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1706 JOURNAL OF THE HOUSE Journal of the House FORTY-SECOND DAY HALL OF THE HOUSE OF REPRESENTATIVES, TOPEKA, KS, Thursday, March 14, 2002, 11:00 a.m. The House met pursuant to adjournment with Speaker Glasscock in the chair. The roll was called with 123 members present. Rep. O’Brien was excused on verified illness. Rep. Krehbiel was excused on excused absence by the Speaker. Prayer sung by guest chaplains, the Reverends Tom and Lois Harder, Lorraine Avenue Mennonite Church, Wichita, and guests of Rep. Loganbill: Prayer of St. Francis Lord, make me an instrument of your peace. Where there is hatred, let me sow love. Where there is injury, pardon. And where there is doubting, let me bring faith in thee. And Lord, make me an instrument of your peace. Where there is despairing, let me bring your hope. Where there is darkness, your light. And where there is sadness, let me bring your joy. O divine master, grant that I may seek Not so much to be consoled, as to console. To be understood, as to understand, Not so much to be loved, as to love another. For it is in giving that we now receive. It is in pardoning that we are now pardoned. And it is in dying that we are now born again. Lord, make me an instrument of your peace. Where there is hatred, let me bring your love. Amen. The Pledge of Allegiance was led by Rep. Barnes. REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS The following bills and resolution were referred to committees as indicated: Appropriations: HCR 5052; SB 637. Business, Commerce and Labor: HB 3021. Federal and State Affairs: SB 629. Judiciary: Sub. SB 339; SB 559. To be referred: HB 3022; SB 403. MESSAGE FROM THE SENATE Announcing passage of SB 483, SB 521, SB 541, SB 557. Also, announcing passage of HB 2679. INTRODUCTION OF SENATE BILLS AND CONCURRENT RESOLUTIONS The following Senate bills were thereupon introduced and read by title: SB 483, SB 521, SB 541, SB 557. MARCH 14, 2002 1707 INTRODUCTION OF ORIGINAL MOTIONS AND HOUSE RESOLUTIONS The following resolution was introduced and read by title: HOUSE RESOLUTION No. 6009— By Representative D. Williams A RESOLUTION urging the Legislature to take timely action on school finance. WHEREAS, The education of our children is one of the basic responsibilities of our society; and WHEREAS, The Constitution of the State of Kansas mandates that the Legislature make suitable provision for financing the educational needs of the state; and WHEREAS, By state statute, Kansas school districts must notify teachers by May 1 of each year as to whether or not their contracts are being renewed; and WHEREAS, There are those Kansas school districts which have policies requiring they provide early notification should they have to reduce their teaching staff; and WHEREAS, The education of our children from kindergarten through high school comprises the largest portion of our state budget, at 54%, and could continue to increase; and WHEREAS, The state is experiencing revenue shortfalls because of the economic recession felt in Kansas and throughout our country therefore making the desired increases in school funding difficult to meet; and WHEREAS, Finalizing school funding often occurs in the final moments of the legislative session thus delaying school districts from completing planning, budgeting and teacher contracts: Now, therefore, Be it resolved by the House of Representatives of the State of Kansas: That the House of Representatives pledges to complete, along with the Senate, the necessary legislation providing for the financing of Kansas public schools from kindergarten through high school by April 5, 2002. CONSENT CALENDAR No objection was made to SB 390 appearing on the Consent Calendar for the first day. On motion of Rep. Weber, the House went into Committee of the Whole, with Rep. Stone in the chair. COMMITTEE OF THE WHOLE On motion of Rep. Stone, Committee of the Whole report, as follows, was adopted: Recommended that committee report to HB 2560 be adopted; also, roll call was demanded on motion of Rep. Newton to amend, on page 1, by striking all in lines 17 through 43; On page 4, by striking all in line 11 and inserting the following: ‘‘Section. 1. On and after June 1, 2002, K.S.A. 79-3310 is hereby amended to read as follows: 79-3310. There is imposed a tax upon all cigarettes sold, distributed or given away within the state of Kansas. The rate of such tax shall be $.24 $1.14 on each 20 cigarettes or fractional part thereof or $.30 $1.37 on each 25 cigarettes, as the case requires. Such tax shall be collected and paid to the director as provided in this act. Such tax shall be paid only once and shall be paid by the wholesale dealer first receiving the cigarettes as herein provided. The taxes imposed by this act are hereby levied upon all sales of cigarettes made to any department, institution or agency of the state of Kansas, and to the political subdivisions thereof and their departments, institutions and agencies. New Sec. 2. On or before June 30, 2002, each wholesale dealer, retail dealer and vending machine operator shall file a report with the director in such form as the director may prescribe showing cigarettes, cigarette stamps and meter imprints on hand at 12:01 a.m. on June 1, 2002. A tax of $.90 on each 20 cigarettes or fractional part thereof or $1.07 on each 25 cigarettes, as the case requires and $.90 or $1.07, as the case requires upon all tax stamps and all meter imprints purchased from the director and not affixed to cigarettes prior to June 1, 2002, is hereby imposed and shall be due and payable on or before June 30, 2002. The tax imposed upon such cigarettes, tax stamps and meter imprints shall be imposed only 1708 JOURNAL OF THE HOUSE once under this act. The director shall remit all moneys collected pursuant to this section to the state treasurer who shall credit the entire amount thereof to the state general fund. Sec. 3. On and after June 1, 2002, K.S.A. 2001 Supp. 79-3311 is hereby amended to read as follows: 79-3311. The director shall design and designate indicia of tax payment to be affixed to each package of cigarettes as provided by this act. The director shall sell water applied stamps only to licensed wholesale dealers in the amounts of 1,000 or multiples thereof. Stamps applied by the heat process shall be sold only in amounts of 30,000 or multiples thereof, except that such stamps which are suitable for packages containing 25 cigarettes each shall be sold in amounts prescribed by the director. Meter imprints shall be sold only in amounts of 10,000 or multiples thereof. Water applied stamps in amounts of 10,000 or multiples thereof and stamps applied by the heat process and meter imprints shall be supplied to wholesale dealers at a discount of 2.65% 0.55% from the face value thereof, and shall be deducted at the time of purchase or from the remittance therefor as hereinafter provided. Any wholesale cigarette dealer who shall file with the director a bond, of acceptable form, payable to the state of Kansas with a corporate surety authorized to do business in Kansas, shall be permitted to purchase stamps, and remit therefor to the director within 30 days after each such purchase, up to a maximum outstanding at any one time of 85% of the amount of the bond. Failure on the part of any wholesale dealer to remit as herein specified shall be cause for forfeiture of such dealer’s bond. All revenue received from the sale of such stamps or meter imprints shall be remitted to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury. The state treasurer shall first credit such amount as the director shall order to the cigarette tax refund fund and shall credit the remaining balance to the state general fund. A refund fund designated the cigarette tax refund fund not to exceed $10,000 at any time shall be set apart and maintained by the director from taxes collected under this act and held by the state treasurer for prompt payment of all refunds authorized