	subcontractor thereof, who shall use or otherwise dispose of any materials
3097	3097	purchased under such a certificate for any purpose other than that for
3098	3098	which such a certificate is issued without the payment of the sales or
3099	3099	compensating tax otherwise imposed upon such materials, shall be guilty
3100	3100	of a misdemeanor and, upon conviction therefor, shall be subject to the
3101	3101	penalties provided for in K.S.A. 79-3615(h), and amendments thereto.
3102	3102	Sales tax paid on and after July 1, 1998, but prior to the effective date of
3103	3103	this act upon the gross receipts received from any sale exempted by the
3104	3104	amendatory provisions of this subsection shall be refunded. Each claim for
3105	3105	a sales tax refund shall be verified and submitted to the director of taxation
3106	3106	upon forms furnished by the director and shall be accompanied by any
3107	3107	additional documentation required by the director. The director shall
3108	3108	review each claim and shall refund that amount of sales tax paid as
3109	3109	determined under the provisions of this subsection. All refunds shall be
3110	3110	paid from the sales tax refund fund upon warrants of the director of
3111	3111	accounts and reports pursuant to vouchers approved by the director or the
3112	3112	director's designee;
3113	3113	(bbb) all sales of food for human consumption by an organization that
3114	3114	is exempt from federal income taxation pursuant to section 501(c)(3) of
3115	3115	the federal internal revenue code of 1986, pursuant to a food distribution
3116	3116	program that offers such food at a price below cost in exchange for the
3117	3117	performance of community service by the purchaser thereof;
3118	3118	(ccc) on and after July 1, 1999, all sales of tangible personal property
3119	3119	and services purchased by a primary care clinic or health center the
3120	3120	primary purpose of which is to provide services to medically underserved
3121	3121	individuals and families, and that is exempt from federal income taxation
3122	3122	pursuant to section 501(c)(3) of the federal internal revenue code, and all
3123	3123	sales of tangible personal property or services purchased by a contractor
3124	3124	for the purpose of constructing, equipping, reconstructing, maintaining,
3125	3125	repairing, enlarging, furnishing or remodeling facilities for any such clinic
3126	3126	or center that would be exempt from taxation under the provisions of this
3127	3127	section if purchased directly by such clinic or center, except that for
3128	3128	taxable years commencing after December 31, 2013, this subsection shall
3129	3129	not apply to any sales of such tangible personal property and services
3130	3130	purchased by a primary care clinic or health center which performs any
3131	3131	abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing
3132	3132	in this subsection shall be deemed to exempt the purchase of any
3133	3133	construction machinery, equipment or tools used in the constructing,
3134	3134	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3135	3135	remodeling facilities for any such clinic or center. When any such clinic or
3136	3136	center shall contract for the purpose of constructing, equipping,
3137	3137	1
3138	3138	2
3139	3139	3
3140	3140	4
3141	3141	5
3142	3142	6
3143	3143	7
3144	3144	8
3145	3145	9
3146	3146	10
3147	3147	11
3148	3148	12
3149	3149	13
3150	3150	14
3151	3151	15
3152	3152	16
3153	3153	17
3154	3154	18
3155	3155	19
3156	3156	20
3157	3157	21
3158	3158	22
3159	3159	23
3160	3160	24
3161	3161	25
3162	3162	26
3163	3163	27
3164	3164	28
3165	3165	29
3166	3166	30
3167	3167	31
3168	3168	32
3169	3169	33
3170	3170	34
3171	3171	35
3172	3172	36
3173	3173	37
3174	3174	38
3175	3175	39
3176	3176	40
3177	3177	41
3178	3178	42
3179	3179	43 SB 91 38
3180	3180	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3181	3181	facilities, it shall obtain from the state and furnish to the contractor an
3182	3182	exemption certificate for the project involved, and the contractor may
3183	3183	purchase materials for incorporation in such project. The contractor shall
3184	3184	furnish the number of such certificate to all suppliers from whom such
3185	3185	purchases are made, and such suppliers shall execute invoices covering the
3186	3186	same bearing the number of such certificate. Upon completion of the
3187	3187	project the contractor shall furnish to such clinic or center concerned a
3188	3188	sworn statement, on a form to be provided by the director of taxation, that
3189	3189	all purchases so made were entitled to exemption under this subsection.
3190	3190	All invoices shall be held by the contractor for a period of five years and
3191	3191	shall be subject to audit by the director of taxation. If any materials
3192	3192	purchased under such a certificate are found not to have been incorporated
3193	3193	in the building or other project or not to have been returned for credit or
3194	3194	the sales or compensating tax otherwise imposed upon such materials that
3195	3195	will not be so incorporated in the building or other project reported and
3196	3196	paid by such contractor to the director of taxation not later than the 20
3197	3197	th
3198	3198	day of the month following the close of the month in which it shall be
3199	3199	determined that such materials will not be used for the purpose for which
3200	3200	such certificate was issued, such clinic or center concerned shall be liable
3201	3201	for tax on all materials purchased for the project, and upon payment
3202	3202	thereof it may recover the same from the contractor together with
3203	3203	reasonable attorney fees. Any contractor or any agent, employee or
3204	3204	subcontractor thereof, who shall use or otherwise dispose of any materials
3205	3205	purchased under such a certificate for any purpose other than that for
3206	3206	which such a certificate is issued without the payment of the sales or
3207	3207	compensating tax otherwise imposed upon such materials, shall be guilty
3208	3208	of a misdemeanor and, upon conviction therefor, shall be subject to the
3209	3209	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3210	3210	(ddd) on and after January 1, 1999, and before January 1, 2000, all
3211	3211	sales of materials and services purchased by any class II or III railroad as
3212	3212	classified by the federal surface transportation board for the construction,
3213	3213	renovation, repair or replacement of class II or III railroad track and
3214	3214	facilities used directly in interstate commerce. In the event any such track
3215	3215	or facility for which materials and services were purchased sales tax
3216	3216	exempt is not operational for five years succeeding the allowance of such
3217	3217	exemption, the total amount of sales tax that would have been payable
3218	3218	except for the operation of this subsection shall be recouped in accordance
3219	3219	with rules and regulations adopted for such purpose by the secretary of
3220	3220	revenue;
3221	3221	(eee) on and after January 1, 1999, and before January 1, 2001, all
3222	3222	sales of materials and services purchased for the original construction,
3223	3223	reconstruction, repair or replacement of grain storage facilities, including
3224	3224	1
3225	3225	2
3226	3226	3
3227	3227	4
3228	3228	5
3229	3229	6
3230	3230	7
3231	3231	8
3232	3232	9
3233	3233	10
3234	3234	11
3235	3235	12
3236	3236	13
3237	3237	14
3238	3238	15
3239	3239	16
3240	3240	17
3241	3241	18
3242	3242	19
3243	3243	20
3244	3244	21
3245	3245	22
3246	3246	23
3247	3247	24
3248	3248	25
3249	3249	26
3250	3250	27
3251	3251	28
3252	3252	29
3253	3253	30
3254	3254	31
3255	3255	32
3256	3256	33
3257	3257	34
3258	3258	35
3259	3259	36
3260	3260	37
3261	3261	38
3262	3262	39
3263	3263	40
3264	3264	41
3265	3265	42
3266	3266	43 SB 91 39
3267	3267	railroad sidings providing access thereto;
3268	3268	(fff) all sales of material handling equipment, racking systems and
3269	3269	other related machinery and equipment that is used for the handling,
3270	3270	movement or storage of tangible personal property in a warehouse or
3271	3271	distribution facility in this state; all sales of installation, repair and
3272	3272	maintenance services performed on such machinery and equipment; and
3273	3273	all sales of repair and replacement parts for such machinery and
3274	3274	equipment. For purposes of this subsection, a warehouse or distribution
3275	3275	facility means a single, fixed location that consists of buildings or
3276	3276	structures in a contiguous area where storage or distribution operations are
3277	3277	conducted that are separate and apart from the business' retail operations,
3278	3278	if any, and that do not otherwise qualify for exemption as occurring at a
3279	3279	manufacturing or processing plant or facility. Material handling and
3280	3280	storage equipment shall include aeration, dust control, cleaning, handling
3281	3281	and other such equipment that is used in a public grain warehouse or other
3282	3282	commercial grain storage facility, whether used for grain handling, grain
3283	3283	storage, grain refining or processing, or other grain treatment operation;
3284	3284	(ggg) all sales of tangible personal property and services purchased
3285	3285	by or on behalf of the Kansas academy of science, which is exempt from
3286	3286	federal income taxation pursuant to section 501(c)(3) of the federal
3287	3287	internal revenue code of 1986, and used solely by such academy for the
3288	3288	preparation, publication and dissemination of education materials;
3289	3289	(hhh) all sales of tangible personal property and services purchased
3290	3290	by or on behalf of all domestic violence shelters that are member agencies
3291	3291	of the Kansas coalition against sexual and domestic violence;
3292	3292	(iii) all sales of personal property and services purchased by an
3293	3293	organization that is exempt from federal income taxation pursuant to
3294	3294	section 501(c)(3) of the federal internal revenue code of 1986, and such
3295	3295	personal property and services are used by any such organization in the
3296	3296	collection, storage and distribution of food products to nonprofit
3297	3297	organizations that distribute such food products to persons pursuant to a
3298	3298	food distribution program on a charitable basis without fee or charge, and
3299	3299	all sales of tangible personal property or services purchased by a
3300	3300	contractor for the purpose of constructing, equipping, reconstructing,
3301	3301	maintaining, repairing, enlarging, furnishing or remodeling facilities used
3302	3302	for the collection and storage of such food products for any such
3303	3303	organization which is exempt from federal income taxation pursuant to
3304	3304	section 501(c)(3) of the federal internal revenue code of 1986, that would
3305	3305	be exempt from taxation under the provisions of this section if purchased
3306	3306	directly by such organization. Nothing in this subsection shall be deemed
3307	3307	to exempt the purchase of any construction machinery, equipment or tools
3308	3308	used in the constructing, equipping, reconstructing, maintaining, repairing,
3309	3309	enlarging, furnishing or remodeling facilities for any such organization.
