Kansas Senate Bill SB98 Latest Draft

                            SENATE BILL No. 98
AN ACT concerning data centers; relating to economic development; providing a sales tax 
exemption for the construction or remodeling of a qualified data center in Kansas, the 
purchase of data center equipment, eligible data center costs and certain labor costs to 
qualified firms that commit to a minimum investment of $250,000,000 and meet new 
Kansas jobs and other requirements; prohibiting public utilities from authorizing 
discounted economic development electric rates for customers that construct new or 
expanded facilities that are data centers; requiring qualified data centers to be 
reviewed and approved by the Kansas intelligence fusion center prior to awarding 
public financial assistance or benefits; amending K.S.A. 2024 Supp. 66-101j and 79-
3606 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. For purposes of sections 1 through 3, and 
amendments thereto:
(a) "Commencement of construction" means the date that 
construction, reconstruction, enlargement or remodeling of a qualified 
data center by a qualified firm commences, as determined in the 
agreement required by section 2, and amendments thereto.
(b) "Commencement of operations" means the date that the 
qualified firm commences operations at a qualified data center, as 
determined in the agreement required by section 2, and amendments 
thereto.
(c) "Data center equipment" means equipment or software 
purchased or leased for the processing, storage, retrieval or 
communication of data, regardless of whether the property is or is not 
affixed to or incorporated into real property, including the following:
(1) Servers, routers and connections and computer equipment, 
monitoring and security equipment or systems;
(2) equipment used in the operation of the qualified data center, 
including, but not limited to, backup generators, component parts, 
installations, refreshments, replacements and upgrades;
(3) all equipment necessary to cool and maintain a controlled 
environment for the operation of the computer servers and other 
components of the qualified data center, including, but not limited to, 
chillers, mechanical equipment, refrigerant piping, fuel piping and 
storage, adiabatic and free cooling systems, cooling towers, water 
softeners, air handling units, indoor direct exchange units, fans, ducting 
and filters;
(4) all water conservation systems, including facilities or 
mechanisms that are designed to collect, conserve and reuse water;
(5) all computer server equipment, chassis, networking equipment, 
switches, racks, fiber optic and copper cabling, trays and conduit;
(6) all conduit, ducting and fiber optic and copper cabling directly 
related to connecting one or more distributed qualified data center 
locations regardless of whether located inside or outside a data center;
(7) all software; and
(8) other personal property that is essential to the operations of a 
qualified data center, excluding such property used in the 
administration of the qualified data center.
(d) "Department" means the department of commerce.
(e) (1) "Eligible data center costs" means expenditures for the 
development, acquisition, construction and operation of a qualified data 
center by a qualified firm, including, but not limited to, costs of land, 
buildings, site improvements, data center equipment, data center 
equipment acquisition and permitting, lease payments, site 
characterization and assessment, engineering and design used directly 
and exclusively for a qualified data center.
(2) "Eligible data center costs" does not include the cost of 
electricity.
(f) "New jobs" means newly created jobs with a qualified firm at a 
qualified data center or directly associated with a qualified data center  SENATE BILL No. 98—page 2
filled by Kansas residents and the primary work locations of such jobs 
are in Kansas.
(g) "Qualified data center" means one or more buildings that are 
constructed, reconstructed, enlarged, remodeled or leased to house a 
group of networked computer servers in this state to centralize the 
storage, management and dissemination of data and information 
pertaining to a particular business, taxonomy or body of knowledge and 
such buildings are connected to each other by fiber and associated 
equipment required for operating a fiber transmission network between 
data center buildings and internet points for the purpose of providing 
redundancy and resiliency for the data center services provided in each 
building.
(h) "Qualified firm" means a business or an affiliate thereof that is 
registered with the secretary of state and is engaged in the 
development, operation or leasing of a qualified data center. "Qualified 
firm" does not include a telecommunications carrier or local exchange 
carrier as defined in K.S.A. 66-1,187, and amendments thereto, electing 
carrier as defined in K.S.A. 66-2005(x), and amendments thereto, 
wireless services provider as defined in K.S.A. 66-2019, and 
amendments thereto, or video service provider as defined in K.S.A. 12-
2022, and amendments thereto.
(i) "Secretary" means the secretary of commerce.
New Sec. 2. (a) A qualified firm that makes an investment in 
eligible data center costs in a qualified data center of at least 
$250,000,000 in the aggregate by the fifth year of operations and 
creates and maintains at least 20 new jobs at the qualified data center 
within two calendar years after the commencement of operations shall 
receive a sales tax exemption, as provided by K.S.A. 79-3606(xxxx), 
and amendments thereto, and section 3, and amendments thereto, for:
(1) Eligible data center costs of the qualified data center; and
(2) labor services to install, apply, repair, service, alter or maintain 
data center equipment.
(b) To be eligible to receive such sales tax exemption, a qualified 
firm shall:
(1) Submit an application to the secretary in the form and manner 
as required by the secretary;
(2) commit to an investment in eligible data center costs of at least 
$250,000,000 in the qualified data center, to be completed by the fifth 
year of operations or on such earlier date as specified in the agreement 
pursuant to paragraph (6);
(3) commit to begin construction of the project within 10 years of 
the date of the agreement with the secretary or on such earlier date as 
specified in the agreement pursuant to paragraph (6);
(4) commit to purchase electricity for 10 years from the public 
utility that is certified to provide retail electric service in the territory 
where the qualified data center is located;
(5) commit to undertake practices that will conserve, reuse and 
replace water, including, but not limited to:
(A) Using water efficient fixtures and practices;
(B) treating, infiltrating and harvesting rainwater;
(C) recirculating and recycling water before discharging;
(D) partnering with state and local governmental entities and 
private individuals and entities to use discharged water for irrigation, 
water conservation or other beneficial purposes;
(E) using reclaimed water when possible; and
(F) supporting water restoration efforts in local watersheds; and
(6) if the application is approved by the secretary, enter into an 
agreement with the secretary upon such terms and conditions as the 
secretary may require, including the commitments or conditions  SENATE BILL No. 98—page 3
required by paragraphs (2) through (5) and subsections (c) and (d)(1) 
and (2). The agreement shall be entered into before any sales tax 
exemption may be provided under this act.
(c) If it is determined by the secretary that the qualified firm has 
breached a term or condition of the agreement, the secretary shall 
provide written notice to the qualified firm as to which terms or 
conditions were breached and allow the qualified firm 120 days to cure 
the breached terms or conditions. If the breached terms or conditions 
have not been cured within such time, the secretary may require the 
qualified firm to repay all or a part of the amount of the sales tax 
exemption received, terminate the sales tax exemption or suspend all or 
a part of the sales tax exemption until the breach is cured.
(d) As a condition of receiving the sales tax exemption, a qualified 
firm shall agree to:
(1) Cooperate with audits undertaken by the secretary of revenue 
as provided by subsection (f); and
(2) provide the secretary of commerce information required:
(A) For publication in the economic development incentive 
program information database pursuant to K.S.A. 74-50,226, and 
amendments thereto;
(B) for the secretary's report pursuant to K.S.A. 74-50,320, and 
amendments thereto; and
(C) by the secretary of commerce or the secretary of revenue 
pursuant to subsection (e)(1).
(e) (1) Every five years, the secretary may conduct a review of the 
activities undertaken by a qualified firm to ensure that the qualified 
firm remains in good standing with the state, is in compliance with the 
provisions of this act, any rules and regulations adopted by the 
secretary with respect to this act and any agreement entered into 
pursuant to this section and continues to meet the requirements for the 
sales tax exemption provided under this act. The secretary of commerce 
shall certify every five years to the secretary of revenue whether the 
qualified firm meets the criteria for designation as a qualified firm and 
is eligible for such sales tax exemption. The qualified firm shall 
provide the secretary of commerce all information reasonably 
necessary to determine such eligibility. Except as provided by 
paragraph (2), information obtained under this paragraph shall not be 
subject to disclosure pursuant to K.S.A. 45-215 et seq., and 
amendments thereto, unless such information is subject to disclosure 
pursuant to subsection (d)(1) or (2), but shall, upon request, be made 
available to the legislative post audit division. The provisions of this 
paragraph providing for confidentiality of records shall expire on July 
1, 2030, unless the legislature reviews and acts to continue such 
provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to 
July 1, 2030.
(2) If, in the judgment of the secretary, any confidential 
information, trade secret or other information obtained under this 
section would place the qualified firm at a disadvantage in the 
marketplace or would significantly interfere with the purposes of this 
act, if known, shall not be subject to disclosure pursuant to K.S.A. 45-
215 et seq., and amendments thereto, but shall, upon request, be made 
available to the legislative post audit division. The provisions of this 
paragraph providing for confidentiality of records shall expire on July 
1, 2030, unless the legislature reviews and acts to continue such 
provisions pursuant to K.S.A. 45-229, and amendments thereto, prior to 
July 1, 2030.
(f) The books and records that pertain to eligibility for benefits or 
compliance with the requirements of this act shall be available for 
inspection by the secretary or the secretary's duly authorized agents or  SENATE BILL No. 98—page 4
employees during business hours on at least 60 days' prior written 
notice. The secretary may request the department of revenue to audit 
the qualified firm, or a third party if applicable, for compliance with the 
provisions of this act.
(g) The secretary of commerce shall certify to the secretary of 
revenue when the qualified firm has met the conditions to receive a 
sales tax exemption as provided by sections 3 and 4, and amendments 
thereto, and shall provide notice when the sales tax exemption is 
modified, suspended or terminated pursuant to subsection (c).
(h) The secretary of commerce or the secretary of revenue may 
adopt rules and regulations for the implementation of this act.
New Sec. 3. (a) On and after July 1, 2025, a qualified firm that 
meets the requirements of section 2, and amendments thereto, may be 
eligible for a sales tax exemption as provided by this section and the 
provisions of K.S.A. 79-3606(xxxx), and amendments thereto.
(b) The sales tax exemption shall be valid for 20 years after the 
date of commencement of operations.
(c) No sales tax exemption shall be approved by the secretary of 
revenue unless the qualified firm has been certified by the secretary of 
commerce, as provided in section 2, and amendments thereto, as 
meeting all requirements of this act, the rules and regulations of the 
secretary, if any, and the agreement executed pursuant to section 2, and 
amendments thereto.
(d) A sales tax exemption shall be revoked, suspended or modified 
by the secretary of revenue as requested by the secretary of commerce 
upon notification by the secretary of commerce as provided by section 
2(c) and (g), and amendments thereto.
New Sec. 4. (a) Prior to awarding any public financial assistance 
or benefits to a qualified data center project, including, but not limited 
to, the sales tax exemption established pursuant to K.S.A. 79-
3606(xxxx), and amendments thereto, and sections 1 through 3, and 
amendments thereto, the secretary of commerce shall seek and receive 
approval from the fusion center oversight board established pursuant to 
K.S.A. 48-3705, and amendments thereto.
(b) Upon receipt of an application from the secretary of 
commerce, the Kansas intelligence fusion center shall evaluate the 
equipment and associated software of the qualified data center for 
potential security threats to critical infrastructure and advise the fusion 
center oversight board of any risks associated with such equipment and 
associated software.
(c) The fusion center oversight board may approve the project, 
recommend or require changes to protect critical infrastructure or deny 
such project if the qualified data center, as configured, would pose a 
threat to the critical infrastructure of the state of Kansas.
(d) As used in this section, "qualified data center" means the same 
as defined in section 1, and amendments thereto.
Sec. 5. K.S.A. 2024 Supp. 66-101j is hereby amended to read as 
follows: 66-101j. (a) Notwithstanding the provisions of K.S.A. 66-101b 
or 66-109, and amendments thereto, the commission shall authorize an 
electric public utility to implement economic development rate 
schedules that provide discounts from otherwise applicable standard 
rates for electric service for new or expanded facilities of industrial or 
commercial customers that are not in the business of selling or 
providing goods or services directly to the general public. To be eligible 
for such discounts, such customer shall:
(1) Have incentives from one or more local, regional, state or 
federal economic development agencies to locate such new or 
expanded facilities in the electric public utility's certified service 
territory; SENATE BILL No. 98—page 5
(2) qualify for service under the electric public utility's non-
residential and non-lighting rate schedules for such new or expanded 
facility; and
(3) not receive the discount together with service provided by the 
electric public utility pursuant to any other special contract agreements.