by this act. Such cigarette tax refund fund shall be in such amount as the director shall determine is necessary to meet current refunding requirements under this act. The wholesale cigarette dealer shall affix to each package of cigarettes stamps or tax meter imprints required by this act prior to the sale of cigarettes to any person, by such dealer or such dealer’s agent or agents, within the state of Kansas. The director is empowered to authorize wholesale dealers to affix revenue tax meter imprints upon original packages of cigarettes and is charged with the duty of regulating the use of tax meters to secure payment of the proper taxes. No wholesale dealer shall affix revenue tax meter imprints to original packages of cigarettes without first having obtained permission from the director to employ this method of affixation. If the director approves the wholesale dealer’s application for permission to affix revenue tax meter imprints to original packages of cigarettes, the director shall require such dealer to file a suitable bond payable to the state of Kansas executed by a corporate surety authorized to do business in Kansas. The director may, to assure the proper collection of taxes imposed by the act, revoke or suspend the privilege of imprinting tax meter imprints upon original packages of cigarettes. All meters shall be under the direct control of the director, and all transfer assignments or anything pertaining thereto must first be authorized by the director. All inks used in the stamping of cigarettes must be of a special type devised for use in connection with the machine employed and approved by the director. All repairs to the meter are strictly prohibited except by a duly authorized representative of the director. Requests for service shall be directed to the director. Meter machine ink imprints on all packages shall be clear and legible. If a wholesale dealer continuously issues illegible cigarette tax meter imprints, it shall be considered sufficient cause for revocation of such dealer’s permit to use a cigarette tax meter. A licensed wholesale dealer may, for the purpose of sale in another state, transport cigarettes not bearing Kansas indicia of tax payment through the state of Kansas provided such cigarettes are contained in sealed and original cartons. Sec. 4. On and after June 1, 2002, K.S.A. 79-3312 is hereby amended to read as follows: 79-3312. The director shall redeem any unused stamps or meter imprints that any wholesale dealer presents for redemption within six months after the purchase thereof, at the face value less 2.65% 0.55% thereof if such stamps or meter imprints have been purchased from MARCH 14, 2002 1709 the director. The director shall prepare a voucher showing the net amount of such refund due, and the director of accounts and reports shall draw a warrant on the state treasurer for the same. Wholesale dealers shall be entitled to a refund of the tax paid on cigarettes which have become unfit for sale upon proof thereof less 2.65% 0.55% of such tax. Sec. 5. On and after June 1, 2002, K.S.A. 79-3371 is hereby amended to read as follows: 79-3371. A tax is hereby imposed upon the privilege of selling or dealing in tobacco products in this state by any person engaged in business as a distributor thereof, at the rate of ten percent (10%) 22% of the wholesale sales price of such tobacco products. Such tax shall be imposed at the time the distributor (a) brings or causes to be brought into this state from without the state tobacco products for sale; (b) makes, manufactures, or fabricates tobacco products in this state for sale in this state; or (c) ships or transports tobacco products to retailers in this state to be sold by those retailers. New Sec. 6. On or before June 30, 2002, each distributor having a place of business in this state shall file a report with the director in such form as the director may prescribe, showing the tobacco products on hand at 12:01 a.m. on June 1, 2002. A tax at a rate equal to 12% of the wholesale sales price of such tobacco products is hereby imposed upon such tobacco products and shall be due and payable on or before June 30, 2002. The tax upon such tobacco products shall be imposed only once under this act. The director shall remit all moneys collected pursuant to this section to the state treasurer who shall credit 80.54% thereof to the state school district finance fund and 19.46% thereof to the post-secondary education excellence fund. Sec. 7. On and after June 1, 2002, K.S.A. 79-3378 is hereby amended to read as follows: 79-3378. On or before the twentieth 20th day of each calendar month every distributor with a place of business in this state shall file a return with the director showing the quantity and wholesale sales price of each tobacco product (1) brought, or caused to be brought, into this state for sale; and (2) made, manufactured, or fabricated in this state for sale in this state during the preceding calendar month. Every licensed distributor outside this state shall in like manner file a return showing the quantity and wholesale sales price of each tobacco product shipped or transported to retailers in this state to be sold by those retailers, during the preceding calendar month. Returns shall be made upon forms furnished and prescribed by the director. Each return shall be accompanied by a remittance for the full tax liability shown therein, less four percent (4%) 1.8% of such liability as compensation to reimburse the distributor for his or her expenses incurred in the administration of this act. As soon as practicable after any return is filed, the director shall examine the return. If the director finds that, in his or her judgment, the return is incorrect and any amount of tax is due from the distributor and unpaid, he or she the director shall notify the distributor of the deficiency. If a deficiency disclosed by the director’s examination cannot be allocated by him to a particular month or months, he or she the director may nevertheless notify the distributor that a deficiency exists and state the amount of tax due. Such notice shall be given to the distributor by registered or certified mail. Sec. 8. On and after June 1, 2002, K.S.A. 79-3310, 79-3312, 79-3371 and 79-3378 and K.S.A. 2001 Supp. 79-3311 are hereby repealed.’’; Also, on page 4, in line 13, by striking ‘‘statute book’’ and inserting ‘‘Kansas register’’; By renumbering existing section 3 as section 9; In the title, in line 12, after ‘‘cigarettes’’ by inserting ‘‘and tobacco products; increasing the rate thereof’’; by striking all in lines 13 and 14 and inserting ‘‘amending K.S.A. 79-3310, 79-3312, 79-3371 and 79-3378 and K.S.A. 2001 Supp. 79-3311 and repealing the existing sections.’’; On roll call, the vote was: Yeas 22; Nays 99; Present but not voting: 0; Absent or not voting: 4. Yeas: Ballard, Benlon, Bethell, Campbell, Dahl, DiVita, Dreher, Glasscock, Huff, Lane, Lightner, Merrick, Judy Morrison, Newton, Owens, Patterson, J. Peterson, Powers, Ray, Storm, Tomlinson, D. Williams. Nays: Aday, Aurand, Ballou, Barnes, Beggs, Boston, Burroughs, Compton, Cook, Cox, Crow, DeCastro, Dillmore, Edmonds, Faber, Feuerborn, Findley, Flaharty, Flora, Freeborn, Garner, Gatewood, Gilbert, Goering, Gordon, Grant, Hayzlett, Henderson, Henry, Hermes, Holmes, Horst, Howell, Huebert, Humerickhouse, Hutchins, Huy, Johnson, 1710 JOURNAL OF THE HOUSE Kauffman, Kirk, Klein, Kuether, Landwehr, Larkin, Levinson, Light, Lloyd, M. Long, P. Long, Loyd, Mason, Mayans, Mays, McClure, McCreary, McKinney, McLeland, Miller, Minor, Jim Morrison, Myers, Neufeld, Nichols, Novascone, O’Neal, Osborne, Ostmeyer, Palmer, Pauls, E. Peterson, Phelps, Pottorff, L. Powell, T. Powell, Pyle, Reardon, Rehorn, Ruff, Schwartz, Sharp, Showalter, Shriver, Shultz, Sloan, Stone, Swenson, Tafanelli, Tanner, Thimesch, R. Toelkes, Toplikar, Vickrey, Weber, Wells, Welshimer, Wilk, J. Williams, Wilson, Winn. Present but not voting: None. Absent or not voting: Krehbiel, Loganbill, O’Brien, Spangler. The motion of Rep. Newton did not prevail. Also, roll call was demanded on further motion of Rep. Newton to amend HB 2560, on page 1, by striking all in lines 17 through 43; On page 4, by striking all in line 11 and inserting the following: ‘‘Section. 