Bill Summary – FastDemocracy

Session of 2024
                              HOUSE BILL No. 2003
      By Representatives Proctor, Buehler, Butler, Collins, Ellis, Johnson, Neelly, Turk
                                      and Underhill
                                            6-18

 AN ACT concerning taxation; relating to income tax; establishing the
   veterans' valor property tax relief act and providing for an income tax
   credit or refund for eligible individuals; modifying the definition of
   household income and increasing the appraised value threshold for
   eligibility of seniors and disabled veterans related to increased property
   tax claims and citing the section as the homeowners' property tax freeze
   program; relating to property tax; providing exemptions for certain
   personal property including watercraft, marine equipment, off-road
   vehicles, motorized bicycles and certain trailers; excluding internal
   revenue code section 1031 exchange transactions as indicators of fair
   market value; providing for certain exclusions from the prohibition of
   paying taxes under protest after a valuation notice appeal; providing
   four prior years' values on the annual valuation notice; amending
   K.S.A. 79-213, 79-503a and 79-5501 and K.S.A. 2023 Supp. 79-1460,
   79-2005 and 79-4508a and repealing the existing sections.
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 Be it enacted by the Legislature of the State of Kansas:
     New Section 1. (a) This act shall be known and may be cited as the
 veterans' valor property tax relief act.
     (b) There shall be allowed as a credit against the tax liability of a
 taxpayer imposed under the Kansas income tax act for tax year 2024, and
 all tax years thereafter, in an amount equal to 75% of the amount of
 property and ad valorem taxes actually and timely paid by a taxpayer who
 has been deemed to be totally disabled, permanently and totally disabled,
 or unemployable pursuant to 38 C.F.R. § 3.340 if such taxes were paid
 upon real or personal property used for residential purposes of such
 taxpayer that is the taxpayer's principal place of residence for the tax year
 in which the tax credit is claimed.
     (c) The amount of any such credit for any such taxpayer shall not
 exceed the amount of property and ad valorem taxes paid by such taxpayer
 as specified in this section. A taxpayer shall not take the credit pursuant to
 this section if such taxpayer has received a homestead property tax refund
 pursuant to K.S.A. 79-4501 et seq., and amendments thereto, or a credit
 pursuant to the selective assistance for effective senior relief pursuant to
 K.S.A. 79-32,263, and amendments thereto, for such property for such tax
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 year.
     (d) Subject to the provisions of this section, if the amount of such tax
 credit exceeds the taxpayer's income tax liability for the taxable year, the
 amount of such excess credit that exceeds such tax liability shall be
 refunded to the taxpayer.
     (e) The secretary of revenue shall adopt rules and regulations
 regarding the filing of documents that support the amount of the credit
 claimed pursuant to this section.
     (f) The provisions of this act shall be a part of and supplemental to
 the homestead property tax refund act, except that the income or appraised
 valuation limits set forth in the homestead property tax refund act shall not
 apply to this section.
     New Sec. 2. (a) The following described property, to the extent herein
 specified, is hereby exempt from all property or ad valorem taxes levied
 under the laws of the state of Kansas:
     (1) Any off-road vehicle that is not operated upon any highway;
     (2) any motorized bicycle, electric-assisted bicycle, electric-assisted
 scooter, electric personal assistive mobility device and motorized
 wheelchair as such terms are defined in K.S.A. 8-126, and amendments
 thereto;
     (3) any trailer having a gross weight of 15,000 pounds or less that is
 used exclusively for personal use and not for the production of income;
 and
     (4) any marine equipment.
     (b) For purposes of this section:
     (1) "Marine equipment" means any watercraft trailer designed to
 launch, retrieve, transport and store watercraft and any watercraft motor
 designed to operate watercraft on the water;
     (2) "off-road motorcycle" means any motorcycle as defined in K.S.A.