(b) The discount authorized by this section shall only be 
applicable to new facilities or expanded facilities that have:
(1) A peak demand that is reasonably projected to be at least 200 
kilowatts within two years of the date the customer first receives 
service under the discounted rate and is not the result of shifting 
existing demand from other facilities of the customer in the electric 
public utility's certified service territory and:
(A) Has an annual load factor that is reasonably projected to equal 
or exceed the electric public utility's annual system load factor within 
two years of the date the customer first receives service under the 
discounted rate; or
(B) otherwise warrants a discounted rate based on any of the 
following factors:
(i) The number of new permanent full-time jobs created or the 
percentage increase in existing permanent full-time jobs created;
(ii) the level of capital investment;
(iii) additional off-peak usage;
(iv) curtailable or interruptible load;
(v) new industry or technology; or
(vi) competition with existing industrial customers;
(2) a peak demand that is reasonably projected to be at least 300 
kilowatts within two years of the date the customer first receives 
service under the discounted rate and is not the result of shifting 
existing demand from other facilities of the customer in the electric 
public utility's certified service territory and:
(A) An annual load factor that is reasonably projected to be at 
least 55% within two years of the date the customer first receives 
service under the discounted rate; and
(B) the facility shall, once first achieved, maintain the peak 
demand and load factor for the remaining duration of the discounted 
rate; or
(3) a peak demand that is reasonably projected to be at least 25 
megawatts within two years of the date the customer first receives 
service under the discounted rate and is not the result of shifting 
existing demand from other facilities of the customer in the electric 
public utility's certified service territory and:
(A) An annual load factor that is reasonably projected to be at 
least 55% within two years of the date the customer first receives 
service under the discounted rate; and
(B) the facility shall, once first achieved, maintain the peak 
demand and load factor for the remaining duration of the discounted 
rate.
(c) A customer shall not be eligible for the discount authorized by 
this section for any new or expanded facility that is a qualified data 
center as defined in section 1, and amendments thereto.
(d) The discount authorized by this section shall be determined by 
reducing otherwise applicable charges associated with the rate schedule 
applicable to the new or expanded existing facility by a fixed 
percentage for each year of service under the discount for a period of 
up to:
(1) Five years to facilities that qualify pursuant to subsection (b)
(1) or (b)(2); and
(2) 10 years to facilities that qualify pursuant to subsection (b)(3).
(d)(e) (1) For discounts to facilities that qualify pursuant to  SENATE BILL No. 98—page 6
subsection (b)(1), the average of the annual discount percentages shall 
not exceed 20%, except that such discounts may be between 5% to 30% 
in any year of such five-year period.
(2) For discounts to facilities that qualify pursuant to subsection 
(b)(2), the average of the annual discount percentages shall not exceed 
40%, except that such discounts may be between 20% and 50% in any 
year of such five-year period.
(3) For discounts to facilities that qualify pursuant to subsection 
(b)(3), the average of the annual discount percentages shall not exceed:
(A) For the first five years of the discount period, 40%, except that 
such discounts may be between 20% to 50% in any year of such five-
year period; and
(B) for the final five years of the discount period, 20%, except that 
such discounts may be between 10% and 30% in any year of such five-
year period.
(e)(f) (1) Except as provided in paragraph (2), on and after July 1, 
2024, the difference in revenues generated by applying the discounted 
rates authorized pursuant to this section and the revenues that would 
have been generated without such discounts shall not be imputed into 
the electric public utility's revenue requirement.
(2) Any reduction in revenue resulting from any discount provided 
pursuant to this section that was tracked by the public utility and 
deferred to a regulatory asset prior to July 1, 2024, shall be recoverable 
in any general rate proceeding initiated on or after July 1, 2024, 
through an equal percentage adjustment to the revenue requirement 
responsibility for all customer classes of the public utility, including the 
customer classes that include customers qualifying for discounts 
pursuant to this section.
(f)(g) The provisions of this section shall not apply to rates for 
service provided to customers under contract rates approved by the 
commission pursuant to K.S.A. 2024 Supp. 66-101i, and amendments 
thereto, or the commission's general ratemaking authority according to 
custom and practice of the commission in place prior to the effective 
date of this section.
(g)(h) Starting in January 2023, the commission shall biennially 
provide a status report to the legislature about any discounts from 
tariffed rates authorized pursuant to this section. Such report shall 
include the:
(1) Number of entities with such discounts;
(2) number of entities with increased load;
(3) number of entities with decreased load;
(4) aggregate load and change in aggregate load on an annual 
basis;
(5) total subsidy and the subsidy for each individual contract;
(6) annual and cumulative rate impact on non-contract rate 
customers; and
(7) estimated economic development impact of entities with 
discounted rates that occurred as a result of such discounts through an 
evaluation of the annual: (A) Total employment for such entities; (B) 
change in employment for such entities; and (C) tax revenue generated 
by such entities.
(h)(i) An electric public utility shall be authorized to only 
implement discounted rates for facilities that qualify for such 
discounted rates pursuant to subsection (b)(3) until December 31, 2030, 
except that, upon application by such public utility, the commission 
may authorize the public utility to continue to implement such 
discounted rates for facilities that qualify for such discounted rates 
pursuant to subsection (b)(3) until December 31, 2036. Any such 
application shall be filed with the commission on or before December  SENATE BILL No. 98—page 7
31, 2028. The commission shall issue a determination on an application 
filed pursuant to this subsection within 240 days of the date that such 
application is filed. If requested by the public utility, an intervenor in 
the application docket or commission staff, the commission shall hold a 
hearing on such application. When considering and making a 
determination upon such application, the commission may consider 
factors that the commission deems just and reasonable and condition 
the commission's determination on any factors that are relevant to the 
discounted rates for facilities that qualify for such discounted rates 
pursuant to subsection (b)(3). If the commission denies the public 
utility's application, such denial shall only act to prohibit the public 
utility from implementing discounted rates for facilities that qualify for 
such discounted rates pursuant to subsection (b)(3) after December 31, 
2030, and shall not otherwise affect or terminate any discounted rates 
implemented by the public utility pursuant to this section or any 
regulatory or ratemaking treatment of such discounted rates.
(i)(j) For the purposes of this section:
(1) "Electric public utility" means the same as defined in K.S.A. 
66-101a, and amendments thereto, but does not include any such utility 
that is a cooperative as defined in K.S.A. 66-104d, and amendments 
thereto, or owned by one or more such cooperatives;
(2) "expanded facility" means a separately metered facility of the 
customer, unless the utility determines that the additional costs of 
separate metering of such facility would exceed the associated benefits 
or that it would be difficult or impractical to install or read the meter, 
that has not received service in the electric utility's certified service 
territory in the previous 12 months; and
(3) "new facility" means a building of the customer that has not 
received electric service in the electric utility's certified service territory 
in the previous 12 months.
Sec. 6. K.S.A. 2024 Supp. 79-3606 is hereby amended to read as 
follows: 79-3606. The following shall be exempt from the tax imposed 
by this act:
(a) All sales of motor-vehicle fuel or other articles upon which a 
sales or excise tax has been paid, not subject to refund, under the laws 
of this state except cigarettes and electronic cigarettes as defined by 
K.S.A. 79-3301, and amendments thereto, including consumable 
material for such electronic cigarettes, cereal malt beverages and malt 
products as defined by K.S.A. 79-3817, and amendments thereto, 
including wort, liquid malt, malt syrup and malt extract, that is not 
subject to taxation under the provisions of K.S.A. 79-41a02, and 
amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, 
and amendments thereto, tires taxed pursuant to K.S.A. 65-3424d, and 
amendments thereto, drycleaning and laundry services taxed pursuant 
to K.S.A. 65-34,150, and amendments thereto, and gross receipts from 
regulated sports contests taxed pursuant to the Kansas professional 
regulated sports act, and amendments thereto;
(b) all sales of tangible personal property or service, including the 
renting and leasing of tangible personal property, purchased directly by 
the state of Kansas, a political subdivision thereof, other than a school 
or educational institution, or purchased by a public or private nonprofit 
hospital, public hospital authority, nonprofit blood, tissue or organ bank 
or nonprofit integrated community care organization and used 
exclusively for state, political subdivision, hospital, public hospital 
authority, nonprofit blood, tissue or organ bank or nonprofit integrated 
community care organization purposes, except when: (1) Such state, 
hospital or public hospital authority is engaged or proposes to engage 
in any business specifically taxable under the provisions of this act and 
such items of tangible personal property or service are used or  SENATE BILL No. 98—page 8
proposed to be used in such business; or (2) such political subdivision 
is engaged or proposes to engage in the business of furnishing gas, 
electricity or heat to others and such items of personal property or 
service are used or proposed to be used in such business;
(c) all sales of tangible personal property or services, including the 
renting and leasing of tangible personal property, purchased directly by 
a public or private elementary or secondary school or public or private 
nonprofit educational institution and used primarily by such school or 
institution for nonsectarian programs and activities provided or 
sponsored by such school or institution or in the erection, repair or 
enlargement of buildings to be used for such purposes. The exemption 
herein provided shall not apply to erection, construction, repair, 
enlargement or equipment of buildings used primarily for human 
habitation, except that such exemption shall apply to the erection, 
construction, repair, enlargement or equipment of buildings used for 
human habitation by the cerebral palsy research foundation of Kansas 
located in Wichita, Kansas, multi community diversified services, 
incorporated, located in McPherson, Kansas, the Kansas state school 
for the blind and the Kansas state school for the deaf;
(d) all sales of tangible personal property or services purchased by 
a contractor for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
any public or private nonprofit hospital or public hospital authority, 
public or private elementary or secondary school, a public or private 
nonprofit educational institution, state correctional institution including 
a privately constructed correctional institution contracted for state use 
and ownership, that would be exempt from taxation under the 
provisions of this act if purchased directly by such hospital or public 
hospital authority, school, educational institution or a state correctional 
institution; and all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities for any political subdivision of the state or district 
described in subsection (s), the total cost of which is paid from funds of 
such political subdivision or district and that would be exempt from 
taxation under the provisions of this act if purchased directly by such 
political subdivision or district. Nothing in this subsection or in the 
provisions of K.S.A. 12-3418, and amendments thereto, shall be 
deemed to exempt the purchase of any construction machinery, 
equipment or tools used in the constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
any political subdivision of the state or any such district. As used in this 
subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto, 
"funds of a political subdivision" shall mean general tax revenues, the 
proceeds of any bonds and gifts or grants-in-aid. Gifts shall not mean 
funds used for the purpose of constructing, equipping, reconstructing, 
repairing, enlarging, furnishing or remodeling facilities that are to be 
leased to the donor. When any political subdivision of the state, district 
described in subsection (s), public or private nonprofit hospital or 
public hospital authority, public or private elementary or secondary 
school, public or private nonprofit educational institution, state 
correctional institution including a privately constructed correctional 
institution contracted for state use and ownership shall contract for the 
purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities, it shall obtain 
from the state and furnish to the contractor an exemption certificate for 
the project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificate to all suppliers from whom such purchases are made,  SENATE BILL No. 98—page 9
and such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the 
contractor shall furnish to the political subdivision, district described in 
subsection (s), hospital or public hospital authority, school, educational 
institution or department of corrections concerned a sworn statement, 
on a form to be provided by the director of taxation, that all purchases 
so made were entitled to exemption under this subsection. As an 
alternative to the foregoing procedure, any such contracting entity may 
apply to the secretary of revenue for agent status for the sole purpose of 
issuing and furnishing project exemption certificates to contractors 
pursuant to rules and regulations adopted by the secretary establishing 
conditions and standards for the granting and maintaining of such 
status. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or 
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, the 
political subdivision, district described in subsection (s), hospital or 
public hospital authority, school, educational institution or the 
contractor contracting with the department of corrections for a 
correctional institution concerned shall be liable for tax on all materials 
purchased for the project, and upon payment thereof it may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof, who shall 
use or otherwise dispose of any materials purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto;
(e) all sales of tangible personal property or services purchased by 
a contractor for the erection, repair or enlargement of buildings or other 
projects for the government of the United States, its agencies or 
instrumentalities, that would be exempt from taxation if purchased 
directly by the government of the United States, its agencies or 
instrumentalities. When the government of the United States, its 
agencies or instrumentalities shall contract for the erection, repair, or 
enlargement of any building or other project, it shall obtain from the 
state and furnish to the contractor an exemption certificate for the 
project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificates to all suppliers from whom such purchases are 
made, and such suppliers shall execute invoices covering the same 
bearing the number of such certificate. Upon completion of the project 
the contractor shall furnish to the government of the United States, its 
agencies or instrumentalities concerned a sworn statement, on a form to 
be provided by the director of taxation, that all purchases so made were 
entitled to exemption under this subsection. As an alternative to the 
foregoing procedure, any such contracting entity may apply to the 
secretary of revenue for agent status for the sole purpose of issuing and 
furnishing project exemption certificates to contractors pursuant to 
rules and regulations adopted by the secretary establishing conditions 
and standards for the granting and maintaining of such status. All 
invoices shall be held by the contractor for a period of five years and  SENATE BILL No. 98—page 10
shall be subject to audit by the director of taxation. Any contractor or 
any agent, employee or subcontractor thereof, who shall use or 
otherwise dispose of any materials purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto;
(f) tangible personal property purchased by a railroad or public 
utility for consumption or movement directly and immediately in 
interstate commerce;
(g) sales of aircraft including remanufactured and modified 
aircraft sold to persons using directly or through an authorized agent 
such aircraft as certified or licensed carriers of persons or property in 
interstate or foreign commerce under authority of the laws of the 
United States or any foreign government or sold to any foreign 
government or agency or instrumentality of such foreign government 
and all sales of aircraft for use outside of the United States and sales of 
aircraft repair, modification and replacement parts and sales of services 
employed in the remanufacture, modification and repair of aircraft;
(h) all rentals of nonsectarian textbooks by public or private 
elementary or secondary schools;
(i) the lease or rental of all films, records, tapes, or any type of 
sound or picture transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of 
such meals to employees of any restaurant, eating house, dining car, 
hotel, drugstore or other place where meals or drinks are regularly sold 
to the public if such employees' duties are related to the furnishing or 
sale of such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are 
defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and 
delivered in this state to a bona fide resident of another state, which 
motor vehicle, semitrailer, pole trailer or aircraft is not to be registered 
or based in this state and which vehicle, semitrailer, pole trailer or 
aircraft will not remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, 
services, substances or things, except isolated or occasional sale of 
motor vehicles specifically taxed under the provisions of K.S.A. 79-
3603(o), and amendments thereto;
(m) all sales of tangible personal property that become an 
ingredient or component part of tangible personal property or services 
produced, manufactured or compounded for ultimate sale at retail 
within or without the state of Kansas; and any such producer, 
manufacturer or compounder may obtain from the director of taxation 
and furnish to the supplier an exemption certificate number for tangible 
personal property for use as an ingredient or component part of the 
property or services produced, manufactured or compounded;
(n) all sales of tangible personal property that is consumed in the 
production, manufacture, processing, mining, drilling, refining or 
compounding of tangible personal property, the treating of by-products 
or wastes derived from any such production process, the providing of 
services or the irrigation of crops for ultimate sale at retail within or 
without the state of Kansas; and any purchaser of such property may 
obtain from the director of taxation and furnish to the supplier an 
exemption certificate number for tangible personal property for 
consumption in such production, manufacture, processing, mining, 
drilling, refining, compounding, treating, irrigation and in providing 
such services;
(o) all sales of animals, fowl and aquatic plants and animals, the  SENATE BILL No. 98—page 11
primary purpose of which is use in agriculture or aquaculture, as 
defined in K.S.A. 47-1901, and amendments thereto, the production of 
food for human consumption, the production of animal, dairy, poultry 
or aquatic plant and animal products, fiber or fur, or the production of 
offspring for use for any such purpose or purposes;
(p) all sales of drugs dispensed pursuant to a prescription order by 
a licensed practitioner or a mid-level practitioner as defined by K.S.A. 