1. On and after June 1, 2002, K.S.A. 79-3310 is hereby amended to read as follows: 79-3310. There is imposed a tax upon all cigarettes sold, distributed or given away within the state of Kansas. The rate of such tax shall be $.24 $.99 on each 20 cigarettes or fractional part thereof or $.30 $1.19 on each 25 cigarettes, as the case requires. Such tax shall be collected and paid to the director as provided in this act. Such tax shall be paid only once and shall be paid by the wholesale dealer first receiving the cigarettes as herein provided. The taxes imposed by this act are hereby levied upon all sales of cigarettes made to any department, institution or agency of the state of Kansas, and to the political subdivisions thereof and their departments, institutions and agencies. New Sec. 2. On or before June 30, 2002, each wholesale dealer, retail dealer and vending machine operator shall file a report with the director in such form as the director may prescribe showing cigarettes, cigarette stamps and meter imprints on hand at 12:01 a.m. on June 1, 2002. A tax of $.75 on each 20 cigarettes or fractional part thereof or $.89 on each 25 cigarettes, as the case requires and $.75 or $.89, as the case requires upon all tax stamps and all meter imprints purchased from the director and not affixed to cigarettes prior to June 1, 2002, is hereby imposed and shall be due and payable on or before June 30, 2002. The tax imposed upon such cigarettes, tax stamps and meter imprints shall be imposed only once under this act. The director shall remit all moneys collected pursuant to this section to the state treasurer who shall credit the entire amount thereof to the state general fund. Sec. 3. On and after June 1, 2002, K.S.A. 2001 Supp. 79-3311 is hereby amended to read as follows: 79-3311. The director shall design and designate indicia of tax payment to be affixed to each package of cigarettes as provided by this act. The director shall sell water applied stamps only to licensed wholesale dealers in the amounts of 1,000 or multiples thereof. Stamps applied by the heat process shall be sold only in amounts of 30,000 or multiples thereof, except that such stamps which are suitable for packages containing 25 cigarettes each shall be sold in amounts prescribed by the director. Meter imprints shall be sold only in amounts of 10,000 or multiples thereof. Water applied stamps in amounts of 10,000 or multiples thereof and stamps applied by the heat process and meter imprints shall be supplied to wholesale dealers at a discount of 2.65% 0.64% from the face value thereof, and shall be deducted at the time of purchase or from the remittance therefor as hereinafter provided. Any wholesale cigarette dealer who shall file with the director a bond, of acceptable form, payable to the state of Kansas with a corporate surety authorized to do business in Kansas, shall be permitted to purchase stamps, and remit therefor to the director within 30 days after each such purchase, up to a maximum outstanding at any one time of 85% of the amount of the bond. Failure on the part of any wholesale dealer to remit as herein specified shall be cause for forfeiture of such dealer’s bond. All revenue received from the sale of such stamps or meter imprints shall be remitted to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury. The state treasurer shall first credit such amount as the director shall order to the cigarette tax refund fund and shall credit the remaining balance to the state general fund. A refund fund designated the cigarette tax refund fund not to exceed $10,000 at any time shall be set apart and maintained by the director from taxes collected under this act and held by the state MARCH 14, 2002 1711 treasurer for prompt payment of all refunds authorized by this act. Such cigarette tax refund fund shall be in such amount as the director shall determine is necessary to meet current refunding requirements under this act. The wholesale cigarette dealer shall affix to each package of cigarettes stamps or tax meter imprints required by this act prior to the sale of cigarettes to any person, by such dealer or such dealer’s agent or agents, within the state of Kansas. The director is empowered to authorize wholesale dealers to affix revenue tax meter imprints upon original packages of cigarettes and is charged with the duty of regulating the use of tax meters to secure payment of the proper taxes. No wholesale dealer shall affix revenue tax meter imprints to original packages of cigarettes without first having obtained permission from the director to employ this method of affixation. If the director approves the wholesale dealer’s application for permission to affix revenue tax meter imprints to original packages of cigarettes, the director shall require such dealer to file a suitable bond payable to the state of Kansas executed by a corporate surety authorized to do business in Kansas. The director may, to assure the proper collection of taxes imposed by the act, revoke or suspend the privilege of imprinting tax meter imprints upon original packages of cigarettes. All meters shall be under the direct control of the director, and all transfer assignments or anything pertaining thereto must first be authorized by the director. All inks used in the stamping of cigarettes must be of a special type devised for use in connection with the machine employed and approved by the director. All repairs to the meter are strictly prohibited except by a duly authorized representative of the director. Requests for service shall be directed to the director. Meter machine ink imprints on all packages shall be clear and legible. If a wholesale dealer continuously issues illegible cigarette tax meter imprints, it shall be considered sufficient cause for revocation of such dealer’s permit to use a cigarette tax meter. A licensed wholesale dealer may, for the purpose of sale in another state, transport cigarettes not bearing Kansas indicia of tax payment through the state of Kansas provided such cigarettes are contained in sealed and original cartons. Sec. 4. On and after June 1, 2002, K.S.A. 79-3312 is hereby amended to read as follows: 79-3312. The director shall redeem any unused stamps or meter imprints that any wholesale dealer presents for redemption within six months after the purchase thereof, at the face value less 2.65% 0.64% thereof if such stamps or meter imprints have been purchased from the director. The director shall prepare a voucher showing the net amount of such refund due, and the director of accounts and reports shall draw a warrant on the state treasurer for the same. Wholesale dealers shall be entitled to a refund of the tax paid on cigarettes which have become unfit for sale upon proof thereof less 2.65% 0.64% of such tax. Sec. 5. On and after June 1, 2002, K.S.A. 79-3371 is hereby amended to read as follows: 79-3371. A tax is hereby imposed upon the privilege of selling or dealing in tobacco products in this state by any person engaged in business as a distributor thereof, at the rate of ten percent (10%) 20% of the wholesale sales price of such tobacco products. Such tax shall be imposed at the time the distributor (a) brings or causes to be brought into this state from without the state tobacco products for sale; (b) makes, manufactures, or fabricates tobacco products in this state for sale in this state; or (c) ships or transports tobacco products to retailers in this state to be sold by those retailers. New Sec. 6. On or before June 30, 2002, each distributor having a place of business in this state shall file a report with the director in such form as the director may prescribe, showing the tobacco products on hand at 12:01 a.m. on June 1, 2002. A tax at a rate