3310	3310	1
3311	3311	2
3312	3312	3
3313	3313	4
3314	3314	5
3315	3315	6
3316	3316	7
3317	3317	8
3318	3318	9
3319	3319	10
3320	3320	11
3321	3321	12
3322	3322	13
3323	3323	14
3324	3324	15
3325	3325	16
3326	3326	17
3327	3327	18
3328	3328	19
3329	3329	20
3330	3330	21
3331	3331	22
3332	3332	23
3333	3333	24
3334	3334	25
3335	3335	26
3336	3336	27
3337	3337	28
3338	3338	29
3339	3339	30
3340	3340	31
3341	3341	32
3342	3342	33
3343	3343	34
3344	3344	35
3345	3345	36
3346	3346	37
3347	3347	38
3348	3348	39
3349	3349	40
3350	3350	41
3351	3351	42
3352	3352	43 SB 91 40
3353	3353	When any such organization shall contract for the purpose of constructing,
3354	3354	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3355	3355	remodeling facilities, it shall obtain from the state and furnish to the
3356	3356	contractor an exemption certificate for the project involved, and the
3357	3357	contractor may purchase materials for incorporation in such project. The
3358	3358	contractor shall furnish the number of such certificate to all suppliers from
3359	3359	whom such purchases are made, and such suppliers shall execute invoices
3360	3360	covering the same bearing the number of such certificate. Upon
3361	3361	completion of the project the contractor shall furnish to such organization
3362	3362	concerned a sworn statement, on a form to be provided by the director of
3363	3363	taxation, that all purchases so made were entitled to exemption under this
3364	3364	subsection. All invoices shall be held by the contractor for a period of five
3365	3365	years and shall be subject to audit by the director of taxation. If any
3366	3366	materials purchased under such a certificate are found not to have been
3367	3367	incorporated in such facilities or not to have been returned for credit or the
3368	3368	sales or compensating tax otherwise imposed upon such materials that will
3369	3369	not be so incorporated in such facilities reported and paid by such
3370	3370	contractor to the director of taxation not later than the 20
3371	3371	th
3372	3372	day of the
3373	3373	month following the close of the month in which it shall be determined
3374	3374	that such materials will not be used for the purpose for which such
3375	3375	certificate was issued, such organization concerned shall be liable for tax
3376	3376	on all materials purchased for the project, and upon payment thereof it
3377	3377	may recover the same from the contractor together with reasonable
3378	3378	attorney fees. Any contractor or any agent, employee or subcontractor
3379	3379	thereof, who shall use or otherwise dispose of any materials purchased
3380	3380	under such a certificate for any purpose other than that for which such a
3381	3381	certificate is issued without the payment of the sales or compensating tax
3382	3382	otherwise imposed upon such materials, shall be guilty of a misdemeanor
3383	3383	and, upon conviction therefor, shall be subject to the penalties provided for
3384	3384	in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after
3385	3385	July 1, 2005, but prior to the effective date of this act upon the gross
3386	3386	receipts received from any sale exempted by the amendatory provisions of
3387	3387	this subsection shall be refunded. Each claim for a sales tax refund shall be
3388	3388	verified and submitted to the director of taxation upon forms furnished by
3389	3389	the director and shall be accompanied by any additional documentation
3390	3390	required by the director. The director shall review each claim and shall
3391	3391	refund that amount of sales tax paid as determined under the provisions of
3392	3392	this subsection. All refunds shall be paid from the sales tax refund fund
3393	3393	upon warrants of the director of accounts and reports pursuant to vouchers
3394	3394	approved by the director or the director's designee;
3395	3395	(jjj) all sales of dietary supplements dispensed pursuant to a
3396	3396	prescription order by a licensed practitioner or a mid-level practitioner as
3397	3397	defined by K.S.A. 65-1626, and amendments thereto. As used in this
3398	3398	1
3399	3399	2
3400	3400	3
3401	3401	4
3402	3402	5
3403	3403	6
3404	3404	7
3405	3405	8
3406	3406	9
3407	3407	10
3408	3408	11
3409	3409	12
3410	3410	13
3411	3411	14
3412	3412	15
3413	3413	16
3414	3414	17
3415	3415	18
3416	3416	19
3417	3417	20
3418	3418	21
3419	3419	22
3420	3420	23
3421	3421	24
3422	3422	25
3423	3423	26
3424	3424	27
3425	3425	28
3426	3426	29
3427	3427	30
3428	3428	31
3429	3429	32
3430	3430	33
3431	3431	34
3432	3432	35
3433	3433	36
3434	3434	37
3435	3435	38
3436	3436	39
3437	3437	40
3438	3438	41
3439	3439	42
3440	3440	43 SB 91 41
3441	3441	subsection, "dietary supplement" means any product, other than tobacco,
3442	3442	intended to supplement the diet that: (1) Contains one or more of the
3443	3443	following dietary ingredients: A vitamin, a mineral, an herb or other
3444	3444	botanical, an amino acid, a dietary substance for use by humans to
3445	3445	supplement the diet by increasing the total dietary intake or a concentrate,
3446	3446	metabolite, constituent, extract or combination of any such ingredient; (2)
3447	3447	is intended for ingestion in tablet, capsule, powder, softgel, gelcap or
3448	3448	liquid form, or if not intended for ingestion, in such a form, is not
3449	3449	represented as conventional food and is not represented for use as a sole
3450	3450	item of a meal or of the diet; and (3) is required to be labeled as a dietary
3451	3451	supplement, identifiable by the supplemental facts box found on the label
3452	3452	and as required pursuant to 21 C.F.R. § 101.36;
3453	3453	(lll) all sales of tangible personal property and services purchased by
3454	3454	special olympics Kansas, inc. for the purpose of providing year-round
3455	3455	sports training and athletic competition in a variety of olympic-type sports
3456	3456	for individuals with intellectual disabilities by giving them continuing
3457	3457	opportunities to develop physical fitness, demonstrate courage, experience
3458	3458	joy and participate in a sharing of gifts, skills and friendship with their
3459	3459	families, other special olympics athletes and the community, and activities
3460	3460	provided or sponsored by such organization, and all sales of tangible
3461	3461	personal property by or on behalf of any such organization;
3462	3462	(mmm) all sales of tangible personal property purchased by or on
3463	3463	behalf of the Marillac center, inc., which is exempt from federal income
3464	3464	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
3465	3465	for the purpose of providing psycho-social-biological and special
3466	3466	education services to children, and all sales of any such property by or on
3467	3467	behalf of such organization for such purpose;
3468	3468	(nnn) all sales of tangible personal property and services purchased
3469	3469	by the west Sedgwick county-sunrise rotary club and sunrise charitable
3470	3470	fund for the purpose of constructing a boundless playground which is an
3471	3471	integrated, barrier free and developmentally advantageous play
3472	3472	environment for children of all abilities and disabilities;
3473	3473	(ooo) all sales of tangible personal property by or on behalf of a
3474	3474	public library serving the general public and supported in whole or in part
3475	3475	with tax money or a not-for-profit organization whose purpose is to raise
3476	3476	funds for or provide services or other benefits to any such public library;
3477	3477	(ppp) all sales of tangible personal property and services purchased
3478	3478	by or on behalf of a homeless shelter that is exempt from federal income
3479	3479	taxation pursuant to section 501(c)(3) of the federal income tax code of
3480	3480	1986, and used by any such homeless shelter to provide emergency and
3481	3481	transitional housing for individuals and families experiencing
3482	3482	homelessness, and all sales of any such property by or on behalf of any
3483	3483	such homeless shelter for any such purpose;
3484	3484	1
3485	3485	2
3486	3486	3
3487	3487	4
3488	3488	5
3489	3489	6
3490	3490	7
3491	3491	8
3492	3492	9
3493	3493	10
3494	3494	11
3495	3495	12
3496	3496	13
3497	3497	14
3498	3498	15
3499	3499	16
3500	3500	17
3501	3501	18
3502	3502	19
3503	3503	20
3504	3504	21
3505	3505	22
3506	3506	23
3507	3507	24
3508	3508	25
3509	3509	26
3510	3510	27
3511	3511	28
3512	3512	29
3513	3513	30
3514	3514	31
3515	3515	32
3516	3516	33
3517	3517	34
3518	3518	35
3519	3519	36
3520	3520	37
3521	3521	38
3522	3522	39
3523	3523	40
3524	3524	41
3525	3525	42
3526	3526	43 SB 91 42
3527	3527	(qqq) all sales of tangible personal property and services purchased
3528	3528	by TLC for children and families, inc., hereinafter referred to as TLC,