65-1626, and amendments thereto. As used in this subsection, "drug" 
means a compound, substance or preparation and any component of a 
compound, substance or preparation, other than food and food 
ingredients, dietary supplements or alcoholic beverages, recognized in 
the official United States pharmacopeia, official homeopathic 
pharmacopoeia of the United States or official national formulary, and 
supplement to any of them, intended for use in the diagnosis, cure, 
mitigation, treatment or prevention of disease or intended to affect the 
structure or any function of the body, except that for taxable years 
commencing after December 31, 2013, this subsection shall not apply 
to any sales of drugs used in the performance or induction of an 
abortion, as defined in K.S.A. 65-6701, and amendments thereto;
(q) all sales of insulin dispensed by a person licensed by the state 
board of pharmacy to a person for treatment of diabetes at the direction 
of a person licensed to practice medicine by the state board of healing 
arts;
(r) all sales of oxygen delivery equipment, kidney dialysis 
equipment, enteral feeding systems, prosthetic devices and mobility 
enhancing equipment prescribed in writing by a person licensed to 
practice the healing arts, dentistry or optometry, and in addition to such 
sales, all sales of hearing aids, as defined by K.S.A. 74-5807(c), and 
amendments thereto, and repair and replacement parts therefor, 
including batteries, by a person licensed in the practice of dispensing 
and fitting hearing aids pursuant to the provisions of K.S.A. 74-5808, 
and amendments thereto. For the purposes of this subsection: (1) 
"Mobility enhancing equipment" means equipment including repair and 
replacement parts to same, but does not include durable medical 
equipment, which is primarily and customarily used to provide or 
increase the ability to move from one place to another and which is 
appropriate for use either in a home or a motor vehicle; is not generally 
used by persons with normal mobility; and does not include any motor 
vehicle or equipment on a motor vehicle normally provided by a motor 
vehicle manufacturer; and (2) "prosthetic device" means a replacement, 
corrective or supportive device including repair and replacement parts 
for same worn on or in the body to artificially replace a missing portion 
of the body, prevent or correct physical deformity or malfunction or 
support a weak or deformed portion of the body;
(s) except as provided in K.S.A. 82a-2101, and amendments 
thereto, all sales of tangible personal property or services purchased 
directly or indirectly by a groundwater management district organized 
or operating under the authority of K.S.A. 82a-1020 et seq., and 
amendments thereto, by a rural water district organized or operating 
under the authority of K.S.A. 82a-612, and amendments thereto, or by a 
water supply district organized or operating under the authority of 
K.S.A. 19-3501 et seq., 19-3522 et seq. or 19-3545, and amendments 
thereto, which property or services are used in the construction 
activities, operation or maintenance of the district;
(t) all sales of farm machinery and equipment or aquaculture 
machinery and equipment, repair and replacement parts therefor and 
services performed in the repair and maintenance of such machinery 
and equipment. For the purposes of this subsection the term "farm 
machinery and equipment or aquaculture machinery and equipment"  SENATE BILL No. 98—page 12
shall include a work-site utility vehicle, as defined in K.S.A. 8-126, and 
amendments thereto, and is equipped with a bed or cargo box for 
hauling materials, and shall also include machinery and equipment used 
in the operation of Christmas tree farming but shall not include any 
passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, 
other than a farm trailer, as such terms are defined by K.S.A. 8-126, 
and amendments thereto. "Farm machinery and equipment" includes 
precision farming equipment that is portable or is installed or purchased 
to be installed on farm machinery and equipment. "Precision farming 
equipment" includes the following items used only in computer-
assisted farming, ranching or aquaculture production operations: Soil 
testing sensors, yield monitors, computers, monitors, software, global 
positioning and mapping systems, guiding systems, modems, data 
communications equipment and any necessary mounting hardware, 
wiring and antennas. Each purchaser of farm machinery and equipment 
or aquaculture machinery and equipment exempted herein must certify 
in writing on the copy of the invoice or sales ticket to be retained by the 
seller that the farm machinery and equipment or aquaculture machinery 
and equipment purchased will be used only in farming, ranching or 
aquaculture production. Farming or ranching shall include the operation 
of a feedlot and farm and ranch work for hire and the operation of a 
nursery;
(u) all leases or rentals of tangible personal property used as a 
dwelling if such tangible personal property is leased or rented for a 
period of more than 28 consecutive days;
(v) all sales of tangible personal property to any contractor for use 
in preparing meals for delivery to homebound elderly persons over 60 
years of age and to homebound disabled persons or to be served at a 
group-sitting at a location outside of the home to otherwise homebound 
elderly persons over 60 years of age and to otherwise homebound 
disabled persons, as all or part of any food service project funded in 
whole or in part by government or as part of a private nonprofit food 
service project available to all such elderly or disabled persons residing 
within an area of service designated by the private nonprofit 
organization, and all sales of tangible personal property for use in 
preparing meals for consumption by indigent or homeless individuals 
whether or not such meals are consumed at a place designated for such 
purpose, and all sales of food products by or on behalf of any such 
contractor or organization for any such purpose;
(w) all sales of natural gas, electricity, heat and water delivered 
through mains, lines or pipes: (1) To residential premises for 
noncommercial use by the occupant of such premises; (2) for 
agricultural use and also, for such use, all sales of propane gas; (3) for 
use in the severing of oil; and (4) to any property which is exempt from 
property taxation pursuant to K.S.A. 79-201b, Second through Sixth. 
As used in this paragraph, "severing" means the same as defined in 
K.S.A. 79-4216(k), and amendments thereto. For all sales of natural 
gas, electricity and heat delivered through mains, lines or pipes 
pursuant to the provisions of subsection (w)(1) and (w)(2), the 
provisions of this subsection shall expire on December 31, 2005;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel 
sources for the production of heat or lighting for noncommercial use of 
an occupant of residential premises occurring prior to January 1, 2006;
(y) all sales of materials and services used in the repairing, 
servicing, altering, maintaining, manufacturing, remanufacturing, or 
modification of railroad rolling stock for use in interstate or foreign 
commerce under authority of the laws of the United States;
(z) all sales of tangible personal property and services purchased 
directly by a port authority or by a contractor therefor as provided by  SENATE BILL No. 98—page 13
the provisions of K.S.A. 12-3418, and amendments thereto;
(aa) all sales of materials and services applied to equipment that is 
transported into the state from without the state for repair, service, 
alteration, maintenance, remanufacture or modification and that is 
subsequently transported outside the state for use in the transmission of 
liquids or natural gas by means of pipeline in interstate or foreign 
commerce under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As 
used in this subsection: (1) "Mobile homes" and "manufactured homes" 
mean the same as defined in K.S.A. 58-4202, and amendments thereto; 
and (2) "sales of used mobile homes or manufactured homes" means 
sales other than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased 
prior to January 1, 2012, except as otherwise provided, for the purpose 
of and in conjunction with constructing, reconstructing, enlarging or 
remodeling a business or retail business that meets the requirements 
established in K.S.A. 74-50,115, and amendments thereto, and the sale 
and installation of machinery and equipment purchased for installation 
at any such business or retail business, and all sales of tangible personal 
property or services purchased on or after January 1, 2012, for the 
purpose of and in conjunction with constructing, reconstructing, 
enlarging or remodeling a business that meets the requirements 
established in K.S.A. 74-50,115(e), and amendments thereto, and the 
sale and installation of machinery and equipment purchased for 
installation at any such business. When a person shall contract for the 
construction, reconstruction, enlargement or remodeling of any such 
business or retail business, such person shall obtain from the state and 
furnish to the contractor an exemption certificate for the project 
involved, and the contractor may purchase materials, machinery and 
equipment for incorporation in such project. The contractor shall 
furnish the number of such certificates to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering 
the same bearing the number of such certificate. Upon completion of 
the project the contractor shall furnish to the owner of the business or 
retail business a sworn statement, on a form to be provided by the 
director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any 
materials, machinery or equipment purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed thereon, shall be guilty of a misdemeanor and, upon 
conviction therefor, shall be subject to the penalties provided for in 
K.S.A. 79-3615(h), and amendments thereto. As used in this 
subsection, "business" and "retail business" mean the same as defined 
in K.S.A. 74-50,114, and amendments thereto. Project exemption 
certificates that have been previously issued under this subsection by 
the department of revenue pursuant to K.S.A. 74-50,115, and 
amendments thereto, but not including K.S.A. 74-50,115(e), and 
amendments thereto, prior to January 1, 2012, and have not expired 
will be effective for the term of the project or two years from the 
effective date of the certificate, whichever occurs earlier. Project 
exemption certificates that are submitted to the department of revenue 
prior to January 1, 2012, and are found to qualify will be issued a 
project exemption certificate that will be effective for a two-year period 
or for the term of the project, whichever occurs earlier;
(dd) all sales of tangible personal property purchased with food  SENATE BILL No. 98—page 14
stamps issued by the United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery 
operated by the state of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or 
manufactured homes to the extent of 40% of the gross receipts, 
determined without regard to any trade-in allowance, received from 
such sale. As used in this subsection, "mobile homes" and 
"manufactured homes" mean the same as defined in K.S.A. 58-4202, 
and amendments thereto;
(gg) all sales of tangible personal property purchased in 
accordance with vouchers issued pursuant to the federal special 
supplemental food program for women, infants and children;
(hh) all sales of medical supplies and equipment, including 
durable medical equipment, purchased directly by a nonprofit skilled 
nursing home or nonprofit intermediate nursing care home, as defined 
by K.S.A. 39-923, and amendments thereto, for the purpose of 
providing medical services to residents thereof. This exemption shall 
not apply to tangible personal property customarily used for human 
habitation purposes. As used in this subsection, "durable medical 
equipment" means equipment including repair and replacement parts 
for such equipment, that can withstand repeated use, is primarily and 
customarily used to serve a medical purpose, generally is not useful to a 
person in the absence of illness or injury and is not worn in or on the 
body, but does not include mobility enhancing equipment as defined in 
subsection (r), oxygen delivery equipment, kidney dialysis equipment 
or enteral feeding systems;
(ii) all sales of tangible personal property purchased directly by a 
nonprofit organization for nonsectarian comprehensive multidiscipline 
youth development programs and activities provided or sponsored by 
such organization, and all sales of tangible personal property by or on 
behalf of any such organization. This exemption shall not apply to 
tangible personal property customarily used for human habitation 
purposes;
(jj) all sales of tangible personal property or services, including 
the renting and leasing of tangible personal property, purchased directly 
on behalf of a community-based facility for people with intellectual 
disability or mental health center organized pursuant to K.S.A. 19-4001 
et seq., and amendments thereto, and licensed in accordance with the 
provisions of K.S.A. 39-2001 et seq., and amendments thereto, and all 
sales of tangible personal property or services purchased by contractors 
during the time period from July, 2003, through June, 2006, for the 
purpose of constructing, equipping, maintaining or furnishing a new 
facility for a community-based facility for people with intellectual 
disability or mental health center located in Riverton, Cherokee County, 
Kansas, that would have been eligible for sales tax exemption pursuant 
to this subsection if purchased directly by such facility or center. This 
exemption shall not apply to tangible personal property customarily 
used for human habitation purposes;
(kk) (1) (A) all sales of machinery and equipment that are used in 
this state as an integral or essential part of an integrated production 
operation by a manufacturing or processing plant or facility;
(B) all sales of installation, repair and maintenance services 
performed on such machinery and equipment; and
(C) all sales of repair and replacement parts and accessories 
purchased for such machinery and equipment.