equal to 10% of the wholesale sales price of such tobacco products is hereby imposed upon such tobacco products and shall be due and payable on or before June 30, 2002. The tax upon such tobacco products shall be imposed only once under this act. The director shall remit all moneys collected pursuant to this section to the state treasurer who shall credit the entire amount thereof to the state general fund. Sec. 7. On and after June 1, 2002, K.S.A. 79-3378 is hereby amended to read as follows: 79-3378. On or before the twentieth 20th day of each calendar month every distributor with a place of business in this state shall file a return with the director showing the quantity and wholesale sales price of each tobacco product (1) brought, or caused to be brought, into this state for sale; and (2) made, manufactured, or fabricated in this state for sale in this state during the preceding calendar month. Every licensed distributor outside this state shall 1712 JOURNAL OF THE HOUSE in like manner file a return showing the quantity and wholesale sales price of each tobacco product shipped or transported to retailers in this state to be sold by those retailers, during the preceding calendar month. Returns shall be made upon forms furnished and prescribed by the director. Each return shall be accompanied by a remittance for the full tax liability shown therein, less four percent (4%) 2% of such liability as compensation to reimburse the distributor for his or her expenses incurred in the administration of this act. As soon as practicable after any return is filed, the director shall examine the return. If the director finds that, in his or her judgment, the return is incorrect and any amount of tax is due from the distributor and unpaid, he or she the director shall notify the distributor of the deficiency. If a deficiency disclosed by the director’s examination cannot be allocated by him to a particular month or months, he or she the director may nevertheless notify the distributor that a deficiency exists and state the amount of tax due. Such notice shall be given to the distributor by registered or certified mail. Sec. 8. On and after June 1, 2002, K.S.A. 79-3310, 79-3312, 79-3371 and 79-3378 and K.S.A. 2001 Supp. 79-3311 are hereby repealed.’’; Also, on page 4, in line 13, by striking ‘‘statute book’’ and inserting ‘‘Kansas register’’; By renumbering existing section 3 as section 9; In the title, in line 12, after ‘‘cigarettes’’ by inserting ‘‘and tobacco products; increasing the rate thereof’’; by striking all in lines 13 and 14 and inserting ‘‘amending K.S.A. 79-3310, 79-3312, 79-3371 and 79-3378 and K.S.A. 2001 Supp. 79-3311 and repealing the existing sections.’’; On roll call, the vote was: Yeas 23; Nays 95; Present but not voting: 0; Absent or not voting: 7. Yeas: Ballard, Benlon, Bethell, Campbell, Dahl, DiVita, Dreher, Glasscock, Huff, Lane, Lightner, P. Long, Newton, Owens, Patterson, J. Peterson, Powers, Ray, Stone, Storm, Tomlinson, Wilk, D. Williams. Nays: Aday, Aurand, Ballou, Barnes, Beggs, Boston, Burroughs, Compton, Cook, Cox, Crow, DeCastro, Dillmore, Edmonds, Faber, Feuerborn, Findley, Flaharty, Flora, Freeborn, Garner, Gatewood, Gilbert, Goering, Gordon, Grant, Hayzlett, Henderson, Henry, Holmes, Horst, Howell, Huebert, Humerickhouse, Hutchins, Huy, Johnson, Kauffman, Kirk, Klein, Kuether, Landwehr, Larkin, Levinson, Light, Lloyd, M. Long, Loyd, Mason, Mayans, Mays, McClure, McCreary, McKinney, McLeland, Merrick, Miller, Minor, Jim Morrison, Judy Morrison, Myers, Neufeld, Nichols, Novascone, O’Neal, Osborne, Ostmeyer, Palmer, Pauls, E. Peterson, Phelps, Pottorff, L. Powell, T. Powell, Pyle, Reardon, Rehorn, Ruff, Schwartz, Showalter, Shriver, Shultz, Sloan, Swenson, Tafanelli, Tanner, R. Toelkes, Toplikar, Vickrey, Weber, Wells, Welshimer, J. Williams, Wilson, Winn. Present but not voting: None. Absent or not voting: Hermes, Krehbiel, Loganbill, O’Brien, Sharp, Spangler, Thimesch. The motion of Rep. Newton did not prevail. Also, roll call was demanded on further motion of Rep. Newton to amend HB 2560, on page 1, by striking all in lines 17 through 43; On page 4, by striking all in line 11 and inserting the following: ‘‘Section. 1. On and after June 1, 2002, K.S.A. 79-3310 is hereby amended to read as follows: 79-3310. There is imposed a tax upon all cigarettes sold, distributed or given away within the state of Kansas. The rate of such tax shall be $.24 $.74 on each 20 cigarettes or fractional part thereof or $.30 $.89 on each 25 cigarettes, as the case requires. Such tax shall be collected and paid to the director as provided in this act. Such tax shall be paid only once and shall be paid by the wholesale dealer first receiving the cigarettes as herein provided. The taxes imposed by this act are hereby levied upon all sales of cigarettes made to any department, institution or agency of the state of Kansas, and to the political subdivisions thereof and their departments, institutions and agencies. New Sec. 2. On or before June 30, 2002, each wholesale dealer, retail dealer and vending machine operator shall file a report with the director in such form as the director may prescribe showing cigarettes, cigarette stamps and meter imprints on hand at 12:01 a.m. on June 1, 2002. A tax of $.50 on each 20 cigarettes or fractional part thereof or $.59 on each 25 cigarettes, as the case requires and $.50 or $.59, as the case requires upon all tax stamps and all meter imprints purchased from the director and not affixed to cigarettes prior to MARCH 14, 2002 1713 June 1, 2002, is hereby imposed and shall be due and payable on or before June 30, 2002. The tax imposed upon such cigarettes, tax stamps and meter imprints shall be imposed only once under this act. The director shall remit all moneys collected pursuant to this section to the state treasurer who shall credit the entire amount thereof to the state general fund. Sec. 3. On and after June 1, 2002, K.S.A. 2001 Supp. 79-3311 is hereby amended to read as follows: 79-3311. The director shall design and designate indicia of tax payment to be affixed to each package of cigarettes as provided by this act. The director shall sell water applied stamps only to licensed wholesale dealers in the amounts of 1,000 or multiples thereof. Stamps applied by the heat process shall be sold only in amounts of 30,000 or multiples thereof, except that such stamps which are suitable for packages containing 25 cigarettes each shall be sold in amounts prescribed by the director. Meter imprints shall be sold only in amounts of 10,000 or multiples thereof. Water applied stamps in amounts of 10,000 or multiples thereof and stamps applied by the heat process and meter imprints shall be supplied to wholesale dealers at a discount of 2.65% 0.85% from the face value thereof, and shall be deducted at the time of purchase or from the remittance therefor as hereinafter provided. Any wholesale cigarette dealer who shall file with the director a bond, of acceptable form, payable to the state of Kansas with a corporate surety authorized to do business in Kansas, shall be permitted to purchase stamps, and remit therefor to the director within 30 days after each such purchase, up to a maximum outstanding at any one time of 85% of the amount of the bond. Failure on the part of any wholesale dealer to remit as herein specified shall be cause for forfeiture of such dealer’s bond. All revenue received from the sale of such stamps or meter imprints shall be remitted to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury. The state treasurer shall first credit such amount as the director shall order to the cigarette tax refund fund and shall credit the remaining balance to the state general fund. A refund fund designated the cigarette tax refund fund not to exceed $10,000 at any time shall be set apart and maintained by the director from taxes collected under this act and held by the state treasurer for prompt payment of all refunds authorized by this act. Such cigarette