3529	3529	which is exempt from federal income taxation pursuant to section 501(c)
3530	3530	(3) of the federal internal revenue code of 1986, and such property and
3531	3531	services are used for the purpose of providing emergency shelter and
3532	3532	treatment for abused and neglected children as well as meeting additional
3533	3533	critical needs for children, juveniles and family, and all sales of any such
3534	3534	property by or on behalf of TLC for any such purpose; and all sales of
3535	3535	tangible personal property or services purchased by a contractor for the
3536	3536	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3537	3537	remodeling facilities for the operation of services for TLC for any such
3538	3538	purpose that would be exempt from taxation under the provisions of this
3539	3539	section if purchased directly by TLC. Nothing in this subsection shall be
3540	3540	deemed to exempt the purchase of any construction machinery, equipment
3541	3541	or tools used in the constructing, maintaining, repairing, enlarging,
3542	3542	furnishing or remodeling such facilities for TLC. When TLC contracts for
3543	3543	the purpose of constructing, maintaining, repairing, enlarging, furnishing
3544	3544	or remodeling such facilities, it shall obtain from the state and furnish to
3545	3545	the contractor an exemption certificate for the project involved, and the
3546	3546	contractor may purchase materials for incorporation in such project. The
3547	3547	contractor shall furnish the number of such certificate to all suppliers from
3548	3548	whom such purchases are made, and such suppliers shall execute invoices
3549	3549	covering the same bearing the number of such certificate. Upon
3550	3550	completion of the project the contractor shall furnish to TLC a sworn
3551	3551	statement, on a form to be provided by the director of taxation, that all
3552	3552	purchases so made were entitled to exemption under this subsection. All
3553	3553	invoices shall be held by the contractor for a period of five years and shall
3554	3554	be subject to audit by the director of taxation. If any materials purchased
3555	3555	under such a certificate are found not to have been incorporated in the
3556	3556	building or other project or not to have been returned for credit or the sales
3557	3557	or compensating tax otherwise imposed upon such materials that will not
3558	3558	be so incorporated in the building or other project reported and paid by
3559	3559	such contractor to the director of taxation not later than the 20
3560	3560	th
3561	3561	day of the
3562	3562	month following the close of the month in which it shall be determined
3563	3563	that such materials will not be used for the purpose for which such
3564	3564	certificate was issued, TLC shall be liable for tax on all materials
3565	3565	purchased for the project, and upon payment thereof it may recover the
3566	3566	same from the contractor together with reasonable attorney fees. Any
3567	3567	contractor or any agent, employee or subcontractor thereof, who shall use
3568	3568	or otherwise dispose of any materials purchased under such a certificate
3569	3569	for any purpose other than that for which such a certificate is issued
3570	3570	without the payment of the sales or compensating tax otherwise imposed
3571	3571	upon such materials, shall be guilty of a misdemeanor and, upon
3572	3572	1
3573	3573	2
3574	3574	3
3575	3575	4
3576	3576	5
3577	3577	6
3578	3578	7
3579	3579	8
3580	3580	9
3581	3581	10
3582	3582	11
3583	3583	12
3584	3584	13
3585	3585	14
3586	3586	15
3587	3587	16
3588	3588	17
3589	3589	18
3590	3590	19
3591	3591	20
3592	3592	21
3593	3593	22
3594	3594	23
3595	3595	24
3596	3596	25
3597	3597	26
3598	3598	27
3599	3599	28
3600	3600	29
3601	3601	30
3602	3602	31
3603	3603	32
3604	3604	33
3605	3605	34
3606	3606	35
3607	3607	36
3608	3608	37
3609	3609	38
3610	3610	39
3611	3611	40
3612	3612	41
3613	3613	42
3614	3614	43 SB 91 43
3615	3615	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3616	3616	79-3615(h), and amendments thereto;
3617	3617	(rrr) all sales of tangible personal property and services purchased by
3618	3618	any county law library maintained pursuant to law and sales of tangible
3619	3619	personal property and services purchased by an organization that would
3620	3620	have been exempt from taxation under the provisions of this subsection if
3621	3621	purchased directly by the county law library for the purpose of providing
3622	3622	legal resources to attorneys, judges, students and the general public, and
3623	3623	all sales of any such property by or on behalf of any such county law
3624	3624	library;
3625	3625	(sss) all sales of tangible personal property and services purchased by
3626	3626	catholic charities or youthville, hereinafter referred to as charitable family
3627	3627	providers, which is exempt from federal income taxation pursuant to
3628	3628	section 501(c)(3) of the federal internal revenue code of 1986, and which
3629	3629	such property and services are used for the purpose of providing
3630	3630	emergency shelter and treatment for abused and neglected children as well
3631	3631	as meeting additional critical needs for children, juveniles and family, and
3632	3632	all sales of any such property by or on behalf of charitable family
3633	3633	providers for any such purpose; and all sales of tangible personal property
3634	3634	or services purchased by a contractor for the purpose of constructing,
3635	3635	maintaining, repairing, enlarging, furnishing or remodeling facilities for
3636	3636	the operation of services for charitable family providers for any such
3637	3637	purpose which would be exempt from taxation under the provisions of this
3638	3638	section if purchased directly by charitable family providers. Nothing in
3639	3639	this subsection shall be deemed to exempt the purchase of any construction
3640	3640	machinery, equipment or tools used in the constructing, maintaining,
3641	3641	repairing, enlarging, furnishing or remodeling such facilities for charitable
3642	3642	family providers. When charitable family providers contracts for the
3643	3643	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3644	3644	remodeling such facilities, it shall obtain from the state and furnish to the
3645	3645	contractor an exemption certificate for the project involved, and the
3646	3646	contractor may purchase materials for incorporation in such project. The
3647	3647	contractor shall furnish the number of such certificate to all suppliers from
3648	3648	whom such purchases are made, and such suppliers shall execute invoices
3649	3649	covering the same bearing the number of such certificate. Upon
3650	3650	completion of the project the contractor shall furnish to charitable family
3651	3651	providers a sworn statement, on a form to be provided by the director of
3652	3652	taxation, that all purchases so made were entitled to exemption under this
3653	3653	subsection. All invoices shall be held by the contractor for a period of five
3654	3654	years and shall be subject to audit by the director of taxation. If any
3655	3655	materials purchased under such a certificate are found not to have been
3656	3656	incorporated in the building or other project or not to have been returned
3657	3657	for credit or the sales or compensating tax otherwise imposed upon such
3658	3658	1
3659	3659	2
3660	3660	3
3661	3661	4
3662	3662	5
3663	3663	6
3664	3664	7
3665	3665	8
3666	3666	9
3667	3667	10
3668	3668	11
3669	3669	12
3670	3670	13
3671	3671	14
3672	3672	15
3673	3673	16
3674	3674	17
3675	3675	18
3676	3676	19
3677	3677	20
3678	3678	21
3679	3679	22
3680	3680	23
3681	3681	24
3682	3682	25
3683	3683	26
3684	3684	27
3685	3685	28
3686	3686	29
3687	3687	30
3688	3688	31
3689	3689	32
3690	3690	33
3691	3691	34
3692	3692	35
3693	3693	36
3694	3694	37
3695	3695	38
3696	3696	39
3697	3697	40
3698	3698	41
3699	3699	42
3700	3700	43 SB 91 44
3701	3701	materials that will not be so incorporated in the building or other project
3702	3702	reported and paid by such contractor to the director of taxation not later
3703	3703	than the 20
3704	3704	th
3705	3705	day of the month following the close of the month in which it
3706	3706	shall be determined that such materials will not be used for the purpose for
3707	3707	which such certificate was issued, charitable family providers shall be
3708	3708	liable for tax on all materials purchased for the project, and upon payment
3709	3709	thereof it may recover the same from the contractor together with
3710	3710	reasonable attorney fees. Any contractor or any agent, employee or
3711	3711	subcontractor thereof, who shall use or otherwise dispose of any materials
3712	3712	purchased under such a certificate for any purpose other than that for