(2) For purposes of this subsection:
(A) "Integrated production operation" means an integrated series 
of operations engaged in at a manufacturing or processing plant or 
facility to process, transform or convert tangible personal property by  SENATE BILL No. 98—page 15
physical, chemical or other means into a different form, composition or 
character from that in which it originally existed. Integrated production 
operations shall include: (i) Production line operations, including 
packaging operations; (ii) preproduction operations to handle, store and 
treat raw materials; (iii) post production handling, storage, warehousing 
and distribution operations; and (iv) waste, pollution and environmental 
control operations, if any;
(B) "production line" means the assemblage of machinery and 
equipment at a manufacturing or processing plant or facility where the 
actual transformation or processing of tangible personal property 
occurs;
(C) "manufacturing or processing plant or facility" means a single, 
fixed location owned or controlled by a manufacturing or processing 
business that consists of one or more structures or buildings in a 
contiguous area where integrated production operations are conducted 
to manufacture or process tangible personal property to be ultimately 
sold at retail. Such term shall not include any facility primarily 
operated for the purpose of conveying or assisting in the conveyance of 
natural gas, electricity, oil or water. A business may operate one or 
more manufacturing or processing plants or facilities at different 
locations to manufacture or process a single product of tangible 
personal property to be ultimately sold at retail;
(D) "manufacturing or processing business" means a business that 
utilizes an integrated production operation to manufacture, process, 
fabricate, finish or assemble items for wholesale and retail distribution 
as part of what is commonly regarded by the general public as an 
industrial manufacturing or processing operation or an agricultural 
commodity processing operation. (i) Industrial manufacturing or 
processing operations include, by way of illustration but not of 
limitation, the fabrication of automobiles, airplanes, machinery or 
transportation equipment, the fabrication of metal, plastic, wood or 
paper products, electricity power generation, water treatment, 
petroleum refining, chemical production, wholesale bottling, newspaper 
printing, ready mixed concrete production, and the remanufacturing of 
used parts for wholesale or retail sale. Such processing operations shall 
include operations at an oil well, gas well, mine or other excavation site 
where the oil, gas, minerals, coal, clay, stone, sand or gravel that has 
been extracted from the earth is cleaned, separated, crushed, ground, 
milled, screened, washed or otherwise treated or prepared before its 
transmission to a refinery or before any other wholesale or retail 
distribution. (ii) Agricultural commodity processing operations include, 
by way of illustration but not of limitation, meat packing, poultry 
slaughtering and dressing, processing and packaging farm and dairy 
products in sealed containers for wholesale and retail distribution, feed 
grinding, grain milling, frozen food processing, and grain handling, 
cleaning, blending, fumigation, drying and aeration operations engaged 
in by grain elevators or other grain storage facilities. (iii) 
Manufacturing or processing businesses do not include, by way of 
illustration but not of limitation, nonindustrial businesses whose 
operations are primarily retail and that produce or process tangible 
personal property as an incidental part of conducting the retail business, 
such as retailers who bake, cook or prepare food products in the regular 
course of their retail trade, grocery stores, meat lockers and meat 
markets that butcher or dress livestock or poultry in the regular course 
of their retail trade, contractors who alter, service, repair or improve 
real property, and retail businesses that clean, service or refurbish and 
repair tangible personal property for its owner;
(E) "repair and replacement parts and accessories" means all parts 
and accessories for exempt machinery and equipment, including, but  SENATE BILL No. 98—page 16
not limited to, dies, jigs, molds, patterns and safety devices that are 
attached to exempt machinery or that are otherwise used in production, 
and parts and accessories that require periodic replacement such as 
belts, drill bits, grinding wheels, grinding balls, cutting bars, saws, 
refractory brick and other refractory items for exempt kiln equipment 
used in production operations;
(F) "primary" or "primarily" mean more than 50% of the time.
(3) For purposes of this subsection, machinery and equipment 
shall be deemed to be used as an integral or essential part of an 
integrated production operation when used to:
(A) Receive, transport, convey, handle, treat or store raw materials 
in preparation of its placement on the production line;
(B) transport, convey, handle or store the property undergoing 
manufacturing or processing at any point from the beginning of the 
production line through any warehousing or distribution operation of 
the final product that occurs at the plant or facility;
(C) act upon, effect, promote or otherwise facilitate a physical 
change to the property undergoing manufacturing or processing;
(D) guide, control or direct the movement of property undergoing 
manufacturing or processing;
(E) test or measure raw materials, the property undergoing 
manufacturing or processing or the finished product, as a necessary part 
of the manufacturer's integrated production operations;
(F) plan, manage, control or record the receipt and flow of 
inventories of raw materials, consumables and component parts, the 
flow of the property undergoing manufacturing or processing and the 
management of inventories of the finished product;
(G) produce energy for, lubricate, control the operating of or 
otherwise enable the functioning of other production machinery and 
equipment and the continuation of production operations;
(H) package the property being manufactured or processed in a 
container or wrapping in which such property is normally sold or 
transported;
(I) transmit or transport electricity, coke, gas, water, steam or 
similar substances used in production operations from the point of 
generation, if produced by the manufacturer or processor at the plant 
site, to that manufacturer's production operation; or, if purchased or 
delivered from off-site, from the point where the substance enters the 
site of the plant or facility to that manufacturer's production operations;
(J) cool, heat, filter, refine or otherwise treat water, steam, acid, 
oil, solvents or other substances that are used in production operations;
(K) provide and control an environment required to maintain 
certain levels of air quality, humidity or temperature in special and 
limited areas of the plant or facility, where such regulation of 
temperature or humidity is part of and essential to the production 
process;
(L) treat, transport or store waste or other byproducts of 
production operations at the plant or facility; or
(M) control pollution at the plant or facility where the pollution is 
produced by the manufacturing or processing operation.
(4) The following machinery, equipment and materials shall be 
deemed to be exempt even though it may not otherwise qualify as 
machinery and equipment used as an integral or essential part of an 
integrated production operation: (A) Computers and related peripheral 
equipment that are utilized by a manufacturing or processing business 
for engineering of the finished product or for research and development 
or product design; (B) machinery and equipment that is utilized by a 
manufacturing or processing business to manufacture or rebuild 
tangible personal property that is used in manufacturing or processing  SENATE BILL No. 98—page 17
operations, including tools, dies, molds, forms and other parts of 
qualifying machinery and equipment; (C) portable plants for aggregate 
concrete, bulk cement and asphalt including cement mixing drums to be 
attached to a motor vehicle; (D) industrial fixtures, devices, support 
facilities and special foundations necessary for manufacturing and 
production operations, and materials and other tangible personal 
property sold for the purpose of fabricating such fixtures, devices, 
facilities and foundations. An exemption certificate for such purchases 
shall be signed by the manufacturer or processor. If the fabricator 
purchases such material, the fabricator shall also sign the exemption 
certificate; (E) a manufacturing or processing business' laboratory 
equipment that is not located at the plant or facility, but that would 
otherwise qualify for exemption under subsection (3)(E); (F) all 
machinery and equipment used in surface mining activities as described 
in K.S.A. 49-601 et seq., and amendments thereto, beginning from the 
time a reclamation plan is filed to the acceptance of the completed final 
site reclamation.
(5) "Machinery and equipment used as an integral or essential part 
of an integrated production operation" shall not include:
(A) Machinery and equipment used for nonproduction purposes, 
including, but not limited to, machinery and equipment used for plant 
security, fire prevention, first aid, accounting, administration, record 
keeping, advertising, marketing, sales or other related activities, plant 
cleaning, plant communications and employee work scheduling;
(B) machinery, equipment and tools used primarily in maintaining 
and repairing any type of machinery and equipment or the building and 
plant;
(C) transportation, transmission and distribution equipment not 
primarily used in a production, warehousing or material handling 
operation at the plant or facility, including the means of conveyance of 
natural gas, electricity, oil or water, and equipment related thereto, 
located outside the plant or facility;
(D) office machines and equipment including computers and 
related peripheral equipment not used directly and primarily to control 
or measure the manufacturing process;
(E) furniture and other furnishings;
(F) buildings, other than exempt machinery and equipment that is 
permanently affixed to or becomes a physical part of the building, and 
any other part of real estate that is not otherwise exempt;
(G) building fixtures that are not integral to the manufacturing 
operation, such as utility systems for heating, ventilation, air 
conditioning, communications, plumbing or electrical;
(H) machinery and equipment used for general plant heating, 
cooling and lighting;
(I) motor vehicles that are registered for operation on public 
highways; or
(J) employee apparel, except safety and protective apparel that is 
purchased by an employer and furnished gratuitously to employees 
who are involved in production or research activities.
(6) Paragraphs (3) and (5) shall not be construed as exclusive 
listings of the machinery and equipment that qualify or do not qualify 
as an integral or essential part of an integrated production operation. 
When machinery or equipment is used as an integral or essential part of 
production operations part of the time and for nonproduction purposes 
at other times, the primary use of the machinery or equipment shall 
determine whether or not such machinery or equipment qualifies for 
exemption.
