SESSION OF 2024
SUPPLEMENTAL NOTE ON SENATE BILL NO. 311
As Amended by Senate Committee on
Assessment and Taxation

Brief*
SB 311, as amended, would prohibit the sale price at
which a property sells in an Internal Revenue Code Section
1031 exchange (1031 exchange), build-to-suit transaction, or
a sale/leaseback arrangement from being considered an
indicator of fair market value or used in arriving at fair market
value for property tax purposes. The bill would exclude such
exchanges, transactions, and arrangements from being
considered valid sales for purposes of the sales ratio study
used for measuring tax appraisal accuracy.
[Note: A 1031 exchange allows a person to postpone
paying tax on the gain the person receives from selling a
property if they reinvest the proceeds in similar property as
part of a qualifying like-kind exchange.]

Background
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Tyson.

Senate Committee on Assessment and Taxation
In the Senate Committee hearing on March 23, 2023,
proponent testimony was provided by a private citizen, who
generally stated the federal income tax consequences of the

____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
sale and lease terms of a property result in the sale price not
reflecting fair market value of the property.
The Secretary of Revenue responded to questions
concerning 1031 exchanges.
No other testimony was provided.
On January 9, 2024, the bill was withdrawn from the
Senate Calendar and re-referred to the Senate Committee on
Assessment and Taxation.
Following discussion on March 13, 2024, the Senate
Committee amended the bill to include build-to-suit
transactions and sale/leaseback arrangements.

Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Department of
Revenue indicates the bill would have no fiscal effect. Any
fiscal effect associated with the bill is not reflected in The FY
2025 Governor’s Budget Report.
The Kansas Association of Counties indicates the bill
could reduce assessed valuation of properties by an
indeterminate amount.
Taxation; property tax; 1031 exchanges; build-to-suit


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Statutes affected:
As introduced: 79-503a, 79-1485
As Amended by Senate Committee: 79-503a, 79-1485