3713	3713	which such a certificate is issued without the payment of the sales or
3714	3714	compensating tax otherwise imposed upon such materials, shall be guilty
3715	3715	of a misdemeanor and, upon conviction therefor, shall be subject to the
3716	3716	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3717	3717	(ttt) all sales of tangible personal property or services purchased by a
3718	3718	contractor for a project for the purpose of restoring, constructing,
3719	3719	equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
3720	3720	remodeling a home or facility owned by a nonprofit museum that has been
3721	3721	granted an exemption pursuant to subsection (qq), which such home or
3722	3722	facility is located in a city that has been designated as a qualified
3723	3723	hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and
3724	3724	amendments thereto, and which such project is related to the purposes of
3725	3725	K.S.A. 75-5071 et seq., and amendments thereto, and that would be
3726	3726	exempt from taxation under the provisions of this section if purchased
3727	3727	directly by such nonprofit museum. Nothing in this subsection shall be
3728	3728	deemed to exempt the purchase of any construction machinery, equipment
3729	3729	or tools used in the restoring, constructing, equipping, reconstructing,
3730	3730	maintaining, repairing, enlarging, furnishing or remodeling a home or
3731	3731	facility for any such nonprofit museum. When any such nonprofit museum
3732	3732	shall contract for the purpose of restoring, constructing, equipping,
3733	3733	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3734	3734	a home or facility, it shall obtain from the state and furnish to the
3735	3735	contractor an exemption certificate for the project involved, and the
3736	3736	contractor may purchase materials for incorporation in such project. The
3737	3737	contractor shall furnish the number of such certificates to all suppliers
3738	3738	from whom such purchases are made, and such suppliers shall execute
3739	3739	invoices covering the same bearing the number of such certificate. Upon
3740	3740	completion of the project, the contractor shall furnish to such nonprofit
3741	3741	museum a sworn statement on a form to be provided by the director of
3742	3742	taxation that all purchases so made were entitled to exemption under this
3743	3743	subsection. All invoices shall be held by the contractor for a period of five
3744	3744	years and shall be subject to audit by the director of taxation. If any
3745	3745	materials purchased under such a certificate are found not to have been
3746	3746	1
3747	3747	2
3748	3748	3
3749	3749	4
3750	3750	5
3751	3751	6
3752	3752	7
3753	3753	8
3754	3754	9
3755	3755	10
3756	3756	11
3757	3757	12
3758	3758	13
3759	3759	14
3760	3760	15
3761	3761	16
3762	3762	17
3763	3763	18
3764	3764	19
3765	3765	20
3766	3766	21
3767	3767	22
3768	3768	23
3769	3769	24
3770	3770	25
3771	3771	26
3772	3772	27
3773	3773	28
3774	3774	29
3775	3775	30
3776	3776	31
3777	3777	32
3778	3778	33
3779	3779	34
3780	3780	35
3781	3781	36
3782	3782	37
3783	3783	38
3784	3784	39
3785	3785	40
3786	3786	41
3787	3787	42
3788	3788	43 SB 91 45
3789	3789	incorporated in the building or other project or not to have been returned
3790	3790	for credit or the sales or compensating tax otherwise imposed upon such
3791	3791	materials that will not be so incorporated in a home or facility or other
3792	3792	project reported and paid by such contractor to the director of taxation not
3793	3793	later than the 20
3794	3794	th
3795	3795	day of the month following the close of the month in
3796	3796	which it shall be determined that such materials will not be used for the
3797	3797	purpose for which such certificate was issued, such nonprofit museum
3798	3798	shall be liable for tax on all materials purchased for the project, and upon
3799	3799	payment thereof it may recover the same from the contractor together with
3800	3800	reasonable attorney fees. Any contractor or any agent, employee or
3801	3801	subcontractor thereof, who shall use or otherwise dispose of any materials
3802	3802	purchased under such a certificate for any purpose other than that for
3803	3803	which such a certificate is issued without the payment of the sales or
3804	3804	compensating tax otherwise imposed upon such materials, shall be guilty
3805	3805	of a misdemeanor and, upon conviction therefor, shall be subject to the
3806	3806	penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
3807	3807	(uuu) all sales of tangible personal property and services purchased
3808	3808	by Kansas children's service league, hereinafter referred to as KCSL,
3809	3809	which is exempt from federal income taxation pursuant to section 501(c)
3810	3810	(3) of the federal internal revenue code of 1986, and which such property
3811	3811	and services are used for the purpose of providing for the prevention and
3812	3812	treatment of child abuse and maltreatment as well as meeting additional
3813	3813	critical needs for children, juveniles and family, and all sales of any such
3814	3814	property by or on behalf of KCSL for any such purpose; and all sales of
3815	3815	tangible personal property or services purchased by a contractor for the
3816	3816	purpose of constructing, maintaining, repairing, enlarging, furnishing or
3817	3817	remodeling facilities for the operation of services for KCSL for any such
3818	3818	purpose that would be exempt from taxation under the provisions of this
3819	3819	section if purchased directly by KCSL. Nothing in this subsection shall be
3820	3820	deemed to exempt the purchase of any construction machinery, equipment
3821	3821	or tools used in the constructing, maintaining, repairing, enlarging,
3822	3822	furnishing or remodeling such facilities for KCSL. When KCSL contracts
3823	3823	for the purpose of constructing, maintaining, repairing, enlarging,
3824	3824	furnishing or remodeling such facilities, it shall obtain from the state and
3825	3825	furnish to the contractor an exemption certificate for the project involved,
3826	3826	and the contractor may purchase materials for incorporation in such
3827	3827	project. The contractor shall furnish the number of such certificate to all
3828	3828	suppliers from whom such purchases are made, and such suppliers shall
3829	3829	execute invoices covering the same bearing the number of such certificate.
3830	3830	Upon completion of the project the contractor shall furnish to KCSL a
3831	3831	sworn statement, on a form to be provided by the director of taxation, that
3832	3832	all purchases so made were entitled to exemption under this subsection.
3833	3833	All invoices shall be held by the contractor for a period of five years and
3834	3834	1
3835	3835	2
3836	3836	3
3837	3837	4
3838	3838	5
3839	3839	6
3840	3840	7
3841	3841	8
3842	3842	9
3843	3843	10
3844	3844	11
3845	3845	12
3846	3846	13
3847	3847	14
3848	3848	15
3849	3849	16
3850	3850	17
3851	3851	18
3852	3852	19
3853	3853	20
3854	3854	21
3855	3855	22
3856	3856	23
3857	3857	24
3858	3858	25
3859	3859	26
3860	3860	27
3861	3861	28
3862	3862	29
3863	3863	30
3864	3864	31
3865	3865	32
3866	3866	33
3867	3867	34
3868	3868	35
3869	3869	36
3870	3870	37
3871	3871	38
3872	3872	39
3873	3873	40
3874	3874	41
3875	3875	42
3876	3876	43 SB 91 46
3877	3877	shall be subject to audit by the director of taxation. If any materials
3878	3878	purchased under such a certificate are found not to have been incorporated
3879	3879	in the building or other project or not to have been returned for credit or
3880	3880	the sales or compensating tax otherwise imposed upon such materials that
3881	3881	will not be so incorporated in the building or other project reported and
3882	3882	paid by such contractor to the director of taxation not later than the 20
3883	3883	th
3884	3884	day of the month following the close of the month in which it shall be
3885	3885	determined that such materials will not be used for the purpose for which
3886	3886	such certificate was issued, KCSL shall be liable for tax on all materials
3887	3887	purchased for the project, and upon payment thereof it may recover the
3888	3888	same from the contractor together with reasonable attorney fees. Any
3889	3889	contractor or any agent, employee or subcontractor thereof, who shall use
3890	3890	or otherwise dispose of any materials purchased under such a certificate
3891	3891	for any purpose other than that for which such a certificate is issued
3892	3892	without the payment of the sales or compensating tax otherwise imposed
3893	3893	upon such materials, shall be guilty of a misdemeanor and, upon
3894	3894	conviction therefor, shall be subject to the penalties provided for in K.S.A.