(7) The secretary of revenue shall adopt rules and regulations 
necessary to administer the provisions of this subsection; SENATE BILL No. 98—page 18
(ll) all sales of educational materials purchased for distribution to 
the public at no charge by a nonprofit corporation organized for the 
purpose of encouraging, fostering and conducting programs for the 
improvement of public health, except that for taxable years 
commencing after December 31, 2013, this subsection shall not apply 
to any sales of such materials purchased by a nonprofit corporation 
which performs any abortion, as defined in K.S.A. 65-6701, and 
amendments thereto;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, 
herbicides, germicides, pesticides and fungicides; and services, 
purchased and used for the purpose of producing plants in order to 
prevent soil erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services 
rendered by an advertising agency or licensed broadcast station or any 
member, agent or employee thereof;
(oo) all sales of tangible personal property purchased by a 
community action group or agency for the exclusive purpose of 
repairing or weatherizing housing occupied by low-income individuals;
(pp) all sales of drill bits and explosives actually utilized in the 
exploration and production of oil or gas;
(qq) all sales of tangible personal property and services purchased 
by a nonprofit museum or historical society or any combination thereof, 
including a nonprofit organization that is organized for the purpose of 
stimulating public interest in the exploration of space by providing 
educational information, exhibits and experiences, that is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986;
(rr) all sales of tangible personal property that will admit the 
purchaser thereof to any annual event sponsored by a nonprofit 
organization that is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, except 
that for taxable years commencing after December 31, 2013, this 
subsection shall not apply to any sales of such tangible personal 
property purchased by a nonprofit organization which performs any 
abortion, as defined in K.S.A. 65-6701, and amendments thereto;
(ss) all sales of tangible personal property and services purchased 
by a public broadcasting station licensed by the federal 
communications commission as a noncommercial educational 
television or radio station;
(tt) all sales of tangible personal property and services purchased 
by or on behalf of a not-for-profit corporation that is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, for the sole purpose of constructing a 
Kansas Korean War memorial;
(uu) all sales of tangible personal property and services purchased 
by or on behalf of any rural volunteer fire-fighting organization for use 
exclusively in the performance of its duties and functions;
(vv) all sales of tangible personal property purchased by any of the 
following organizations that are exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code of 
1986, for the following purposes, and all sales of any such property by 
or on behalf of any such organization for any such purpose:
(1) The American heart association, Kansas affiliate, inc. for the 
purposes of providing education, training, certification in emergency 
cardiac care, research and other related services to reduce disability and 
death from cardiovascular diseases and stroke;
(2) the Kansas alliance for the mentally ill, inc. for the purpose of 
advocacy for persons with mental illness and to education, research and 
support for their families; SENATE BILL No. 98—page 19
(3) the Kansas mental illness awareness council for the purposes 
of advocacy for persons who are mentally ill and for education, 
research and support for them and their families;
(4) the American diabetes association Kansas affiliate, inc. for the 
purpose of eliminating diabetes through medical research, public 
education focusing on disease prevention and education, patient 
education including information on coping with diabetes, and 
professional education and training;
(5) the American lung association of Kansas, inc. for the purpose 
of eliminating all lung diseases through medical research, public 
education including information on coping with lung diseases, 
professional education and training related to lung disease and other 
related services to reduce the incidence of disability and death due to 
lung disease;
(6) the Kansas chapters of the Alzheimer's disease and related 
disorders association, inc. for the purpose of providing assistance and 
support to persons in Kansas with Alzheimer's disease, and their 
families and caregivers;
(7) the Kansas chapters of the Parkinson's disease association for 
the purpose of eliminating Parkinson's disease through medical 
research and public and professional education related to such disease;
(8) the national kidney foundation of Kansas and western Missouri 
for the purpose of eliminating kidney disease through medical research 
and public and private education related to such disease;
(9) the heartstrings community foundation for the purpose of 
providing training, employment and activities for adults with 
developmental disabilities;
(10) the cystic fibrosis foundation, heart of America chapter, for 
the purposes of assuring the development of the means to cure and 
control cystic fibrosis and improving the quality of life for those with 
the disease;
(11) the spina bifida association of Kansas for the purpose of 
providing financial, educational and practical aid to families and 
individuals with spina bifida. Such aid includes, but is not limited to, 
funding for medical devices, counseling and medical educational 
opportunities;
(12) the CHWC, Inc., for the purpose of rebuilding urban core 
neighborhoods through the construction of new homes, acquiring and 
renovating existing homes and other related activities, and promoting 
economic development in such neighborhoods;
(13) the cross-lines cooperative council for the purpose of 
providing social services to low income individuals and families;
(14) the dreams work, inc., for the purpose of providing young 
adult day services to individuals with developmental disabilities and 
assisting families in avoiding institutional or nursing home care for a 
developmentally disabled member of their family;
(15) the KSDS, Inc., for the purpose of promoting the 
independence and inclusion of people with disabilities as fully 
participating and contributing members of their communities and 
society through the training and providing of guide and service dogs to 
people with disabilities, and providing disability education and 
awareness to the general public;
(16) the lyme association of greater Kansas City, Inc., for the 
purpose of providing support to persons with lyme disease and public 
education relating to the prevention, treatment and cure of lyme 
disease;
(17) the dream factory, inc., for the purpose of granting the dreams 
of children with critical and chronic illnesses;
(18) the Ottawa Suzuki strings, inc., for the purpose of providing  SENATE BILL No. 98—page 20
students and families with education and resources necessary to enable 
each child to develop fine character and musical ability to the fullest 
potential;
(19) the international association of lions clubs for the purpose of 
creating and fostering a spirit of understanding among all people for 
humanitarian needs by providing voluntary services through 
community involvement and international cooperation;
(20) the Johnson county young matrons, inc., for the purpose of 
promoting a positive future for members of the community through 
volunteerism, financial support and education through the efforts of an 
all volunteer organization;
(21) the American cancer society, inc., for the purpose of 
eliminating cancer as a major health problem by preventing cancer, 
saving lives and diminishing suffering from cancer, through research, 
education, advocacy and service;
(22) the community services of Shawnee, inc., for the purpose of 
providing food and clothing to those in need;
(23) the angel babies association, for the purpose of providing 
assistance, support and items of necessity to teenage mothers and their 
babies; and
(24) the Kansas fairgrounds foundation for the purpose of the 
preservation, renovation and beautification of the Kansas state 
fairgrounds;
(ww) all sales of tangible personal property purchased by the 
habitat for humanity for the exclusive use of being incorporated within 
a housing project constructed by such organization;
(xx) all sales of tangible personal property and services purchased 
by a nonprofit zoo that is exempt from federal income taxation pursuant 
to section 501(c)(3) of the federal internal revenue code of 1986, or on 
behalf of such zoo by an entity itself exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue 
code of 1986 contracted with to operate such zoo and all sales of 
tangible personal property or services purchased by a contractor for the 
purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for any 
nonprofit zoo that would be exempt from taxation under the provisions 
of this section if purchased directly by such nonprofit zoo or the entity 
operating such zoo. Nothing in this subsection shall be deemed to 
exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for any 
nonprofit zoo. When any nonprofit zoo shall contract for the purpose of 
constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities, it shall obtain from the 
state and furnish to the contractor an exemption certificate for the 
project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificate to all suppliers from whom such purchases are made, 
and such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the 
contractor shall furnish to the nonprofit zoo concerned a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years 
and shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or  SENATE BILL No. 98—page 21
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, the 
nonprofit zoo concerned shall be liable for tax on all materials 
purchased for the project, and upon payment thereof it may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof, who shall 
use or otherwise dispose of any materials purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto;
(yy) all sales of tangible personal property and services purchased 
by a parent-teacher association or organization, and all sales of tangible 
personal property by or on behalf of such association or organization;
(zz) all sales of machinery and equipment purchased by over-the-
air, free access radio or television station that is used directly and 
primarily for the purpose of producing a broadcast signal or is such that 
the failure of the machinery or equipment to operate would cause 
broadcasting to cease. For purposes of this subsection, machinery and 
equipment shall include, but not be limited to, that required by rules 
and regulations of the federal communications commission, and all 
sales of electricity which are essential or necessary for the purpose of 
producing a broadcast signal or is such that the failure of the electricity 
would cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased 
by a religious organization that is exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code, and 
used exclusively for religious purposes, and all sales of tangible 
personal property or services purchased by a contractor for the purpose 
of constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for any such organization 
that would be exempt from taxation under the provisions of this section 
if purchased directly by such organization. Nothing in this subsection 
shall be deemed to exempt the purchase of any construction machinery, 
equipment or tools used in the constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
any such organization. When any such organization shall contract for 
the purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities, it shall obtain 
from the state and furnish to the contractor an exemption certificate for 
the project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificate to all suppliers from whom such purchases are made, 
and such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the 
contractor shall furnish to such organization concerned a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years 
and shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or 
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of  SENATE BILL No. 98—page 22
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, such 
organization concerned shall be liable for tax on all materials purchased 
for the project, and upon payment thereof it may recover the same from 
the contractor together with reasonable attorney fees. Any contractor or 
any agent, employee or subcontractor thereof, who shall use or 
otherwise dispose of any materials purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and 
after July 1, 1998, but prior to the effective date of this act upon the 
gross receipts received from any sale exempted by the amendatory 
provisions of this subsection shall be refunded. Each claim for a sales 
tax refund shall be verified and submitted to the director of taxation 
upon forms furnished by the director and shall be accompanied by any 
additional documentation required by the director. The director shall 
review each claim and shall refund that amount of sales tax paid as 
determined under the provisions of this subsection. All refunds shall be 
paid from the sales tax refund fund upon warrants of the director of 
accounts and reports pursuant to vouchers approved by the director or 
the director's designee;
(bbb) all sales of food for human consumption by an organization 
that is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, pursuant to a food 
distribution program that offers such food at a price below cost in 
exchange for the performance of community service by the purchaser 
thereof;
(ccc) on and after July 1, 1999, all sales of tangible personal 
property and services purchased by a primary care clinic or health 
center the primary purpose of which is to provide services to medically 
underserved individuals and families, and that is exempt from federal 
income taxation pursuant to section 501(c)(3) of the federal internal 
revenue code, and all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities for any such clinic or center that would be exempt 
from taxation under the provisions of this section if purchased directly 
by such clinic or center, except that for taxable years commencing after 
December 31, 2013, this subsection shall not apply to any sales of such 
tangible personal property and services purchased by a primary care 
clinic or health center which performs any abortion, as defined in 
K.S.A. 65-6701, and amendments thereto. Nothing in this subsection 
shall be deemed to exempt the purchase of any construction machinery, 
equipment or tools used in the constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
any such clinic or center. When any such clinic or center shall contract 
for the purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities, it shall obtain 
from the state and furnish to the contractor an exemption certificate for 
the project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificate to all suppliers from whom such purchases are made, 
and such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the 
contractor shall furnish to such clinic or center concerned a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection.  SENATE BILL No. 98—page 23
All invoices shall be held by the contractor for a period of five years 
and shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or 
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, such 
clinic or center concerned shall be liable for tax on all materials 
purchased for the project, and upon payment thereof it may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof, who shall 
use or otherwise dispose of any materials purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto;
(ddd) on and after January 1, 1999, and before January 1, 2000, all 
sales of materials and services purchased by any class II or III railroad 
as classified by the federal surface transportation board for the 
construction, renovation, repair or replacement of class II or III railroad 
track and facilities used directly in interstate commerce. In the event 
any such track or facility for which materials and services were 
purchased sales tax exempt is not operational for five years succeeding 
the allowance of such exemption, the total amount of sales tax that 
would have been payable except for the operation of this subsection 
shall be recouped in accordance with rules and regulations adopted for 
such purpose by the secretary of revenue;
(eee) on and after January 1, 1999, and before January 1, 2001, all 
sales of materials and services purchased for the original construction, 
reconstruction, repair or replacement of grain storage facilities, 
including railroad sidings providing access thereto;
(fff) all sales of material handling equipment, racking systems and 
other related machinery and equipment that is used for the handling, 
movement or storage of tangible personal property in a warehouse or 
distribution facility in this state; all sales of installation, repair and 
maintenance services performed on such machinery and equipment; 
and all sales of repair and replacement parts for such machinery and 
equipment. For purposes of this subsection, a warehouse or distribution 
facility means a single, fixed location that consists of buildings or 
structures in a contiguous area where storage or distribution operations 
are conducted that are separate and apart from the business' retail 
operations, if any, and that do not otherwise qualify for exemption as 
occurring at a manufacturing or processing plant or facility. Material 
handling and storage equipment shall include aeration, dust control, 
cleaning, handling and other such equipment that is used in a public 
grain warehouse or other commercial grain storage facility, whether 
used for grain handling, grain storage, grain refining or processing, or 
other grain treatment operation;
(ggg) all sales of tangible personal property and services 
purchased by or on behalf of the Kansas academy of science, which is 
exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code of 1986, and used solely by such 
academy for the preparation, publication and dissemination of 
education materials;
(hhh) all sales of tangible personal property and services  SENATE BILL No. 98—page 24
purchased by or on behalf of all domestic violence shelters that are 
member agencies of the Kansas coalition against sexual and domestic 
violence;
(iii) all sales of personal property and services purchased by an 
organization that is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, and such 
personal property and services are used by any such organization in the 
collection, storage and distribution of food products to nonprofit 
organizations that distribute such food products to persons pursuant to a 
food distribution program on a charitable basis without fee or charge, 
and all sales of tangible personal property or services purchased by a 
contractor for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities 
used for the collection and storage of such food products for any such 
organization which is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, that 
would be exempt from taxation under the provisions of this section if 
purchased directly by such organization. Nothing in this subsection 
shall be deemed to exempt the purchase of any construction machinery, 
equipment or tools used in the constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
any such organization. When any such organization shall contract for 
the purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities, it shall obtain 
from the state and furnish to the contractor an exemption certificate for 
the project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificate to all suppliers from whom such purchases are made, 
and such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the 
contractor shall furnish to such organization concerned a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years 
and shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been 
incorporated in such facilities or not to have been returned for credit or 
the sales or compensating tax otherwise imposed upon such materials 
that will not be so incorporated in such facilities reported and paid by 
such contractor to the director of taxation not later than the 20
th
 day of 
the month following the close of the month in which it shall be 
determined that such materials will not be used for the purpose for 
which such certificate was issued, such organization concerned shall be 
liable for tax on all materials purchased for the project, and upon 
payment thereof it may recover the same from the contractor together 
with reasonable attorney fees. Any contractor or any agent, employee 
or subcontractor thereof, who shall use or otherwise dispose of any 
materials purchased under such a certificate for any purpose other than 
that for which such a certificate is issued without the payment of the 
sales or compensating tax otherwise imposed upon such materials, shall 
be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto. Sales tax paid on and after July 1, 2005, but prior 
to the effective date of this act upon the gross receipts received from 
any sale exempted by the amendatory provisions of this subsection 
shall be refunded. Each claim for a sales tax refund shall be verified 
and submitted to the director of taxation upon forms furnished by the 
director and shall be accompanied by any additional documentation 
required by the director. The director shall review each claim and shall  SENATE BILL No. 98—page 25
refund that amount of sales tax paid as determined under the provisions 
of this subsection. All refunds shall be paid from the sales tax refund 
fund upon warrants of the director of accounts and reports pursuant to 
vouchers approved by the director or the director's designee;
(jjj) all sales of dietary supplements dispensed pursuant to a 
prescription order by a licensed practitioner or a mid-level practitioner 
as defined by K.S.A. 65-1626, and amendments thereto. As used in this 
subsection, "dietary supplement" means any product, other than 
tobacco, intended to supplement the diet that: (1) Contains one or more 
of the following dietary ingredients: A vitamin, a mineral, an herb or 
other botanical, an amino acid, a dietary substance for use by humans 
to supplement the diet by increasing the total dietary intake or a 
concentrate, metabolite, constituent, extract or combination of any such 
ingredient; (2) is intended for ingestion in tablet, capsule, powder, 
softgel, gelcap or liquid form, or if not intended for ingestion, in such a 
form, is not represented as conventional food and is not represented for 
use as a sole item of a meal or of the diet; and (3) is required to be 
labeled as a dietary supplement, identifiable by the supplemental facts 
box found on the label and as required pursuant to 21 C.F.R. § 101.36;
(lll) all sales of tangible personal property and services purchased 
by special olympics Kansas, inc. for the purpose of providing year-
round sports training and athletic competition in a variety of olympic-
type sports for individuals with intellectual disabilities by giving them 
continuing opportunities to develop physical fitness, demonstrate 
courage, experience joy and participate in a sharing of gifts, skills and 
friendship with their families, other special olympics athletes and the 
community, and activities provided or sponsored by such organization, 
and all sales of tangible personal property by or on behalf of any such 
organization;
(mmm) all sales of tangible personal property purchased by or on 
behalf of the Marillac center, inc., which is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue 
code, for the purpose of providing psycho-social-biological and special 
education services to children, and all sales of any such property by or 
on behalf of such organization for such purpose;
(nnn) all sales of tangible personal property and services 
purchased by the west Sedgwick county-sunrise rotary club and sunrise 
charitable fund for the purpose of constructing a boundless playground 
which is an integrated, barrier free and developmentally advantageous 
play environment for children of all abilities and disabilities;
(ooo) all sales of tangible personal property by or on behalf of a 
public library serving the general public and supported in whole or in 
part with tax money or a not-for-profit organization whose purpose is to 
raise funds for or provide services or other benefits to any such public 
library;
(ppp) all sales of tangible personal property and services 
purchased by or on behalf of a homeless shelter that is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
income tax code of 1986, and used by any such homeless shelter to 
provide emergency and transitional housing for individuals and 
families experiencing homelessness, and all sales of any such property 
by or on behalf of any such homeless shelter for any such purpose;
(qqq) all sales of tangible personal property and services 
purchased by TLC for children and families, inc., hereinafter referred to 
as TLC, which is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, and such 
property and services are used for the purpose of providing emergency 
shelter and treatment for abused and neglected children as well as 
meeting additional critical needs for children, juveniles and family, and  SENATE BILL No. 98—page 26
all sales of any such property by or on behalf of TLC for any such 
purpose; and all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for the 
operation of services for TLC for any such purpose that would be 
exempt from taxation under the provisions of this section if purchased 
directly by TLC. Nothing in this subsection shall be deemed to exempt 
the purchase of any construction machinery, equipment or tools used in 
the constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities for TLC. When TLC contracts for the 
purpose of constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities, it shall obtain from the state and furnish to 
the contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. 