tax refund fund shall be in such amount as the director shall determine is necessary to meet current refunding requirements under this act. The wholesale cigarette dealer shall affix to each package of cigarettes stamps or tax meter imprints required by this act prior to the sale of cigarettes to any person, by such dealer or such dealer’s agent or agents, within the state of Kansas. The director is empowered to authorize wholesale dealers to affix revenue tax meter imprints upon original packages of cigarettes and is charged with the duty of regulating the use of tax meters to secure payment of the proper taxes. No wholesale dealer shall affix revenue tax meter imprints to original packages of cigarettes without first having obtained permission from the director to employ this method of affixation. If the director approves the wholesale dealer’s application for permission to affix revenue tax meter imprints to original packages of cigarettes, the director shall require such dealer to file a suitable bond payable to the state of Kansas executed by a corporate surety authorized to do business in Kansas. The director may, to assure the proper collection of taxes imposed by the act, revoke or suspend the privilege of imprinting tax meter imprints upon original packages of cigarettes. All meters shall be under the direct control of the director, and all transfer assignments or anything pertaining thereto must first be authorized by the director. All inks used in the stamping of cigarettes must be of a special type devised for use in connection with the machine employed and approved by the director. All repairs to the meter are strictly prohibited except by a duly authorized representative of the director. Requests for service shall be directed to the director. Meter machine ink imprints on all packages shall be clear and legible. If a wholesale dealer continuously issues illegible cigarette tax meter imprints, it shall be considered sufficient cause for revocation of such dealer’s permit to use a cigarette tax meter. A licensed wholesale dealer may, for the purpose of sale in another state, transport cigarettes not bearing Kansas indicia of tax payment through the state of Kansas provided such cigarettes are contained in sealed and original cartons. Sec. 4. On and after June 1, 2002, K.S.A. 79-3312 is hereby amended to read as follows: 79-3312. The director shall redeem any unused stamps or meter imprints that any wholesale 1714 JOURNAL OF THE HOUSE dealer presents for redemption within six months after the purchase thereof, at the face value less 2.65% 0.85% thereof if such stamps or meter imprints have been purchased from the director. The director shall prepare a voucher showing the net amount of such refund due, and the director of accounts and reports shall draw a warrant on the state treasurer for the same. Wholesale dealers shall be entitled to a refund of the tax paid on cigarettes which have become unfit for sale upon proof thereof less 2.65% 0.85% of such tax. Sec. 5. On and after June 1, 2002, K.S.A. 79-3371 is hereby amended to read as follows: 79-3371. A tax is hereby imposed upon the privilege of selling or dealing in tobacco products in this state by any person engaged in business as a distributor thereof, at the rate of ten percent (10%) 16% of the wholesale sales price of such tobacco products. Such tax shall be imposed at the time the distributor (a) brings or causes to be brought into this state from without the state tobacco products for sale; (b) makes, manufactures, or fabricates tobacco products in this state for sale in this state; or (c) ships or transports tobacco products to retailers in this state to be sold by those retailers. New Sec. 6. On or before June 30, 2002, each distributor having a place of business in this state shall file a report with the director in such form as the director may prescribe, showing the tobacco products on hand at 12:01 a.m. on June 1, 2002. A tax at a rate equal to 6% of the wholesale sales price of such tobacco products is hereby imposed upon such tobacco products and shall be due and payable on or before June 30, 2002. The tax upon such tobacco products shall be imposed only once under this act. The director shall remit all moneys collected pursuant to this section to the state treasurer who shall credit the entire amount thereof to the state general fund. Sec. 7. On and after June 1, 2002, K.S.A. 79-3378 is hereby amended to read as follows: 79-3378. On or before the twentieth 20th day of each calendar month every distributor with a place of business in this state shall file a return with the director showing the quantity and wholesale sales price of each tobacco product (1) brought, or caused to be brought, into this state for sale; and (2) made, manufactured, or fabricated in this state for sale in this state during the preceding calendar month. Every licensed distributor outside this state shall in like manner file a return showing the quantity and wholesale sales price of each tobacco product shipped or transported to retailers in this state to be sold by those retailers, during the preceding calendar month. Returns shall be made upon forms furnished and prescribed by the director. Each return shall be accompanied by a remittance for the full tax liability shown therein, less four percent (4%) 2.5% of such liability as compensation to reimburse the distributor for his or her expenses incurred in the administration of this act. As soon as practicable after any return is filed, the director shall examine the return. If the director finds that, in his or her judgment, the return is incorrect and any amount of tax is due from the distributor and unpaid, he or she the director shall notify the distributor of the deficiency. If a deficiency disclosed by the director’s examination cannot be allocated by him to a particular month or months, he or she the director may nevertheless notify the distributor that a deficiency exists and state the amount of tax due. Such notice shall be given to the distributor by registered or certified mail. Sec. 8. On and after June 1, 2002, K.S.A. 79-3310, 79-3312, 79-3371 and 79-3378 and K.S.A. 2001 Supp. 79-3311 are hereby repealed.’’; Also, on page 4, in line 13, by striking ‘‘statute book’’ and inserting ‘‘Kansas register’’; By renumbering existing section 3 as section 9; In the title, in line 12, after ‘‘cigarettes’’ by inserting ‘‘and tobacco products; increasing the rate thereof’’; by striking all in lines 13 and 14 and inserting ‘‘amending K.S.A. 79-3310, 79-3312, 79-3371 and 79-3378 and K.S.A. 2001 Supp. 79-3311 and repealing the existing sections.’’; On roll call, the vote was: Yeas 34; Nays 83; Present but not voting: 0; Absent or not voting: 8. Yeas: Aurand, Ballard, Benlon, Bethell, Campbell, Cox, Crow, Dahl, DiVita, Dreher, Findley, Glasscock, Hermes, Huff, Lane, Loyd, Judy Morrison, Newton, O’Neal, Owens, Patterson, E. Peterson, J. Peterson, Pottorff, Powers, Ray, Ruff, Sloan, Stone, Storm, Tanner, Tomlinson, Wilk, D. Williams. Nays: Aday, Ballou, Barnes, Beggs, Boston, Burroughs, Compton, Cook, DeCastro, Dillmore, Edmonds, Faber, Feuerborn, Flaharty, Flora, Freeborn, Garner, Gatewood, Gilbert, MARCH 14, 2002 1715 Goering, Gordon, Grant, Hayzlett, Henderson, Henry, Holmes, Horst, Howell, Huebert, Humerickhouse, Hutchins, Huy, Johnson, Kauffman, Kirk, Klein, Kuether, Landwehr, Larkin, Levinson, Lightner, Lloyd, M. Long, P. Long, Mayans, Mays, McClure, McCreary, McKinney, McLeland, Merrick, Miller, Minor, Myers, Neufeld, Nichols, Novascone, Osborne, Ostmeyer, Palmer, Pauls, Phelps, L. Powell, T. Powell, Pyle, Reardon, Rehorn, Schwartz, Showalter, Shriver, Shultz, Swenson, Tafanelli, Thimesch, R. Toelkes, Toplikar, Vickrey, Weber, Wells, Welshimer, J. Williams, Wilson, Winn. Present but not voting: None. Absent or not voting: Krehbiel, Light, Loganbill, Mason, Jim Morrison, O’Brien, Sharp, Spangler. The motion of Rep. Newton did not prevail. Also, roll call was demanded on further motion of