3895	3895	79-3615(h), and amendments thereto;
3896	3896	(vvv) all sales of tangible personal property or services, including the
3897	3897	renting and leasing of tangible personal property or services, purchased by
3898	3898	jazz in the woods, inc., a Kansas corporation that is exempt from federal
3899	3899	income taxation pursuant to section 501(c)(3) of the federal internal
3900	3900	revenue code, for the purpose of providing jazz in the woods, an event
3901	3901	benefiting children-in-need and other nonprofit charities assisting such
3902	3902	children, and all sales of any such property by or on behalf of such
3903	3903	organization for such purpose;
3904	3904	(www) all sales of tangible personal property purchased by or on
3905	3905	behalf of the Frontenac education foundation, which is exempt from
3906	3906	federal income taxation pursuant to section 501(c)(3) of the federal
3907	3907	internal revenue code, for the purpose of providing education support for
3908	3908	students, and all sales of any such property by or on behalf of such
3909	3909	organization for such purpose;
3910	3910	(xxx) all sales of personal property and services purchased by the
3911	3911	booth theatre foundation, inc., an organization, which is exempt from
3912	3912	federal income taxation pursuant to section 501(c)(3) of the federal
3913	3913	internal revenue code of 1986, and which such personal property and
3914	3914	services are used by any such organization in the constructing, equipping,
3915	3915	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3916	3916	of the booth theatre, and all sales of tangible personal property or services
3917	3917	purchased by a contractor for the purpose of constructing, equipping,
3918	3918	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3919	3919	the booth theatre for such organization, that would be exempt from
3920	3920	taxation under the provisions of this section if purchased directly by such
3921	3921	1
3922	3922	2
3923	3923	3
3924	3924	4
3925	3925	5
3926	3926	6
3927	3927	7
3928	3928	8
3929	3929	9
3930	3930	10
3931	3931	11
3932	3932	12
3933	3933	13
3934	3934	14
3935	3935	15
3936	3936	16
3937	3937	17
3938	3938	18
3939	3939	19
3940	3940	20
3941	3941	21
3942	3942	22
3943	3943	23
3944	3944	24
3945	3945	25
3946	3946	26
3947	3947	27
3948	3948	28
3949	3949	29
3950	3950	30
3951	3951	31
3952	3952	32
3953	3953	33
3954	3954	34
3955	3955	35
3956	3956	36
3957	3957	37
3958	3958	38
3959	3959	39
3960	3960	40
3961	3961	41
3962	3962	42
3963	3963	43 SB 91 47
3964	3964	organization. Nothing in this subsection shall be deemed to exempt the
3965	3965	purchase of any construction machinery, equipment or tools used in the
3966	3966	constructing, equipping, reconstructing, maintaining, repairing, enlarging,
3967	3967	furnishing or remodeling facilities for any such organization. When any
3968	3968	such organization shall contract for the purpose of constructing, equipping,
3969	3969	reconstructing, maintaining, repairing, enlarging, furnishing or remodeling
3970	3970	facilities, it shall obtain from the state and furnish to the contractor an
3971	3971	exemption certificate for the project involved, and the contractor may
3972	3972	purchase materials for incorporation in such project. The contractor shall
3973	3973	furnish the number of such certificate to all suppliers from whom such
3974	3974	purchases are made, and such suppliers shall execute invoices covering the
3975	3975	same bearing the number of such certificate. Upon completion of the
3976	3976	project the contractor shall furnish to such organization concerned a sworn
3977	3977	statement, on a form to be provided by the director of taxation, that all
3978	3978	purchases so made were entitled to exemption under this subsection. All
3979	3979	invoices shall be held by the contractor for a period of five years and shall
3980	3980	be subject to audit by the director of taxation. If any materials purchased
3981	3981	under such a certificate are found not to have been incorporated in such
3982	3982	facilities or not to have been returned for credit or the sales or
3983	3983	compensating tax otherwise imposed upon such materials that will not be
3984	3984	so incorporated in such facilities reported and paid by such contractor to
3985	3985	the director of taxation not later than the 20
3986	3986	th
3987	3987	day of the month following
3988	3988	the close of the month in which it shall be determined that such materials
3989	3989	will not be used for the purpose for which such certificate was issued, such
3990	3990	organization concerned shall be liable for tax on all materials purchased
3991	3991	for the project, and upon payment thereof it may recover the same from
3992	3992	the contractor together with reasonable attorney fees. Any contractor or
3993	3993	any agent, employee or subcontractor thereof, who shall use or otherwise
3994	3994	dispose of any materials purchased under such a certificate for any purpose
3995	3995	other than that for which such a certificate is issued without the payment
3996	3996	of the sales or compensating tax otherwise imposed upon such materials,
3997	3997	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
3998	3998	subject to the penalties provided for in K.S.A. 79-3615(h), and
3999	3999	amendments thereto. Sales tax paid on and after January 1, 2007, but prior
4000	4000	to the effective date of this act upon the gross receipts received from any
4001	4001	sale which would have been exempted by the provisions of this subsection
4002	4002	had such sale occurred after the effective date of this act shall be refunded.
4003	4003	Each claim for a sales tax refund shall be verified and submitted to the
4004	4004	director of taxation upon forms furnished by the director and shall be
4005	4005	accompanied by any additional documentation required by the director.
4006	4006	The director shall review each claim and shall refund that amount of sales
4007	4007	tax paid as determined under the provisions of this subsection. All refunds
4008	4008	shall be paid from the sales tax refund fund upon warrants of the director
4009	4009	1
4010	4010	2
4011	4011	3
4012	4012	4
4013	4013	5
4014	4014	6
4015	4015	7
4016	4016	8
4017	4017	9
4018	4018	10
4019	4019	11
4020	4020	12
4021	4021	13
4022	4022	14
4023	4023	15
4024	4024	16
4025	4025	17
4026	4026	18
4027	4027	19
4028	4028	20
4029	4029	21
4030	4030	22
4031	4031	23
4032	4032	24
4033	4033	25
4034	4034	26
4035	4035	27
4036	4036	28
4037	4037	29
4038	4038	30
4039	4039	31
4040	4040	32
4041	4041	33
4042	4042	34
4043	4043	35
4044	4044	36
4045	4045	37
4046	4046	38
4047	4047	39
4048	4048	40
4049	4049	41
4050	4050	42
4051	4051	43 SB 91 48
4052	4052	of accounts and reports pursuant to vouchers approved by the director or
4053	4053	the director's designee;
4054	4054	(yyy) all sales of tangible personal property and services purchased
4055	4055	by TLC charities foundation, inc., hereinafter referred to as TLC charities,
4056	4056	which is exempt from federal income taxation pursuant to section 501(c)
4057	4057	(3) of the federal internal revenue code of 1986, and which such property
4058	4058	and services are used for the purpose of encouraging private philanthropy
4059	4059	to further the vision, values, and goals of TLC for children and families,
4060	4060	inc.; and all sales of such property and services by or on behalf of TLC
4061	4061	charities for any such purpose and all sales of tangible personal property or
4062	4062	services purchased by a contractor for the purpose of constructing,
4063	4063	maintaining, repairing, enlarging, furnishing or remodeling facilities for
4064	4064	the operation of services for TLC charities for any such purpose that would
4065	4065	be exempt from taxation under the provisions of this section if purchased
4066	4066	directly by TLC charities. Nothing in this subsection shall be deemed to
4067	4067	exempt the purchase of any construction machinery, equipment or tools
4068	4068	used in the constructing, maintaining, repairing, enlarging, furnishing or
4069	4069	remodeling such facilities for TLC charities. When TLC charities contracts
4070	4070	for the purpose of constructing, maintaining, repairing, enlarging,
4071	4071	furnishing or remodeling such facilities, it shall obtain from the state and
4072	4072	furnish to the contractor an exemption certificate for the project involved,
4073	4073	and the contractor may purchase materials for incorporation in such
4074	4074	project. The contractor shall furnish the number of such certificate to all
4075	4075	suppliers from whom such purchases are made, and such suppliers shall
4076	4076	execute invoices covering the same bearing the number of such certificate.
4077	4077	Upon completion of the project the contractor shall furnish to TLC
4078	4078	charities a sworn statement, on a form to be provided by the director of
4079	4079	taxation, that all purchases so made were entitled to exemption under this
4080	4080	subsection. All invoices shall be held by the contractor for a period of five
4081	4081	years and shall be subject to audit by the director of taxation. If any
4082	4082	materials purchased under such a certificate are found not to have been
4083	4083	incorporated in the building or other project or not to have been returned
4084	4084	for credit or the sales or compensating tax otherwise imposed upon such
4085	4085	materials that will not be incorporated into the building or other project
4086	4086	reported and paid by such contractor to the director of taxation not later
4087	4087	than the 20
4088	4088	th
4089	4089	day of the month following the close of the month in which it
4090	4090	shall be determined that such materials will not be used for the purpose for
4091	4091	which such certificate was issued, TLC charities shall be liable for tax on
4092	4092	all materials purchased for the project, and upon payment thereof it may
4093	4093	recover the same from the contractor together with reasonable attorney
4094	4094	fees. Any contractor or any agent, employee or subcontractor thereof, who
4095	4095	shall use or otherwise dispose of any materials purchased under such a
4096	4096	certificate for any purpose other than that for which such a certificate is
4097	4097	1
4098	4098	2
4099	4099	3
4100	4100	4
4101	4101	5
4102	4102	6
4103	4103	7
4104	4104	8
4105	4105	9
4106	4106	10
4107	4107	11
4108	4108	12
4109	4109	13
4110	4110	14
4111	4111	15
4112	4112	16
4113	4113	17
4114	4114	18
4115	4115	19
4116	4116	20
4117	4117	21
4118	4118	22
4119	4119	23
4120	4120	24
4121	4121	25
4122	4122	26
4123	4123	27
4124	4124	28
4125	4125	29
4126	4126	30
4127	4127	31
4128	4128	32
4129	4129	33
4130	4130	34
4131	4131	35
4132	4132	36
4133	4133	37
4134	4134	38
4135	4135	39
4136	4136	40
4137	4137	41
4138	4138	42
4139	4139	43 SB 91 49
4140	4140	issued without the payment of the sales or compensating tax otherwise
4141	4141	imposed upon such materials, shall be guilty of a misdemeanor and, upon
4142	4142	conviction therefor, shall be subject to the penalties provided for in K.S.A.