The contractor shall furnish the number of such certificate to all 
suppliers from whom such purchases are made, and such suppliers shall 
execute invoices covering the same bearing the number of such 
certificate. Upon completion of the project the contractor shall furnish 
to TLC a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under 
this subsection. All invoices shall be held by the contractor for a period 
of five years and shall be subject to audit by the director of taxation. If 
any materials purchased under such a certificate are found not to have 
been incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or 
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, TLC 
shall be liable for tax on all materials purchased for the project, and 
upon payment thereof it may recover the same from the contractor 
together with reasonable attorney fees. Any contractor or any agent, 
employee or subcontractor thereof, who shall use or otherwise dispose 
of any materials purchased under such a certificate for any purpose 
other than that for which such a certificate is issued without the 
payment of the sales or compensating tax otherwise imposed upon such 
materials, shall be guilty of a misdemeanor and, upon conviction 
therefor, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto;
(rrr) all sales of tangible personal property and services purchased 
by any county law library maintained pursuant to law and sales of 
tangible personal property and services purchased by an organization 
that would have been exempt from taxation under the provisions of this 
subsection if purchased directly by the county law library for the 
purpose of providing legal resources to attorneys, judges, students and 
the general public, and all sales of any such property by or on behalf of 
any such county law library;
(sss) all sales of tangible personal property and services purchased 
by catholic charities or youthville, hereinafter referred to as charitable 
family providers, which is exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code of 
1986, and which such property and services are used for the purpose of 
providing emergency shelter and treatment for abused and neglected 
children as well as meeting additional critical needs for children, 
juveniles and family, and all sales of any such property by or on behalf 
of charitable family providers for any such purpose; and all sales of 
tangible personal property or services purchased by a contractor for the 
purpose of constructing, maintaining, repairing, enlarging, furnishing or  SENATE BILL No. 98—page 27
remodeling facilities for the operation of services for charitable family 
providers for any such purpose which would be exempt from taxation 
under the provisions of this section if purchased directly by charitable 
family providers. Nothing in this subsection shall be deemed to exempt 
the purchase of any construction machinery, equipment or tools used in 
the constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities for charitable family providers. When 
charitable family providers contracts for the purpose of constructing, 
maintaining, repairing, enlarging, furnishing or remodeling such 
facilities, it shall obtain from the state and furnish to the contractor an 
exemption certificate for the project involved, and the contractor may 
purchase materials for incorporation in such project. The contractor 
shall furnish the number of such certificate to all suppliers from whom 
such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to charitable 
family providers a sworn statement, on a form to be provided by the 
director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. If any materials purchased under such a certificate 
are found not to have been incorporated in the building or other project 
or not to have been returned for credit or the sales or compensating tax 
otherwise imposed upon such materials that will not be so incorporated 
in the building or other project reported and paid by such contractor to 
the director of taxation not later than the 20
th
 day of the month 
following the close of the month in which it shall be determined that 
such materials will not be used for the purpose for which such 
certificate was issued, charitable family providers shall be liable for tax 
on all materials purchased for the project, and upon payment thereof it 
may recover the same from the contractor together with reasonable 
attorney fees. Any contractor or any agent, employee or subcontractor 
thereof, who shall use or otherwise dispose of any materials purchased 
under such a certificate for any purpose other than that for which such a 
certificate is issued without the payment of the sales or compensating 
tax otherwise imposed upon such materials, shall be guilty of a 
misdemeanor and, upon conviction therefor, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ttt) all sales of tangible personal property or services purchased 
by a contractor for a project for the purpose of restoring, constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing 
or remodeling a home or facility owned by a nonprofit museum that has 
been granted an exemption pursuant to subsection (qq), which such 
home or facility is located in a city that has been designated as a 
qualified hometown pursuant to the provisions of K.S.A. 75-5071 et 
seq., and amendments thereto, and which such project is related to the 
purposes of K.S.A. 75-5071 et seq., and amendments thereto, and that 
would be exempt from taxation under the provisions of this section if 
purchased directly by such nonprofit museum. Nothing in this 
subsection shall be deemed to exempt the purchase of any construction 
machinery, equipment or tools used in the restoring, constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing 
or remodeling a home or facility for any such nonprofit museum. When 
any such nonprofit museum shall contract for the purpose of restoring, 
constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling a home or facility, it shall obtain 
from the state and furnish to the contractor an exemption certificate for 
the project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number  SENATE BILL No. 98—page 28
of such certificates to all suppliers from whom such purchases are 
made, and such suppliers shall execute invoices covering the same 
bearing the number of such certificate. Upon completion of the project, 
the contractor shall furnish to such nonprofit museum a sworn 
statement on a form to be provided by the director of taxation that all 
purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years 
and shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in a home or 
facility or other project reported and paid by such contractor to the 
director of taxation not later than the 20
th
 day of the month following 
the close of the month in which it shall be determined that such 
materials will not be used for the purpose for which such certificate 
was issued, such nonprofit museum shall be liable for tax on all 
materials purchased for the project, and upon payment thereof it may 
recover the same from the contractor together with reasonable attorney 
fees. Any contractor or any agent, employee or subcontractor thereof, 
who shall use or otherwise dispose of any materials purchased under 
such a certificate for any purpose other than that for which such a 
certificate is issued without the payment of the sales or compensating 
tax otherwise imposed upon such materials, shall be guilty of a 
misdemeanor and, upon conviction therefor, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(uuu) all sales of tangible personal property and services 
purchased by Kansas children's service league, hereinafter referred to 
as KCSL, which is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, and 
which such property and services are used for the purpose of providing 
for the prevention and treatment of child abuse and maltreatment as 
well as meeting additional critical needs for children, juveniles and 
family, and all sales of any such property by or on behalf of KCSL for 
any such purpose; and all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for the 
operation of services for KCSL for any such purpose that would be 
exempt from taxation under the provisions of this section if purchased 
directly by KCSL. Nothing in this subsection shall be deemed to 
exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, maintaining, repairing, enlarging, furnishing 
or remodeling such facilities for KCSL. When KCSL contracts for the 
purpose of constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities, it shall obtain from the state and furnish to 
the contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. 
The contractor shall furnish the number of such certificate to all 
suppliers from whom such purchases are made, and such suppliers shall 
execute invoices covering the same bearing the number of such 
certificate. Upon completion of the project the contractor shall furnish 
to KCSL a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under 
this subsection. All invoices shall be held by the contractor for a period 
of five years and shall be subject to audit by the director of taxation. If 
any materials purchased under such a certificate are found not to have 
been incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or  SENATE BILL No. 98—page 29
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, KCSL 
shall be liable for tax on all materials purchased for the project, and 
upon payment thereof it may recover the same from the contractor 
together with reasonable attorney fees. Any contractor or any agent, 
employee or subcontractor thereof, who shall use or otherwise dispose 
of any materials purchased under such a certificate for any purpose 
other than that for which such a certificate is issued without the 
payment of the sales or compensating tax otherwise imposed upon such 
materials, shall be guilty of a misdemeanor and, upon conviction 
therefor, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto;
(vvv) all sales of tangible personal property or services, including 
the renting and leasing of tangible personal property or services, 
purchased by jazz in the woods, inc., a Kansas corporation that is 
exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code, for the purpose of providing jazz in 
the woods, an event benefiting children-in-need and other nonprofit 
charities assisting such children, and all sales of any such property by 
or on behalf of such organization for such purpose;
(www) all sales of tangible personal property purchased by or on 
behalf of the Frontenac education foundation, which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code, for the purpose of providing education support 
for students, and all sales of any such property by or on behalf of such 
organization for such purpose;
(xxx) all sales of personal property and services purchased by the 
booth theatre foundation, inc., an organization, which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, and which such personal property and 
services are used by any such organization in the constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing 
or remodeling of the booth theatre, and all sales of tangible personal 
property or services purchased by a contractor for the purpose of 
constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling the booth theatre for such 
organization, that would be exempt from taxation under the provisions 
of this section if purchased directly by such organization. Nothing in 
this subsection shall be deemed to exempt the purchase of any 
construction machinery, equipment or tools used in the constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing 
or remodeling facilities for any such organization. When any such 
organization shall contract for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities, it shall obtain from the state and furnish to the 
contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. 
The contractor shall furnish the number of such certificate to all 
suppliers from whom such purchases are made, and such suppliers shall 
execute invoices covering the same bearing the number of such 
certificate. Upon completion of the project the contractor shall furnish 
to such organization concerned a sworn statement, on a form to be 
provided by the director of taxation, that all purchases so made were 
entitled to exemption under this subsection. All invoices shall be held 
by the contractor for a period of five years and shall be subject to audit 
by the director of taxation. If any materials purchased under such a 
certificate are found not to have been incorporated in such facilities or  SENATE BILL No. 98—page 30
not to have been returned for credit or the sales or compensating tax 
otherwise imposed upon such materials that will not be so incorporated 
in such facilities reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, such 
organization concerned shall be liable for tax on all materials purchased 
for the project, and upon payment thereof it may recover the same from 
the contractor together with reasonable attorney fees. Any contractor or 
any agent, employee or subcontractor thereof, who shall use or 
otherwise dispose of any materials purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and 
after January 1, 2007, but prior to the effective date of this act upon the 
gross receipts received from any sale which would have been exempted 
by the provisions of this subsection had such sale occurred after the 
effective date of this act shall be refunded. Each claim for a sales tax 
refund shall be verified and submitted to the director of taxation upon 
forms furnished by the director and shall be accompanied by any 
additional documentation required by the director. The director shall 
review each claim and shall refund that amount of sales tax paid as 
determined under the provisions of this subsection. All refunds shall be 
paid from the sales tax refund fund upon warrants of the director of 
accounts and reports pursuant to vouchers approved by the director or 
the director's designee;
(yyy) all sales of tangible personal property and services 
purchased by TLC charities foundation, inc., hereinafter referred to as 
TLC charities, which is exempt from federal income taxation pursuant 
to section 501(c)(3) of the federal internal revenue code of 1986, and 
which such property and services are used for the purpose of 
encouraging private philanthropy to further the vision, values, and 
goals of TLC for children and families, inc.; and all sales of such 
property and services by or on behalf of TLC charities for any such 
purpose and all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for the 
operation of services for TLC charities for any such purpose that would 
be exempt from taxation under the provisions of this section if 
purchased directly by TLC charities. Nothing in this subsection shall be 
deemed to exempt the purchase of any construction machinery, 
equipment or tools used in the constructing, maintaining, repairing, 
enlarging, furnishing or remodeling such facilities for TLC charities. 