Rep. Newton to amend HB 2560, on page 1, by striking all in lines 17 through 43; On page 4, by striking all in line 11, after line 11, by inserting the following: ‘‘Section 1. On and after June 1, 2002, K.S.A. 2001 Supp. 41-501 is hereby amended to read as follows: 41-501. (a) As used in this section and K.S.A. 41-501a, and amendments thereto: (1) ‘‘Gallon’’ means wine gallon. (2) ‘‘Federal area’’ means any lands or premises which are located within the exterior boundaries of this state and which are held or acquired by or for the use of the United States or any department, establishment or agency of the United States. (3) ‘‘Malt product’’ means malt syrup, malt extract, liquid malt or wort. (b) (1) For the purpose of raising revenue a tax is imposed upon the manufacturing, using, selling, storing or purchasing alcoholic liquor, cereal malt beverage or malt products in this state or a federal area at a rate of $.18 $.23 per gallon on beer and cereal malt beverage; $.20 $.26 per gallon on all wort or liquid malt; $.10 $.13 per pound on all malt syrup or malt extract; $.30 $.40 per gallon on wine containing 14% or less alcohol by volume; $.75 $1.00 per gallon on wine containing more than 14% alcohol by volume; and $2.50 $3.25 per gallon on alcohol and spirits. (2) The tax imposed by this section shall be paid only once and shall be paid by the person in this state or federal area who first manufactures, uses, sells, stores, purchases or receives the alcoholic liquor or cereal malt beverage. The tax shall be collected and paid to the director as provided in this act. If the alcoholic liquor or cereal malt beverage is manufactured and sold in this state or a federal area, the tax shall be paid by the manufacturer, microbrewery or farm winery producing it. If the alcoholic liquor or cereal malt beverage is imported into this state by a distributor for the purpose of sale at wholesale in this state or a federal area, the tax shall be paid by the distributor, and in no event shall such tax be paid by the manufacturer unless the alcoholic liquor or cereal malt beverage is manufactured in this state. If not to exceed one gallon, or metric equivalent, per person of alcoholic liquor has been purchased by a private citizen outside the borders of the United States and is brought into this state by the private citizen in such person’s personal possession for such person’s own personal use and not for sale or resale, such import is lawful and no tax payment shall be due thereon. (c) Manufacturers, microbreweries, farm wineries or distributors at wholesale of alcoholic liquor or cereal malt beverage shall be exempt from the payment of the gallonage tax imposed on alcoholic liquor and cereal malt beverage, upon satisfactory proof, including bills of lading furnished to the director by affidavit or otherwise as the director requires, that the liquor or cereal malt beverage was manufactured in this state but was shipped out of the state for sale and consumption outside the state. (d) Wines manufactured or imported solely and exclusively for sacramental purposes and uses shall not be subject to the tax provided for by this section. (e) The tax provided for by this section is not imposed upon: (1) Any alcohol or wine, whether manufactured in or imported into this state, when sold to a nonbeverage user licensed by the state, for use in the manufacture of any of the following when they are unfit for beverage purposes: Patent and proprietary medicines and medicinal, antiseptic and toilet preparations; flavoring extracts and syrups and food products; scientific, 1716 JOURNAL OF THE HOUSE industrial and chemical products; or scientific, chemical, experimental or mechanical purposes; or (2) the privilege of engaging in any business of interstate commerce or otherwise, which business may not be made the subject of taxation by this state under the constitution and statutes of the United States. (f) The tax imposed by this section shall be in addition to all other taxes imposed by the state of Kansas or by any municipal corporation or political subdivision thereof. (g) Retail sales of alcoholic liquor, sales of beer to consumers by microbreweries and sales of wine to consumers by farm wineries shall not be subject to the tax imposed by the Kansas retailers’ sales tax act but shall be subject to the enforcement tax provided for in this act. (h) Notwithstanding any ordinance to the contrary, no city shall impose an occupation or privilege tax on the business of any person, firm or corporation licensed as a manufacturer, distributor, microbrewery, farm winery, retailer or nonbeverage user under this act and doing business within the boundaries of the city except as specifically authorized by K.S.A. 41-310, and amendments thereto. (i) The director shall collect the taxes imposed by this section and shall account for and remit all moneys collected from the tax to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury and the state treasurer shall credit 1⁄10 7.14% of the moneys collected from taxes imposed upon alcohol and spirits under subsection (b)(1) to the community alcoholism and intoxication programs fund created by K.S.A. 41-1126, and amendments thereto, and shall credit the balance of the moneys collected to the state general fund. (j) If any alcoholic liquor manufactured in or imported into this state is sold to a licensed manufacturer or distributor of this state to be used solely as an ingredient in the manufacture of any beverage for human consumption, the tax imposed upon the manufacturer or distributor shall be reduced by the amount of the taxes which have been paid under this section as to the alcoholic liquor so used. (k) The tax provided for by this section is not imposed upon alcohol or wine used by any school or college for scientific, chemical, experimental or mechanical purposes or by hospitals, sanitoria or other institutions caring for the sick. Any school, college, hospital, sanatorium or other institution caring for the sick may import alcohol or wine for scientific, chemical, experimental, mechanical or medicinal purposes by making application to the director for a permit to import it and receiving such a permit. Application for the permit shall be on a form prescribed and furnished by the director, and a separate permit shall be required for each purchase of alcohol or wine. A fee of $2 shall accompany each application. All permits shall be issued in triplicate to the applicant and shall be under the seal of the office of the director. Two copies of the permit shall be forwarded by the applicant to the microbrewery, farm winery, manufacturer or distributor from which the alcohol or wine is purchased, and the microbrewery, farm winery, manufacturer or distributor shall return to the office of the director one copy of the permit with its shipping affidavit and invoice. Within 10 days after receipt of any alcohol or wine, the school, college, hospital or sanatorium ordering it shall file a report in the office of the director upon forms furnished by the director, showing the amount of alcohol or wine received, the place where it is to be stored, from whom it was received, the purpose for which it is to be used and such other information as required by the director. Any school, college, hospital, sanatorium or institution caring for the sick, which complies with the provisions of this subsection, shall not be required to have any other license to purchase alcohol or wine from a microbrewery, farm winery, manufacturer or distributor. New Sec. 2. On June 1, 2002, a tax at the rate of $.05 per gallon on all beer and cereal malt beverage, $.10 per gallon for wine containing 14% or less of alcohol by volume, $.25 per gallon for wine containing more than 14% of alcohol by volume, $.75 per gallon on alcohol and spirits, $.06 per gallon on wort and liquid malt, and $.03 per pound of malt syrup and malt extract, is hereby imposed on the manufacture, use, sale, storage or purchase of such alcoholic liquors