4143	4143	79-3615(h), and amendments thereto;
4144	4144	(zzz) all sales of tangible personal property purchased by the rotary
4145	4145	club of shawnee foundation, which is exempt from federal income taxation
4146	4146	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
4147	4147	as amended, used for the purpose of providing contributions to community
4148	4148	service organizations and scholarships;
4149	4149	(aaaa) all sales of personal property and services purchased by or on
4150	4150	behalf of victory in the valley, inc., which is exempt from federal income
4151	4151	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
4152	4152	for the purpose of providing a cancer support group and services for
4153	4153	persons with cancer, and all sales of any such property by or on behalf of
4154	4154	any such organization for any such purpose;
4155	4155	(bbbb) all sales of entry or participation fees, charges or tickets by
4156	4156	Guadalupe health foundation, which is exempt from federal income
4157	4157	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
4158	4158	for such organization's annual fundraising event which purpose is to
4159	4159	provide health care services for uninsured workers;
4160	4160	(cccc) all sales of tangible personal property or services purchased by
4161	4161	or on behalf of wayside waifs, inc., which is exempt from federal income
4162	4162	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
4163	4163	for the purpose of providing such organization's annual fundraiser, an
4164	4164	event whose purpose is to support the care of homeless and abandoned
4165	4165	animals, animal adoption efforts, education programs for children and
4166	4166	efforts to reduce animal over-population and animal welfare services, and
4167	4167	all sales of any such property, including entry or participation fees or
4168	4168	charges, by or on behalf of such organization for such purpose;
4169	4169	(dddd) all sales of tangible personal property or services purchased
4170	4170	by or on behalf of goodwill industries or Easter seals of Kansas, inc., both
4171	4171	of which are exempt from federal income taxation pursuant to section
4172	4172	501(c)(3) of the federal internal revenue code, for the purpose of providing
4173	4173	education, training and employment opportunities for people with
4174	4174	disabilities and other barriers to employment;
4175	4175	(eeee) all sales of tangible personal property or services purchased by
4176	4176	or on behalf of all American beef battalion, inc., which is exempt from
4177	4177	federal income taxation pursuant to section 501(c)(3) of the federal
4178	4178	internal revenue code, for the purpose of educating, promoting and
4179	4179	participating as a contact group through the beef cattle industry in order to
4180	4180	carry out such projects that provide support and morale to members of the
4181	4181	United States armed forces and military services;
4182	4182	(ffff) all sales of tangible personal property and services purchased by
4183	4183	1
4184	4184	2
4185	4185	3
4186	4186	4
4187	4187	5
4188	4188	6
4189	4189	7
4190	4190	8
4191	4191	9
4192	4192	10
4193	4193	11
4194	4194	12
4195	4195	13
4196	4196	14
4197	4197	15
4198	4198	16
4199	4199	17
4200	4200	18
4201	4201	19
4202	4202	20
4203	4203	21
4204	4204	22
4205	4205	23
4206	4206	24
4207	4207	25
4208	4208	26
4209	4209	27
4210	4210	28
4211	4211	29
4212	4212	30
4213	4213	31
4214	4214	32
4215	4215	33
4216	4216	34
4217	4217	35
4218	4218	36
4219	4219	37
4220	4220	38
4221	4221	39
4222	4222	40
4223	4223	41
4224	4224	42
4225	4225	43 SB 91 50
4226	4226	sheltered living, inc., which is exempt from federal income taxation
4227	4227	pursuant to section 501(c)(3) of the federal internal revenue code of 1986,
4228	4228	and which such property and services are used for the purpose of
4229	4229	providing residential and day services for people with developmental
4230	4230	disabilities or intellectual disability, or both, and all sales of any such
4231	4231	property by or on behalf of sheltered living, inc., for any such purpose; and
4232	4232	all sales of tangible personal property or services purchased by a
4233	4233	contractor for the purpose of rehabilitating, constructing, maintaining,
4234	4234	repairing, enlarging, furnishing or remodeling homes and facilities for
4235	4235	sheltered living, inc., for any such purpose that would be exempt from
4236	4236	taxation under the provisions of this section if purchased directly by
4237	4237	sheltered living, inc. Nothing in this subsection shall be deemed to exempt
4238	4238	the purchase of any construction machinery, equipment or tools used in the
4239	4239	constructing, maintaining, repairing, enlarging, furnishing or remodeling
4240	4240	such homes and facilities for sheltered living, inc. When sheltered living,
4241	4241	inc., contracts for the purpose of rehabilitating, constructing, maintaining,
4242	4242	repairing, enlarging, furnishing or remodeling such homes and facilities, it
4243	4243	shall obtain from the state and furnish to the contractor an exemption
4244	4244	certificate for the project involved, and the contractor may purchase
4245	4245	materials for incorporation in such project. The contractor shall furnish the
4246	4246	number of such certificate to all suppliers from whom such purchases are
4247	4247	made, and such suppliers shall execute invoices covering the same bearing
4248	4248	the number of such certificate. Upon completion of the project the
4249	4249	contractor shall furnish to sheltered living, inc., a sworn statement, on a
4250	4250	form to be provided by the director of taxation, that all purchases so made
4251	4251	were entitled to exemption under this subsection. All invoices shall be held
4252	4252	by the contractor for a period of five years and shall be subject to audit by
4253	4253	the director of taxation. If any materials purchased under such a certificate
4254	4254	are found not to have been incorporated in the building or other project or
4255	4255	not to have been returned for credit or the sales or compensating tax
4256	4256	otherwise imposed upon such materials that will not be so incorporated in
4257	4257	the building or other project reported and paid by such contractor to the
4258	4258	director of taxation not later than the 20
4259	4259	th
4260	4260	day of the month following the
4261	4261	close of the month in which it shall be determined that such materials will
4262	4262	not be used for the purpose for which such certificate was issued, sheltered
4263	4263	living, inc., shall be liable for tax on all materials purchased for the
4264	4264	project, and upon payment thereof it may recover the same from the
4265	4265	contractor together with reasonable attorney fees. Any contractor or any
4266	4266	agent, employee or subcontractor thereof, who shall use or otherwise
4267	4267	dispose of any materials purchased under such a certificate for any purpose
4268	4268	other than that for which such a certificate is issued without the payment
4269	4269	of the sales or compensating tax otherwise imposed upon such materials,
4270	4270	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4271	4271	1
4272	4272	2
4273	4273	3
4274	4274	4
4275	4275	5
4276	4276	6
4277	4277	7
4278	4278	8
4279	4279	9
4280	4280	10
4281	4281	11
4282	4282	12
4283	4283	13
4284	4284	14
4285	4285	15
4286	4286	16
4287	4287	17
4288	4288	18
4289	4289	19
4290	4290	20
4291	4291	21
4292	4292	22
4293	4293	23
4294	4294	24
4295	4295	25
4296	4296	26
4297	4297	27
4298	4298	28
4299	4299	29
4300	4300	30
4301	4301	31
4302	4302	32
4303	4303	33
4304	4304	34
4305	4305	35
4306	4306	36
4307	4307	37
4308	4308	38
4309	4309	39
4310	4310	40
4311	4311	41
4312	4312	42
4313	4313	43 SB 91 51
4314	4314	subject to the penalties provided for in K.S.A. 79-3615(h), and
4315	4315	amendments thereto;
4316	4316	(gggg) all sales of game birds for which the primary purpose is use in
4317	4317	hunting;
4318	4318	(hhhh) all sales of tangible personal property or services purchased
4319	4319	on or after July 1, 2014, for the purpose of and in conjunction with
4320	4320	constructing, reconstructing, enlarging or remodeling a business identified
4321	4321	under the North American industry classification system (NAICS)
4322	4322	subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and
4323	4323	installation of machinery and equipment purchased for installation at any
4324	4324	such business. The exemption provided in this subsection shall not apply
4325	4325	to projects that have actual total costs less than $50,000. When a person
4326	4326	contracts for the construction, reconstruction, enlargement or remodeling
4327	4327	of any such business, such person shall obtain from the state and furnish to
4328	4328	the contractor an exemption certificate for the project involved, and the
4329	4329	contractor may purchase materials, machinery and equipment for
4330	4330	incorporation in such project. The contractor shall furnish the number of