When TLC charities contracts for the purpose of constructing, 
maintaining, repairing, enlarging, furnishing or remodeling such 
facilities, it shall obtain from the state and furnish to the contractor an 
exemption certificate for the project involved, and the contractor may 
purchase materials for incorporation in such project. The contractor 
shall furnish the number of such certificate to all suppliers from whom 
such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to TLC charities a 
sworn statement, on a form to be provided by the director of taxation, 
that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of 
five years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been  SENATE BILL No. 98—page 31
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be incorporated into the building or 
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, TLC 
charities shall be liable for tax on all materials purchased for the 
project, and upon payment thereof it may recover the same from the 
contractor together with reasonable attorney fees. Any contractor or any 
agent, employee or subcontractor thereof, who shall use or otherwise 
dispose of any materials purchased under such a certificate for any 
purpose other than that for which such a certificate is issued without the 
payment of the sales or compensating tax otherwise imposed upon such 
materials, shall be guilty of a misdemeanor and, upon conviction 
therefor, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto;
(zzz) all sales of tangible personal property purchased by the 
rotary club of shawnee foundation, which is exempt from federal 
income taxation pursuant to section 501(c)(3) of the federal internal 
revenue code of 1986, as amended, used for the purpose of providing 
contributions to community service organizations and scholarships;
(aaaa) all sales of personal property and services purchased by or 
on behalf of victory in the valley, inc., which is exempt from federal 
income taxation pursuant to section 501(c)(3) of the federal internal 
revenue code, for the purpose of providing a cancer support group and 
services for persons with cancer, and all sales of any such property by 
or on behalf of any such organization for any such purpose;
(bbbb) all sales of entry or participation fees, charges or tickets by 
Guadalupe health foundation, which is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue 
code, for such organization's annual fundraising event which purpose is 
to provide health care services for uninsured workers;
(cccc) all sales of tangible personal property or services purchased 
by or on behalf of wayside waifs, inc., which is exempt from federal 
income taxation pursuant to section 501(c)(3) of the federal internal 
revenue code, for the purpose of providing such organization's annual 
fundraiser, an event whose purpose is to support the care of homeless 
and abandoned animals, animal adoption efforts, education programs 
for children and efforts to reduce animal over-population and animal 
welfare services, and all sales of any such property, including entry or 
participation fees or charges, by or on behalf of such organization for 
such purpose;
(dddd) all sales of tangible personal property or services 
purchased by or on behalf of goodwill industries or Easter seals of 
Kansas, inc., both of which are exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code, for 
the purpose of providing education, training and employment 
opportunities for people with disabilities and other barriers to 
employment;
(eeee) all sales of tangible personal property or services purchased 
by or on behalf of all American beef battalion, inc., which is exempt 
from federal income taxation pursuant to section 501(c)(3) of the 
federal internal revenue code, for the purpose of educating, promoting 
and participating as a contact group through the beef cattle industry in 
order to carry out such projects that provide support and morale to 
members of the United States armed forces and military services;
(ffff) all sales of tangible personal property and services purchased 
by sheltered living, inc., which is exempt from federal income taxation  SENATE BILL No. 98—page 32
pursuant to section 501(c)(3) of the federal internal revenue code of 
1986, and which such property and services are used for the purpose of 
providing residential and day services for people with developmental 
disabilities or intellectual disability, or both, and all sales of any such 
property by or on behalf of sheltered living, inc., for any such purpose; 
and all sales of tangible personal property or services purchased by a 
contractor for the purpose of rehabilitating, constructing, maintaining, 
repairing, enlarging, furnishing or remodeling homes and facilities for 
sheltered living, inc., for any such purpose that would be exempt from 
taxation under the provisions of this section if purchased directly by 
sheltered living, inc. Nothing in this subsection shall be deemed to 
exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, maintaining, repairing, enlarging, furnishing 
or remodeling such homes and facilities for sheltered living, inc. When 
sheltered living, inc., contracts for the purpose of rehabilitating, 
constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such homes and facilities, it shall obtain from the state and 
furnish to the contractor an exemption certificate for the project 
involved, and the contractor may purchase materials for incorporation 
in such project. The contractor shall furnish the number of such 
certificate to all suppliers from whom such purchases are made, and 
such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the 
contractor shall furnish to sheltered living, inc., a sworn statement, on a 
form to be provided by the director of taxation, that all purchases so 
made were entitled to exemption under this subsection. All invoices 
shall be held by the contractor for a period of five years and shall be 
subject to audit by the director of taxation. If any materials purchased 
under such a certificate are found not to have been incorporated in the 
building or other project or not to have been returned for credit or the 
sales or compensating tax otherwise imposed upon such materials that 
will not be so incorporated in the building or other project reported and 
paid by such contractor to the director of taxation not later than the 20
th 
day of the month following the close of the month in which it shall be 
determined that such materials will not be used for the purpose for 
which such certificate was issued, sheltered living, inc., shall be liable 
for tax on all materials purchased for the project, and upon payment 
thereof it may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any 
materials purchased under such a certificate for any purpose other than 
that for which such a certificate is issued without the payment of the 
sales or compensating tax otherwise imposed upon such materials, shall 
be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto;
(gggg) all sales of game birds for which the primary purpose is 
use in hunting;
(hhhh) all sales of tangible personal property or services 
purchased on or after July 1, 2014, for the purpose of and in 
conjunction with constructing, reconstructing, enlarging or remodeling 
a business identified under the North American industry classification 
system (NAICS) subsectors 1123, 1124, 112112, 112120 or 112210, 
and the sale and installation of machinery and equipment purchased for 
installation at any such business. The exemption provided in this 
subsection shall not apply to projects that have actual total costs less 
than $50,000. When a person contracts for the construction, 
reconstruction, enlargement or remodeling of any such business, such 
person shall obtain from the state and furnish to the contractor an  SENATE BILL No. 98—page 33
exemption certificate for the project involved, and the contractor may 
purchase materials, machinery and equipment for incorporation in such 
project. The contractor shall furnish the number of such certificates to 
all suppliers from whom such purchases are made, and such suppliers 
shall execute invoices covering the same bearing the number of such 
certificate. Upon completion of the project, the contractor shall furnish 
to the owner of the business a sworn statement, on a form to be 
provided by the director of taxation, that all purchases so made were 
entitled to exemption under this subsection. All invoices shall be held 
by the contractor for a period of five years and shall be subject to audit 
by the director of taxation. Any contractor or any agent, employee or 
subcontractor of the contractor, who shall use or otherwise dispose of 
any materials, machinery or equipment purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed thereon, shall be guilty of a misdemeanor and, upon 
conviction therefor, shall be subject to the penalties provided for in 
K.S.A. 79-3615(h), and amendments thereto;
(iiii) all sales of tangible personal property or services purchased 
by a contractor for the purpose of constructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for the operation of 
services for Wichita children's home for any such purpose that would 
be exempt from taxation under the provisions of this section if 
purchased directly by Wichita children's home. Nothing in this 
subsection shall be deemed to exempt the purchase of any construction 
machinery, equipment or tools used in the constructing, maintaining, 
repairing, enlarging, furnishing or remodeling such facilities for 
Wichita children's home. When Wichita children's home contracts for 
the purpose of constructing, maintaining, repairing, enlarging, 
furnishing or remodeling such facilities, it shall obtain from the state 
and furnish to the contractor an exemption certificate for the project 
involved, and the contractor may purchase materials for incorporation 
in such project. The contractor shall furnish the number of such 
certificate to all suppliers from whom such purchases are made, and 
such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project, the 
contractor shall furnish to Wichita children's home a sworn statement, 
on a form to be provided by the director of taxation, that all purchases 
so made were entitled to exemption under this subsection. All invoices 
shall be held by the contractor for a period of five years and shall be 
subject to audit by the director of taxation. If any materials purchased 
under such a certificate are found not to have been incorporated in the 
building or other project or not to have been returned for credit or the 
sales or compensating tax otherwise imposed upon such materials that 
will not be so incorporated in the building or other project reported and 
paid by such contractor to the director of taxation not later than the 20
th 
day of the month following the close of the month in which it shall be 
determined that such materials will not be used for the purpose for 
which such certificate was issued, Wichita children's home shall be 
liable for the tax on all materials purchased for the project, and upon 
payment, it may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor, who shall use or otherwise dispose of any materials 
purchased under such a certificate for any purpose other than that for 
which such a certificate is issued without the payment of the sales or 
compensating tax otherwise imposed upon such materials, shall be 
guilty of a misdemeanor and, upon conviction, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(jjjj) all sales of tangible personal property or services purchased  SENATE BILL No. 98—page 34
by or on behalf of the beacon, inc., that is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue 
code, for the purpose of providing those desiring help with food, 
shelter, clothing and other necessities of life during times of special 
need;
(kkkk) all sales of tangible personal property and services 
purchased by or on behalf of reaching out from within, inc., which is 
exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code, for the purpose of sponsoring self-
help programs for incarcerated persons that will enable such 
incarcerated persons to become role models for non-violence while in 
correctional facilities and productive family members and citizens upon 
return to the community;
(llll) all sales of tangible personal property and services purchased 
by Gove county healthcare endowment foundation, inc., which is 
exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code of 1986, and which such property and 
services are used for the purpose of constructing and equipping an 
airport in Quinter, Kansas, and all sales of tangible personal property or 
services purchased by a contractor for the purpose of constructing and 
equipping an airport in Quinter, Kansas, for such organization, that 
would be exempt from taxation under the provisions of this section if 
purchased directly by such organization. Nothing in this subsection 
shall be deemed to exempt the purchase of any construction machinery, 
equipment or tools used in the constructing or equipping of facilities for 
such organization. When such organization shall contract for the 
purpose of constructing or equipping an airport in Quinter, Kansas, it 
shall obtain from the state and furnish to the contractor an exemption 
certificate for the project involved, and the contractor may purchase 
materials for incorporation in such project. The contractor shall furnish 
the number of such certificate to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering 
the same bearing the number of such certificate. Upon completion of 
the project, the contractor shall furnish to such organization concerned 
a sworn statement, on a form to be provided by the director of taxation, 
that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of 
five years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in such facilities or not to have been returned for credit or 
the sales or compensating tax otherwise imposed upon such materials 
that will not be so incorporated in such facilities reported and paid by 
such contractor to the director of taxation no later than the 20
th 
day of 
the month following the close of the month in which it shall be 
determined that such materials will not be used for the purpose for 
which such certificate was issued, such organization concerned shall be 
liable for tax on all materials purchased for the project, and upon 
payment thereof it may recover the same from the contractor together 
with reasonable attorney fees. Any contractor or any agent, employee 
or subcontractor thereof, who purchased under such a certificate for 
any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto. The provisions of this 
subsection shall expire and have no effect on and after July 1, 2019;
(mmmm) all sales of gold or silver coins; and palladium, 
platinum, gold or silver bullion. For the purposes of this subsection, 
"bullion" means bars, ingots or commemorative medallions of gold,  SENATE BILL No. 98—page 35
silver, platinum, palladium, or a combination thereof, for which the 
value of the metal depends on its content and not the form;
(nnnn) all sales of tangible personal property or services 
purchased by friends of hospice of Jefferson county, an organization 
that is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, for the purpose of 
providing support to the Jefferson county hospice agency in end-of-life 
care of Jefferson county families, friends and neighbors, and all sales of 
entry or participation fees, charges or tickets by friends of hospice of 
Jefferson county for such organization's fundraising event for such 
purpose;
(oooo) all sales of tangible personal property or services 
purchased for the purpose of and in conjunction with constructing, 
reconstructing, enlarging or remodeling a qualified business facility by 
a qualified firm or qualified supplier that meets the requirements 
established in K.S.A. 2024 Supp. 74-50,312 and 74-50,319, and 
amendments thereto, and that has been approved for a project 
exemption certificate by the secretary of commerce, and the sale and 
installation of machinery and equipment purchased by such qualified 
firm or qualified supplier for installation at any such qualified business 
facility. When a person shall contract for the construction, 
reconstruction, enlargement or remodeling of any such qualified 
business facility, such person shall obtain from the state and furnish to 
the contractor an exemption certificate for the project involved, and the 
contractor may purchase materials, machinery and equipment for 
incorporation in such project. The contractor shall furnish the number 
of such certificates to all suppliers from whom such purchases are 
made, and such suppliers shall execute invoices covering the same 
bearing the number of such certificate. Upon completion of the project, 
the contractor shall furnish to the owner of the qualified firm or 
qualified supplier a sworn statement, on a form to be provided by the 
director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. Any contractor or any agent, employee or 
subcontractor thereof who shall use or otherwise dispose of any 
materials, machinery or equipment purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed thereon, shall be guilty of a misdemeanor and, upon 