owned at 12:01 a.m. on June 1, 2002, by a licensed distributor or retail dealer as to which the tax has been imposed as provided in K.S.A. 41-501, and amend- MARCH 14, 2002 1717 ments thereto. Such tax shall be paid by the licensed distributor or retail dealer owning such alcoholic liquors, cereal malt beverage or beer at such time and date. On or before June 25, 2002, every such distributor and retail dealer shall make a report to the director on a form prescribed and furnished by the director showing the total number of gallons of such alcoholic liquors, cereal malt beverage or beer so owned at 12:01 a.m. on June 2, 2002, and such report shall be accompanied by a remittance of the tax due. The license of any licensed distributor or retail dealer who shall fail to make such report or pay such tax, within the time hereinbefore prescribed, shall be subject to suspension or revocation as provided by K.S.A. 41-320 and amendments thereto. All taxes collected by the director under this section shall be paid into the state treasury and the state treasurer shall credit the entire amount thereof to the state general fund. Sec. 3. On and after June 1, 2002, K.S.A. 2001 Supp. 41-501 is hereby repealed.’’; Also, on page 4, in line 13, by striking ‘‘statute book’’ and inserting ‘‘Kansas register’’; By renumbering existing section 3 as section 4; In the title, in line 12, by striking all after ‘‘of’’; by striking all in line 13; in line 14, by striking all before the period and inserting ‘‘alcoholic beverages; increasing the rate thereof; amending K.S.A. 2001 Supp. 41-501 and repealing the existing section’’; On roll call, the vote was: Yeas 31; Nays 87; Present but not voting: 1; Absent or not voting: 6. Yeas: Aurand, Benlon, Bethell, Campbell, Dahl, Dreher, Freeborn, Glasscock, Hermes, Horst, Hutchins, Lane, Lightner, P. Long, Loyd, Judy Morrison, Newton, O’Neal, Owens, Patterson, Pauls, E. Peterson, Powers, Ray, Shultz, Stone, Storm, Tanner, Tomlinson, Wilk, D. Williams. Nays: Aday, Ballou, Barnes, Beggs, Boston, Burroughs, Compton, Cook, Cox, Crow, DeCastro, Dillmore, DiVita, Edmonds, Faber, Feuerborn, Findley, Flaharty, Flora, Garner, Gatewood, Gilbert, Goering, Gordon, Hayzlett, Henderson, Henry, Holmes, Howell, Huebert, Huff, Humerickhouse, Huy, Johnson, Kauffman, Kirk, Klein, Kuether, Landwehr, Larkin, Levinson, Light, Lloyd, M. Long, Mason, Mayans, Mays, McClure, McCreary, McKinney, McLeland, Merrick, Miller, Minor, Jim Morrison, Myers, Neufeld, Nichols, Novascone, Osborne, Ostmeyer, Palmer, J. Peterson, Phelps, Pottorff, L. Powell, T. Powell, Pyle, Reardon, Rehorn, Ruff, Schwartz, Showalter, Shriver, Sloan, Swenson, Tafanelli, Thimesch, R. Toelkes, Toplikar, Vickrey, Weber, Wells, Welshimer, J. Williams, Wilson, Winn. Present but not voting: Grant. Absent or not voting: Ballard, Krehbiel, Loganbill, O’Brien, Sharp, Spangler. The motion of Rep. Newton did not prevail. Also, roll call was demanded on further motion of Rep. Newton to amend HB 2560, on page 1, by striking all in lines 17 through 43; On page 4, by striking all in line 11; after line 11, by inserting the following: ‘‘Section 1. On and after June 1, 2002, K.S.A. 79-4101 is hereby amended to read as follows: 79-4101. (a) For the purpose of providing revenue which may be used by the state, counties and cities in the enforcement of the provisions of this act, from and after the effective date of this act, for the privilege of engaging in the business of selling alcoholic liquor by retailers or farm wineries to consumers in this state or selling alcoholic liquor or cereal malt beverage by distributors to clubs, drinking establishments or caterers in this state, there is hereby levied and there shall be collected and paid a tax at the rate of 8% 10% upon the gross receipts received from: (1) The sale of alcoholic liquor by retailers, microbreweries or farm wineries to consumers within this state; and (2) the sale of alcoholic liquor or cereal malt beverage by distributors to clubs, drinking establishments or caterers in this state. (b) The tax imposed by this section shall be in addition to the license fee imposed on distributors, retailers, microbreweries and farm wineries by K.S.A. 41-310 and amendments thereto. Sec. 2. On and after June 1, 2002, K.S.A. 79-4101 is hereby repealed.’’; Also, on page 4, in line 13, by striking ‘‘statute book’’ and inserting ‘‘Kansas register’’; In the title, in line 12, by striking all after ‘‘of’’; by striking all in line 13; in line 14, by striking all before the period and inserting ‘‘certain sales of alcoholic liquors; increasing the rate thereof; amending K.S.A. 79-4101 and repealing the existing section’’; 1718 JOURNAL OF THE HOUSE On roll call, the vote was: Yeas 27; Nays 90; Present but not voting: 1; Absent or not voting: 7. Yeas: Ballard, Benlon, Bethell, Campbell, Dahl, Dreher, Freeborn, Glasscock, Horst, Hutchins, Lane, Lightner, Loyd, Newton, O’Neal, Owens, Patterson, Pauls, Powers, Ray, Sloan, Stone, Storm, Tanner, Tomlinson, Wilk, D. Williams. Nays: Aday, Aurand, Ballou, Barnes, Beggs, Boston, Burroughs, Compton, Cook, Cox, Crow, DeCastro, Dillmore, DiVita, Edmonds, Faber, Feuerborn, Findley, Flaharty, Flora, Garner, Gatewood, Gilbert, Goering, Gordon, Hayzlett, Henderson, Henry, Hermes, Holmes, Howell, Huebert, Huff, Humerickhouse, Huy, Johnson, Kauffman, Kirk, Klein, Kuether, Landwehr, Larkin, Levinson, Light, Lloyd, P. Long, Mason, Mayans, Mays, McClure, McCreary, McKinney, McLeland, Merrick, Miller, Minor, Jim Morrison, Judy Morrison, Myers, Neufeld, Nichols, Novascone, Osborne, Ostmeyer, Palmer, E. Peterson, J. Peterson, Phelps, Pottorff, L. Powell, T. Powell, Pyle, Reardon, Rehorn, Ruff, Schwartz, Showalter, Shriver, Shultz, Swenson, Tafanelli, Thimesch, R. Toelkes, Toplikar, Vickrey, Weber, Wells, Welshimer, J. Williams, Wilson. Present but not voting: Grant. Absent or not voting: Krehbiel, Loganbill, M. Long, O’Brien, Sharp, Spangler, Winn. The motion of Rep. Newton did not prevail. Also, roll call was demanded on further motion of Rep. Newton to amend HB 2560, on page 1, by striking all in line 17 through 43; On page 4, by striking all in line 11 and inserting the following: ‘‘Section 1. On and after June 1, 2002, K.S.A. 79-41a02 is hereby amended to read as follows: 79-41a02. (a) There is hereby imposed, for the privilege of selling alcoholic liquor, a tax at the rate of 10% 15% upon the gross receipts derived from the sale of alcoholic liquor by any club, caterer, drinking establishment or temporary permit holder. (b) The tax imposed by this section shall be paid by the consumer to the club, caterer, drinking establishment or temporary permit holder and it shall be the duty of each and every club, caterer, drinking establishment or temporary permit holder subject to this section to collect from the consumer the full amount of such tax, or an amount equal as nearly as possible or practicable to the average equivalent thereto. Each club, caterer, drinking establishment or temporary permit holder collecting the tax imposed hereunder shall be responsible for paying over the same to the state department of revenue in the manner prescribed by K.S.A. 79-41a03 and amendments thereto and the state department of revenue shall administer and enforce the collection of such tax. Sec. 2. On and after June 1, 2002, K.S.A. 2001 Supp. 79-41a03 is hereby amended to read as follows: 79-41a03. (a) The tax levied and collected pursuant to K.S.A. 79-41a02, and amendments thereto, shall become due and payable by the club, caterer, drinking establishment or temporary permit holder monthly, or on or before the 25th day of the month immediately succeeding the month in which it is collected, but any club, caterer, drinking establishment or temporary permit holder filing an annual or quarterly return under the Kansas retailers’ sales tax act, as prescribed in K.S.A. 79-3607, and amendments thereto, shall, upon such conditions as the secretary of revenue may prescribe, pay the tax required by this act on