4331	4331	such certificates to all suppliers from whom such purchases are made, and
4332	4332	such suppliers shall execute invoices covering the same bearing the
4333	4333	number of such certificate. Upon completion of the project, the contractor
4334	4334	shall furnish to the owner of the business a sworn statement, on a form to
4335	4335	be provided by the director of taxation, that all purchases so made were
4336	4336	entitled to exemption under this subsection. All invoices shall be held by
4337	4337	the contractor for a period of five years and shall be subject to audit by the
4338	4338	director of taxation. Any contractor or any agent, employee or
4339	4339	subcontractor of the contractor, who shall use or otherwise dispose of any
4340	4340	materials, machinery or equipment purchased under such a certificate for
4341	4341	any purpose other than that for which such a certificate is issued without
4342	4342	the payment of the sales or compensating tax otherwise imposed thereon,
4343	4343	shall be guilty of a misdemeanor and, upon conviction therefor, shall be
4344	4344	subject to the penalties provided for in K.S.A. 79-3615(h), and
4345	4345	amendments thereto;
4346	4346	(iiii) all sales of tangible personal property or services purchased by a
4347	4347	contractor for the purpose of constructing, maintaining, repairing,
4348	4348	enlarging, furnishing or remodeling facilities for the operation of services
4349	4349	for Wichita children's home for any such purpose that would be exempt
4350	4350	from taxation under the provisions of this section if purchased directly by
4351	4351	Wichita children's home. Nothing in this subsection shall be deemed to
4352	4352	exempt the purchase of any construction machinery, equipment or tools
4353	4353	used in the constructing, maintaining, repairing, enlarging, furnishing or
4354	4354	remodeling such facilities for Wichita children's home. When Wichita
4355	4355	children's home contracts for the purpose of constructing, maintaining,
4356	4356	repairing, enlarging, furnishing or remodeling such facilities, it shall obtain
4357	4357	1
4358	4358	2
4359	4359	3
4360	4360	4
4361	4361	5
4362	4362	6
4363	4363	7
4364	4364	8
4365	4365	9
4366	4366	10
4367	4367	11
4368	4368	12
4369	4369	13
4370	4370	14
4371	4371	15
4372	4372	16
4373	4373	17
4374	4374	18
4375	4375	19
4376	4376	20
4377	4377	21
4378	4378	22
4379	4379	23
4380	4380	24
4381	4381	25
4382	4382	26
4383	4383	27
4384	4384	28
4385	4385	29
4386	4386	30
4387	4387	31
4388	4388	32
4389	4389	33
4390	4390	34
4391	4391	35
4392	4392	36
4393	4393	37
4394	4394	38
4395	4395	39
4396	4396	40
4397	4397	41
4398	4398	42
4399	4399	43 SB 91 52
4400	4400	from the state and furnish to the contractor an exemption certificate for the
4401	4401	project involved, and the contractor may purchase materials for
4402	4402	incorporation in such project. The contractor shall furnish the number of
4403	4403	such certificate to all suppliers from whom such purchases are made, and
4404	4404	such suppliers shall execute invoices covering the same bearing the
4405	4405	number of such certificate. Upon completion of the project, the contractor
4406	4406	shall furnish to Wichita children's home a sworn statement, on a form to be
4407	4407	provided by the director of taxation, that all purchases so made were
4408	4408	entitled to exemption under this subsection. All invoices shall be held by
4409	4409	the contractor for a period of five years and shall be subject to audit by the
4410	4410	director of taxation. If any materials purchased under such a certificate are
4411	4411	found not to have been incorporated in the building or other project or not
4412	4412	to have been returned for credit or the sales or compensating tax otherwise
4413	4413	imposed upon such materials that will not be so incorporated in the
4414	4414	building or other project reported and paid by such contractor to the
4415	4415	director of taxation not later than the 20
4416	4416	th
4417	4417	day of the month following the
4418	4418	close of the month in which it shall be determined that such materials will
4419	4419	not be used for the purpose for which such certificate was issued, Wichita
4420	4420	children's home shall be liable for the tax on all materials purchased for the
4421	4421	project, and upon payment, it may recover the same from the contractor
4422	4422	together with reasonable attorney fees. Any contractor or any agent,
4423	4423	employee or subcontractor, who shall use or otherwise dispose of any
4424	4424	materials purchased under such a certificate for any purpose other than that
4425	4425	for which such a certificate is issued without the payment of the sales or
4426	4426	compensating tax otherwise imposed upon such materials, shall be guilty
4427	4427	of a misdemeanor and, upon conviction, shall be subject to the penalties
4428	4428	provided for in K.S.A. 79-3615(h), and amendments thereto;
4429	4429	(jjjj) all sales of tangible personal property or services purchased by
4430	4430	or on behalf of the beacon, inc., that is exempt from federal income
4431	4431	taxation pursuant to section 501(c)(3) of the federal internal revenue code,
4432	4432	for the purpose of providing those desiring help with food, shelter, clothing
4433	4433	and other necessities of life during times of special need;
4434	4434	(kkkk) all sales of tangible personal property and services purchased
4435	4435	by or on behalf of reaching out from within, inc., which is exempt from
4436	4436	federal income taxation pursuant to section 501(c)(3) of the federal
4437	4437	internal revenue code, for the purpose of sponsoring self-help programs for
4438	4438	incarcerated persons that will enable such incarcerated persons to become
4439	4439	role models for non-violence while in correctional facilities and productive
4440	4440	family members and citizens upon return to the community;
4441	4441	(llll) all sales of tangible personal property and services purchased by
4442	4442	Gove county healthcare endowment foundation, inc., which is exempt
4443	4443	from federal income taxation pursuant to section 501(c)(3) of the federal
4444	4444	internal revenue code of 1986, and which such property and services are
4445	4445	1
4446	4446	2
4447	4447	3
4448	4448	4
4449	4449	5
4450	4450	6
4451	4451	7
4452	4452	8
4453	4453	9
4454	4454	10
4455	4455	11
4456	4456	12
4457	4457	13
4458	4458	14
4459	4459	15
4460	4460	16
4461	4461	17
4462	4462	18
4463	4463	19
4464	4464	20
4465	4465	21
4466	4466	22
4467	4467	23
4468	4468	24
4469	4469	25
4470	4470	26
4471	4471	27
4472	4472	28
4473	4473	29
4474	4474	30
4475	4475	31
4476	4476	32
4477	4477	33
4478	4478	34
4479	4479	35
4480	4480	36
4481	4481	37
4482	4482	38
4483	4483	39
4484	4484	40
4485	4485	41
4486	4486	42
4487	4487	43 SB 91 53
4488	4488	used for the purpose of constructing and equipping an airport in Quinter,
4489	4489	Kansas, and all sales of tangible personal property or services purchased
4490	4490	by a contractor for the purpose of constructing and equipping an airport in
4491	4491	Quinter, Kansas, for such organization, that would be exempt from
4492	4492	taxation under the provisions of this section if purchased directly by such
4493	4493	organization. Nothing in this subsection shall be deemed to exempt the
4494	4494	purchase of any construction machinery, equipment or tools used in the
4495	4495	constructing or equipping of facilities for such organization. When such
4496	4496	organization shall contract for the purpose of constructing or equipping an
4497	4497	airport in Quinter, Kansas, it shall obtain from the state and furnish to the
4498	4498	contractor an exemption certificate for the project involved, and the
4499	4499	contractor may purchase materials for incorporation in such project. The
4500	4500	contractor shall furnish the number of such certificate to all suppliers from
4501	4501	whom such purchases are made, and such suppliers shall execute invoices
4502	4502	covering the same bearing the number of such certificate. Upon
4503	4503	completion of the project, the contractor shall furnish to such organization
4504	4504	concerned a sworn statement, on a form to be provided by the director of
4505	4505	taxation, that all purchases so made were entitled to exemption under this
4506	4506	subsection. All invoices shall be held by the contractor for a period of five
4507	4507	years and shall be subject to audit by the director of taxation. If any
4508	4508	materials purchased under such a certificate are found not to have been
4509	4509	incorporated in such facilities or not to have been returned for credit or the
4510	4510	sales or compensating tax otherwise imposed upon such materials that will
4511	4511	not be so incorporated in such facilities reported and paid by such
4512	4512	contractor to the director of taxation no later than the 20
4513	4513	th
4514	4514	day of the month
4515	4515	following the close of the month in which it shall be determined that such