conviction therefor, shall be subject to the penalties provided for in 
K.S.A. 79-3615(h), and amendments thereto. As used in this 
subsection, "qualified business facility," "qualified firm" and "qualified 
supplier" mean the same as defined in K.S.A. 2024 Supp. 74-50,311, 
and amendments thereto;
(pppp) (1) all sales of tangible personal property or services 
purchased by a not-for-profit corporation that is designated as an area 
agency on aging by the secretary for aging and disabilities services and 
is exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code for the purpose of coordinating and 
providing seniors and those living with disabilities with services that 
promote person-centered care, including home-delivered meals, 
congregate meal settings, long-term case management, transportation, 
information, assistance and other preventative and intervention services 
to help service recipients remain in their homes and communities or for 
the purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for such area 
agency on aging; and
(2) all sales of tangible personal property or services purchased by  SENATE BILL No. 98—page 36
a contractor for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
an area agency on aging that would be exempt from taxation under the 
provisions of this section if purchased directly by such area agency on 
aging. Nothing in this paragraph shall be deemed to exempt the 
purchase of any construction machinery, equipment or tools used in the 
constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for an area agency on 
aging. When an area agency on aging contracts for the purpose of 
constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities, it shall obtain from the 
state and furnish to the contractor an exemption certificate for the 
project involved, and such contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number 
of such certificate to all suppliers from whom such purchases are made, 
and such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project, the 
contractor shall furnish to such area agency on aging a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years 
and shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been 
returned for credit or the sales or compensating tax otherwise imposed 
upon such materials that will not be so incorporated in the building or 
other project reported and paid by such contractor to the director of 
taxation not later than the 20
th
 day of the month following the close of 
the month in which it shall be determined that such materials will not 
be used for the purpose for which such certificate was issued, the area 
agency on aging concerned shall be liable for tax on all materials 
purchased for the project, and upon payment thereof, the area agency 
on aging may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor thereof who shall use or otherwise dispose of any 
materials purchased under such a certificate for any purpose other than 
that for which such a certificate is issued without the payment of the 
sales or compensating tax otherwise imposed upon such materials shall 
be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto;
(qqqq) all sales of tangible personal property or services 
purchased by Kansas suicide prevention HQ, inc., an organization that 
is exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code of 1986, for the purpose of bringing 
suicide prevention training and awareness to communities across the 
state;
(rrrr) all sales of the services of slaughtering, butchering, custom 
cutting, dressing, processing and packaging of an animal for human 
consumption when the animal is delivered or furnished by a customer 
that owns the animal and such meat or poultry is for use or 
consumption by such customer;
(ssss) all sales of tangible personal property or services purchased 
by or on behalf of doorstep inc., an organization that is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, for the purpose of providing short-term 
emergency aid to families and individuals in need, including assistance 
with food, clothing, rent, prescription medications, transportation and 
utilities, and providing information on services to promote long-term  SENATE BILL No. 98—page 37
self-sufficiency;
(tttt) on and after January 1, 2024, all sales of tangible personal 
property or services purchased by exploration place, inc., an 
organization that is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code, and which such 
property and services are used for the purpose of constructing, 
remodeling, furnishing or equipping a riverfront amphitheater, a 
destination playscape, an education center and indoor renovations at 
exploration place in Wichita, Kansas, all sales of tangible personal 
property or services purchased by Kansas children's discovery center 
inc. in Topeka, Kansas, and which such property and services are used 
for the purpose of constructing, remodeling, furnishing or equipping 
projects that include indoor-outdoor classrooms, an expanded multi-
media gallery, a workshop and loading dock and safety upgrades such 
as a tornado shelter, lactation room, first aid room and sensory room 
and all sales of tangible personal property or services purchased by a 
contractor for the purpose of constructing, remodeling, furnishing or 
equipping such projects, for such organizations, that would be exempt 
from taxation under the provisions of this section if purchased directly 
by such organizations. Nothing in this subsection shall be deemed to 
exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, remodeling, furnishing or equipping of 
facilities for such organization. When such organization shall contract 
for the purpose of constructing, remodeling, furnishing or equipping 
such projects, it shall obtain from the state and furnish to the contractor 
an exemption certificate for the project involved, and the contractor 
may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificate to all suppliers 
from whom such purchases are made, and such suppliers shall execute 
invoices covering the same bearing the number of such certificate. 
Upon completion of the project, the contractor shall furnish to such 
organization a sworn statement, on a form to be provided by the 
director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. If any materials purchased under such a certificate 
are found not to have been incorporated in such facilities or not to have 
been returned for credit or the sales or compensating tax otherwise 
imposed upon such materials that will not be so incorporated in such 
facilities reported and paid by such contractor to the director of taxation 
no later than the 20
th
 day of the month following the close of the month 
in which it shall be determined that such materials will not be used for 
the purpose for which such certificate was issued, such organization 
shall be liable for tax on all materials purchased for the project, and 
upon payment thereof may recover the same from the contractor 
together with reasonable attorney fees. Any contractor or agent, 
employee or subcontractor thereof, who purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and 
after January 1, 2024, but prior to the effective date of this act, upon the 
gross receipts received from any sale exempted by the amendatory 
provisions of this subsection shall be refunded. Each claim for a sales 
tax refund shall be verified and submitted to the director of taxation 
upon forms furnished by the director and shall be accompanied by any 
additional documentation required by the director. The director shall 
review each claim and shall refund that amount of sales tax paid as  SENATE BILL No. 98—page 38
determined under the provisions of this subsection. All refunds shall be 
paid from the sales tax refund fund upon warrants of the director of 
accounts and reports pursuant to vouchers approved by the director or 
the director's designee. The provisions of this subsection shall expire 
and have no effect on and after December 31, 2030;
(uuuu) (1) (A) all sales of equipment, machinery, software, 
ancillary components, appurtenances, accessories or other 
infrastructure purchased for use in the provision of communications 
services; and
(B) all services purchased by a provider in the provision of the 
communications service used in the repair, maintenance or installation 
in such communications service.
(2) As used in this subsection:
(A) "Communications service" means internet access service, 
telecommunications service, video service or any combination thereof.
(B) "Equipment, machinery, software, ancillary components, 
appurtenances, accessories or other infrastructure" includes, but is not 
limited to:
(i) Wires, cables, fiber, conduits, antennas, poles, switches, 
routers, amplifiers, rectifiers, repeaters, receivers, multiplexers, 
duplexers, transmitters, circuit cards, insulating and protective 
materials and cases, power equipment, backup power equipment, 
diagnostic equipment, storage devices, modems, cable modem 
termination systems and servers;
(ii) other general central office or headend equipment, such as 
channel cards, frames and cabinets;
(iii) equipment used in successor technologies, including items 
used to monitor, test, maintain, enable or facilitate qualifying 
equipment, machinery, software, ancillary components, appurtenances 
and accessories; and
(iv) other infrastructure that is used in whole or in part to provide 
communications services, including broadcasting, distributing, sending, 
receiving, storing, transmitting, retransmitting, amplifying, switching, 
providing connectivity for or routing communications services.
(C) "Internet access service" means the same as internet access as 
defined in section 1105 of the internet tax freedom act amendments of 
2007, public law 110-108.
(D) "Provider" means a person or entity that sells communications 
service, including an affiliate or subsidiary.
(E) "Telecommunications service" means the same as defined in 
K.S.A. 79-3602, and amendments thereto.
(F) "Video service" means the same as defined in K.S.A. 12-2022, 
and amendments thereto.
(3) The provisions of this subsection shall expire and have no 
effect on and after July 1, 2029;
(vvvv) (1) all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling a building that is operated by, or is intended to be operated 
by, the Kansas fairgrounds foundation, a not-for-profit corporation 
exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code of 1986, and located on the grounds of 
the Kansas state fair, and such tangible personal property would be 
exempt from taxation under the provisions of this paragraph if 
purchased directly by such eligible not-for-profit corporation. Nothing 
in this subsection shall be deemed to exempt the purchase of any 
construction machinery, equipment or tools used in the constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing 
or remodeling a building for such eligible not-for-profit corporation.  SENATE BILL No. 98—page 39
When such eligible not-for-profit corporation contracts for the purpose 
of constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling a building, such corporation shall 
obtain from the state and furnish to the contractor an exemption 
certificate for the project involved, and such contractor may purchase 
materials for incorporation in such project. The contractor shall furnish 
the number of such certificate to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering 
such purchases bearing the number of such certificate. Upon 
completion of the project, the contractor shall furnish to such eligible 
not-for-profit corporation a sworn statement, on a form to be provided 
by the director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. If any materials purchased under such a certificate 
are found not to have been incorporated in the building or returned for 
credit, the contractor shall report and pay the sales or compensating tax 
to the director of taxation not later than the 20
th
 day of the month 
following the close of the month in which it is determined that such 
materials will not be used for the purpose for which such certificate 
was issued. The eligible not-for-profit corporation concerned shall be 
liable for tax on all materials purchased for the project, and upon 
payment thereof, the eligible not-for-profit corporation may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof who shall 
use or otherwise dispose of any materials purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials shall be guilty of a misdemeanor and, 
upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto.
(2) Sales tax paid on and after May 19, 2023, but prior to the 
effective date of this act upon the gross receipts received from any sale 
which would have been exempted by the provisions of this subsection 
had such sale occurred after the effective date of this act shall be 
refunded. Each claim for a sales tax refund shall be verified and 
submitted to the director of taxation upon forms furnished by the 
director and shall be accompanied by any additional documentation 
required by the director. The director shall review each claim and shall 
refund that amount of sales tax paid as determined under the provisions 
of this subsection. All refunds shall be paid from the sales tax refund 
fund upon warrants of the director of accounts and reports pursuant to 
vouchers approved by the director or the director's designee; and
(wwww) (1) all sales of tangible personal property or services 
purchased by a pregnancy resource center or residential maternity 
facility.
(2) As used in this subsection, "pregnancy resource center" or 
"residential maternity facility" means an organization that is:
(A) Exempt from federal income taxation pursuant to section 
501(c)(3) of the federal internal revenue code of 1986;
(B) a nonprofit organization organized under the laws of this state; 
and
(C) a pregnancy resource center or residential maternity facility 
that:
(i) Maintains a dedicated phone number for clients;
(ii) maintains in this state its primary physical office, clinic or 
residential home that is open for clients for a minimum of 20 hours per 
week, excluding state holidays;
(iii) offers services, at no cost to the client, for the express purpose  SENATE BILL No. 98—page 40
of providing assistance to women in order to carry their pregnancy to 
term, encourage parenting or adoption, prevent abortion and promote 
healthy childbirth; and
(iv) utilizes trained healthcare providers, as defined by K.S.A. 
2024 Supp. 79-32,316, and amendments thereto, to perform any 
available medical procedures.; and
(xxxx) all sales of tangible personal property or services 
purchased for the purpose of and in conjunction with constructing, 
reconstructing, enlarging or remodeling a qualified data center by a 
qualified firm that meets the requirements established in sections 1 
through 3, and amendments thereto, and has been approved and 
certified for a project exemption certificate by the secretary of 
commerce, the sale and installation of machinery and data center 
equipment and eligible data center costs purchased by such qualified 
firm for such qualified data center and labor services to install, apply, 
repair, service, alter or maintain data center equipment of such 
qualified firm at such qualified data center. When a person contracts 
for the construction, reconstruction, enlargement or remodeling of any 
such qualified data center, such person shall obtain from the state and 
furnish to the contractor an exemption certificate for the project 
involved, and the contractor may purchase materials, machinery and 
equipment for incorporation in such project. The contractor shall 
furnish the number of such certificates to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering 
such purchases bearing the number of such certificates. Upon 
completion of the project, the contractor shall furnish to the owner of 
the qualified firm a sworn statement, on a form to be provided by the 
director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. Any contractor or any agent, employee or 
subcontractor thereof who shall use or otherwise dispose of any 
materials, machinery or equipment purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise 
imposed thereon shall be guilty of a misdemeanor and, upon conviction 
thereof, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto. As used in this subsection, "data 
center equipment," "eligible data center costs," "qualified data center" 
and "qualified firm" mean the same as defined in section 1, and 
amendments thereto.
Sec. 7. K.S.A. 2024 Supp. 66-101j and 79-3606 are hereby 
repealed. SENATE BILL No. 98—page 41
Sec. 8. This act shall take effect and be in force from and after its 
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE adopted
    Conference Committee Report ________________
_________________________
President of the Senate.  
_________________________
Secretary of the Senate.  
         
Passed the HOUSE
         as amended _________________________
HOUSE adopted
    Conference Committee Report ________________
_________________________
Speaker of the House.  
_________________________
Chief Clerk of the House.  
APPROVED _____________________________
_________________________
Governor.