the same basis and at the same time the club, caterer, drinking establishment or temporary permit holder pays such retailers’ sales tax. Each club, caterer, drinking establishment or temporary permit holder shall make a true report to the department of revenue, on a form prescribed by the secretary of revenue, providing such information as may be necessary to determine the amounts to which any such tax shall apply for all gross receipts derived from the sale of alcoholic liquor by the club, caterer, drinking establishment or temporary permit holder for the applicable month or months, which report shall be accompanied by the tax disclosed thereby. Records of gross receipts derived from the sale of alcoholic liquor shall be kept separate and apart from the records of other retail sales made by a club, caterer, drinking establishment or temporary permit holder in order to facilitate the examination of books and records as provided herein. (b) The secretary of revenue or the secretary’s authorized representative shall have the right at all reasonable times during business hours to make such examination and inspection of the books and records of a club, caterer, drinking establishment or temporary permit holder as may be necessary to determine the accuracy of such reports required hereunder. MARCH 14, 2002 1719 (c) The secretary of revenue is hereby authorized to administer and collect the tax imposed hereunder and to adopt such rules and regulations as may be necessary for the efficient and effective administration and enforcement of the collection thereof. Whenever any club, caterer, drinking establishment or temporary permit holder liable to pay the tax imposed hereunder refuses or neglects to pay the same, the amount, including any penalty, shall be collected in the manner prescribed for the collection of the retailers’ sales tax by K.S.A. 79-3617, and amendments thereto. (d) The secretary of revenue shall remit all revenue collected under the provisions of this act to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury. Subject to the maintenance requirements of the local alcoholic liquor refund fund created under K.S.A. 79-41a09, and amendments thereto, 25% 50% of the remittance shall be credited to the state general fund, 5% 3.33% shall be credited to the community alcoholism and intoxication programs fund created by K.S.A. 411126, and amendments thereto, and the balance shall be credited to the local alcoholic liquor fund created by K.S.A. 79-41a04, and amendments thereto. (e) Whenever, in the judgment of the secretary of revenue, it is necessary, in order to secure the collection of any tax, penalties or interest due, or to become due, under the provisions of this act, the secretary may require any person subject to such tax to file a bond with the director of taxation under conditions established by and in such form and amount as prescribed by rules and regulations adopted by the secretary. (f) The amount of tax imposed by this act shall be assessed within three years after the return is filed, and no proceedings in court for the collection of such taxes shall be begun after the expiration of such period except in the cases of fraud. In the case of a false or fraudulent return with intent to evade tax, the tax may be assessed or a proceeding in court for collection of such tax may be begun at any time, within two years from the discovery of such fraud. No refund or credit shall be allowed by the director after three years from the date of payment of the tax as provided in this act unless before the expiration of such period a claim therefor is filed by the taxpayer, and no suit or action to recover on any claim for refund shall be commenced until after the expiration of six months from the date of filing a claim therefor with the director. Before the expiration of time prescribed in this section for the assessment of additional tax or the filing of a claim for refund, the director is hereby authorized to enter into an agreement in writing with the taxpayer consenting to the extension of the periods of limitations for the assessment of tax or for the filing of a claim for refund, at any time prior to the expiration of the periods of limitations. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. Sec. 3. On and after June 1, 2002, K.S.A. 79-41a02 and K.S.A. 2001 Supp. 79-41a03 are hereby repealed.’’; Also, on page 4, in line 13, by striking ‘‘statute book’’ and inserting ‘‘Kansas register’’; By renumbering existing section 3 as section 4; In the title, in line 12, by striking all after ‘‘of’’; by striking all in lines 13 and 14 and inserting ‘‘liquor by the drink; increasing the rate thereof; amending K.S.A. 79-41a02 and K.S.A. 2001 Supp. 79-41a03 and repealing the existing sections.’’; On roll call, the vote was: Yeas 28; Nays 87; Present but not voting: 1; Absent or not voting: 9. Yeas: Benlon, Bethell, Campbell, Dahl, Dillmore, Dreher, Feuerborn, Glasscock, Horst, Hutchins, Lane, Lightner, Loyd, Judy Morrison, Newton, O’Neal, Owens, Patterson, Pauls, Powers, Ray, Sloan, Stone, Storm, Tanner, Tomlinson, Wilk, D. Williams. Nays: Aday, Aurand, Ballou, Barnes, Beggs, Boston, Compton, Cook, Cox, Crow, DeCastro, DiVita, Edmonds, Faber, Findley, Flaharty, Flora, Freeborn, Garner, Gatewood, Gilbert, Goering, Gordon, Hayzlett, Henderson, Henry, Hermes, Holmes, Howell, Huebert, Huff, Humerickhouse, Huy, Johnson, Kauffman, Kirk, Klein, Kuether, Landwehr, Larkin, Levinson, Lloyd, M. Long, P. Long, Mason, Mayans, Mays, McClure, McCreary, McKinney, McLeland, Merrick, Miller, Minor, Jim Morrison, Myers, Neufeld, Nichols, Novascone, Osborne, Ostmeyer, Palmer, J. Peterson, Phelps, Pottorff, L. Powell, T. Powell, 1720 JOURNAL OF THE HOUSE Pyle, Reardon, Rehorn, Ruff, Schwartz, Showalter, Shriver, Shultz, Swenson, Tafanelli, Thimesch, R. Toelkes, Toplikar, Vickrey, Weber, Wells, Welshimer, J. Williams, Wilson, Winn. Present but not voting: Grant. Absent or not voting: Ballard, Burroughs, Krehbiel, Light, Loganbill, O’Brien, E. Peterson, Sharp, Spangler. The motion of Rep. Newton did not prevail. Also, on motion to recommend HB 2560 favorably for passage, the motion did not prevail. Committee report to HB 2681 be adopted; and the bill be passed as amended. Pursuant to House Rule 1903, HB 2764 be passed over and retain a place on the calendar. Committee report to HB 2612 be adopted; also, on motion of Rep. McKinney be amended, on page 1, following line 14, by inserting new material to read as follows: ‘‘New Section 1. (a) In any calendar year in which the sum of the amount by which the actual amount of state general fund receipts for the fiscal year ending in such calendar year exceeds the original joint estimate of revenue to the state general fund for that fiscal year prepared pursuant to K.S.A. 75-6701, and amendments thereto, as adjusted for laws enacted by the legislature during the regular legislative session in such calendar year, by more than $50,000,000, 20% of such amount shall be transferred from the state general fund to the state debt reduction fund established by section 2, and amendments thereto, and 40% of such amount shall be transferred from the state general fund to the Kansas tax rebate fund established by section 3, and amendments thereto. (b) On or before July 1 of each calendar year, the director of the budget and the director of the legislative research department shall prepare a joint estimate of the amount, if any, by which the actual amount of state general fund receipts for the state fiscal year ending in such calendar year exceeds the original joint estimate of revenue to the state general fund for that state fiscal year pursuant to K.S.A. 75-6701 and amendments thereto, adjusted for laws enacted by the legislature during the regular legislative session in such calendar year, by more than $50,000,000 and, if such revenues exceed such estimate by more than $50,000,000, shall prepare a joint certification to the director of accounts and reports of the amount to be trans