4516	4516	materials will not be used for the purpose for which such certificate was
4517	4517	issued, such organization concerned shall be liable for tax on all materials
4518	4518	purchased for the project, and upon payment thereof it may recover the
4519	4519	same from the contractor together with reasonable attorney fees. Any
4520	4520	contractor or any agent, employee or subcontractor thereof, who purchased
4521	4521	under such a certificate for any purpose other than that for which such a
4522	4522	certificate is issued without the payment of the sales or compensating tax
4523	4523	otherwise imposed upon such materials, shall be guilty of a misdemeanor
4524	4524	and, upon conviction therefor, shall be subject to the penalties provided for
4525	4525	in K.S.A. 79-3615(h), and amendments thereto. The provisions of this
4526	4526	subsection shall expire and have no effect on and after July 1, 2019;
4527	4527	(mmmm) all sales of gold or silver coins; and palladium, platinum,
4528	4528	gold or silver bullion. For the purposes of this subsection, "bullion" means
4529	4529	bars, ingots or commemorative medallions of gold, silver, platinum,
4530	4530	palladium, or a combination thereof, for which the value of the metal
4531	4531	depends on its content and not the form;
4532	4532	(nnnn) all sales of tangible personal property or services purchased
4533	4533	1
4534	4534	2
4535	4535	3
4536	4536	4
4537	4537	5
4538	4538	6
4539	4539	7
4540	4540	8
4541	4541	9
4542	4542	10
4543	4543	11
4544	4544	12
4545	4545	13
4546	4546	14
4547	4547	15
4548	4548	16
4549	4549	17
4550	4550	18
4551	4551	19
4552	4552	20
4553	4553	21
4554	4554	22
4555	4555	23
4556	4556	24
4557	4557	25
4558	4558	26
4559	4559	27
4560	4560	28
4561	4561	29
4562	4562	30
4563	4563	31
4564	4564	32
4565	4565	33
4566	4566	34
4567	4567	35
4568	4568	36
4569	4569	37
4570	4570	38
4571	4571	39
4572	4572	40
4573	4573	41
4574	4574	42
4575	4575	43 SB 91 54
4576	4576	by friends of hospice of Jefferson county, an organization that is exempt
4577	4577	from federal income taxation pursuant to section 501(c)(3) of the federal
4578	4578	internal revenue code of 1986, for the purpose of providing support to the
4579	4579	Jefferson county hospice agency in end-of-life care of Jefferson county
4580	4580	families, friends and neighbors, and all sales of entry or participation fees,
4581	4581	charges or tickets by friends of hospice of Jefferson county for such
4582	4582	organization's fundraising event for such purpose; and
4583	4583	(oooo) all sales of tangible personal property or services purchased
4584	4584	for the purpose of and in conjunction with constructing, reconstructing,
4585	4585	enlarging or remodeling a qualified business facility by a qualified firm or
4586	4586	qualified supplier that meets the requirements established in K.S.A. 2022
4587	4587	Supp. 74-50,312 and 74-50,319, and amendments thereto, and that has
4588	4588	been approved for a project exemption certificate by the secretary of
4589	4589	commerce, and the sale and installation of machinery and equipment
4590	4590	purchased by such qualified firm or qualified supplier for installation at
4591	4591	any such qualified business facility. When a person shall contract for the
4592	4592	construction, reconstruction, enlargement or remodeling of any such
4593	4593	qualified business facility, such person shall obtain from the state and
4594	4594	furnish to the contractor an exemption certificate for the project involved,
4595	4595	and the contractor may purchase materials, machinery and equipment for
4596	4596	incorporation in such project. The contractor shall furnish the number of
4597	4597	such certificates to all suppliers from whom such purchases are made, and
4598	4598	such suppliers shall execute invoices covering the same such purchases
4599	4599	bearing the number of such certificate. Upon completion of the project, the
4600	4600	contractor shall furnish to the owner of the qualified firm or qualified
4601	4601	supplier a sworn statement, on a form to be provided by the director of
4602	4602	taxation, that all purchases so made were entitled to exemption under this
4603	4603	subsection. All invoices shall be held by the contractor for a period of five
4604	4604	years and shall be subject to audit by the director of taxation. Any
4605	4605	contractor or any agent, employee or subcontractor thereof who shall use
4606	4606	or otherwise dispose of any materials, machinery or equipment purchased
4607	4607	under such a certificate for any purpose other than that for which such a
4608	4608	certificate is issued without the payment of the sales or compensating tax
4609	4609	otherwise imposed thereon, shall be guilty of a misdemeanor and, upon
4610	4610	conviction therefor, shall be subject to the penalties provided for in K.S.A.
4611	4611	79-3615(h), and amendments thereto. As used in this subsection, "qualified
4612	4612	business facility," "qualified firm" and "qualified supplier" mean the same
4613	4613	as defined in K.S.A. 2022 Supp. 74-50,311, and amendments thereto; and
4614	4614	(pppp) all sales of tangible personal property or services constituting
4615	4615	production or postproduction expenditures purchased for the purpose of a
4616	4616	certified project by a production company that meets the requirements
4617	4617	established in section 3, and amendments thereto, and that has been
4618	4618	approved for a project exemption certificate by the secretary of commerce
4619	4619	1
4620	4620	2
4621	4621	3
4622	4622	4
4623	4623	5
4624	4624	6
4625	4625	7
4626	4626	8
4627	4627	9
4628	4628	10
4629	4629	11
4630	4630	12
4631	4631	13
4632	4632	14
4633	4633	15
4634	4634	16
4635	4635	17
4636	4636	18
4637	4637	19
4638	4638	20
4639	4639	21
4640	4640	22
4641	4641	23
4642	4642	24
4643	4643	25
4644	4644	26
4645	4645	27
4646	4646	28
4647	4647	29
4648	4648	30
4649	4649	31
4650	4650	32
4651	4651	33
4652	4652	34
4653	4653	35
4654	4654	36
4655	4655	37
4656	4656	38
4657	4657	39
4658	4658	40
4659	4659	41
4660	4660	42
4661	4661	43 SB 91 55
4662	4662	and the sale and installation of machinery and equipment constituting
4663	4663	production or postproduction expenditures purchased by such production
4664	4664	company for use in this state for a certified project. Such sales tax
4665	4665	exemptions may be limited by the secretary of commerce as provided by
4666	4666	section 3, and amendments thereto. When a production company contracts
4667	4667	for construction, reconstruction, enlargement or remodeling of any facility
4668	4668	for purposes of a certified project that constitutes a production or
4669	4669	postproduction expenditure, the production company shall obtain from the
4670	4670	state and furnish to the contractor an exemption certificate for the
4671	4671	certified project, and the contractor may purchase materials, machinery
4672	4672	and equipment for incorporation in such work. The contractor shall
4673	4673	furnish the number of such certificates to all suppliers from whom such
4674	4674	purchases are made, and such suppliers shall execute invoices covering
4675	4675	such purchases bearing the number of such certificate. Upon completion
4676	4676	of the work, the contractor shall furnish to the owner of the production
4677	4677	company a sworn statement, on a form to be provided by the director of
4678	4678	taxation, that all purchases so made were entitled to exemption under this
4679	4679	subsection and section 3, and amendments thereto. All invoices shall be
4680	4680	held by the contractor for a period of five years and shall be subject to
4681	4681	audit by the director of taxation. Any contractor or any agent, employee or
4682	4682	subcontractor thereof who uses or otherwise disposes of any materials,
4683	4683	machinery or equipment purchased under such a certificate for any
4684	4684	purpose other than that for which such a certificate is issued without the
4685	4685	payment of the sales or compensating tax otherwise imposed thereon shall
4686	4686	be guilty of a misdemeanor and, upon conviction therefor, shall be subject
4687	4687	to the penalties provided for in K.S.A. 79-3615(h), and amendments
4688	4688	thereto. As used in this subsection, "certified project," "postproduction
4689	4689	expenditure," "production company" and "production expenditure" mean
4690	4690	the same as defined in section 2, and amendments thereto.
4691	4691	Sec. 10. K.S.A. 2022 Supp. 79-3606 is hereby repealed.
4692	4692	Sec. 11. This act shall take effect and be in force from and after its
4693	4693	publication in the statute book.
4694	4694	1
4695	4695	2
4696	4696	3
4697	4697	4
4698	4698	5
4699	4699	6
4700	4700	7
4701	4701	8
4702	4702	9
4703	4703	10
4704	4704	11
4705	4705	12
4706	4706	13
4707	4707	14
4708	4708	15
4709	4709	16
4710	4710	17
4711	4711	18
4712	4712	19
4713	4713	20
4714	4714	21
4715	4715	22
4716	4716	23
4717	4717	24
4718	4718	25
4719	4719	26
4720	4720	27
4721	4721	28
4722	4722	29
4723	4723	30
4724	4724	31
4725	4725	32