 8-126, and amendments thereto, that has been manufactured for off-road
 use only and is used exclusively off roads and highways; and
     (3) "off-road vehicle" means:
     (A) Any all-terrain vehicle, recreational off-highway vehicle and golf
 cart as such terms are defined in K.S.A. 8-126, and amendments thereto;
 and
     (B) any off-road motorcycle and snowmobile.
     (c) The provisions of this section shall apply to all taxable years
 commencing after December 31, 2024.
     Sec. 3. K.S.A. 79-213 is hereby amended to read as follows: 79-213.
 (a) Any property owner requesting an exemption from the payment of ad
 valorem property taxes assessed, or to be assessed, against their property
 shall be required to file an initial request for exemption, on forms
 approved by the state board of tax appeals and provided by the county
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 appraiser.
     (b) The initial exemption request shall identify the property for which
 the exemption is requested and state, in detail, the legal and factual basis
 for the exemption claimed.
     (c) The request for exemption shall be filed with the county appraiser
 of the county where such property is principally located.
     (d) After a review of the exemption request, and after a preliminary
 examination of the facts as alleged, the county appraiser shall recommend
 that the exemption request either be granted or denied, and, if necessary,
 that a hearing be held. If a denial is recommended, a statement of the
 controlling facts and law relied upon shall be included on the form.
     (e) The county appraiser, after making such written recommendation,
 shall file the request for exemption and the recommendations of the county
 appraiser with the state board of tax appeals. With regard to a request for
 exemption from property tax pursuant to the provisions of K.S.A. 79-201g
 and 82a-409, and amendments thereto, not filed with the board of tax
 appeals by the county appraiser on or before the effective date of this act,
 if the county appraiser recommends the exemption request be granted, the
 exemption shall be provided in the amount recommended by the county
 appraiser and the county appraiser shall not file the request for exemption
 and recommendations of the county appraiser with the state board of tax
 appeals. The county clerk or county assessor shall annually make such
 adjustment in the taxes levied against the real property as the owner may
 be entitled to receive under the provisions of K.S.A. 79-201g, and
 amendments thereto, as recommended by the county appraiser, beginning
 with the first period, following the date of issue of the certificate of
 completion on which taxes are regularly levied, and during the years
 which the landowner is entitled to such adjustment.
     (f) Upon receipt of the request for exemption, the board shall docket
 the same and notify the applicant and the county appraiser of such fact.
     (g) After examination of the request for exemption and the county
 appraiser's recommendation related thereto, the board may fix a time and
 place for hearing, and shall notify the applicant and the county appraiser of
 the time and place so fixed. A request for exemption pursuant to: (1)
 Section 13 of article 11 of the constitution of the state of Kansas; or (2)
 K.S.A. 79-201a Second, and amendments thereto, for property constructed
 or purchased, in whole or in part, with the proceeds of revenue bonds
 under the authority of K.S.A. 12-1740 through 12-1749, and amendments
 thereto, prepared in accordance with instructions and assistance which
 shall be provided by the department of commerce, shall be deemed
 approved unless scheduled for hearing within 30 days after the date of
 receipt of all required information and data relating to the request for
 exemption, and such hearing shall be conducted within 90 days after such
     HB 2003                             4
 date. Such time periods shall be determined without regard to any
 extension or continuance allowed to either party to such request. In any
 case where a party to such request for exemption requests a hearing
 thereon, the same shall be granted. Hearings shall be conducted in
 accordance with the provisions of the Kansas administrative procedure act.
 In all instances where the board sets a request for exemption for hearing,
 the county shall be represented by its county attorney or county counselor.
     (h) Except as otherwise provided by subsection (g), in the event of a
 hearing, the same shall be originally set not later than 90 days after the
 filing of the request for exemption with the board.
     (i) During the pendency of a request for exemption, no person, firm,
 unincorporated association, company or corporation charged with real
 estate or personal property taxes pursuant to K.S.A. 79-2004 and 79-
 2004a, and amendments thereto, on the tax books in the hands of the
 county treasurer shall be required to pay the tax from the date the request
 is filed with the county appraiser until the expiration of 30 days after the
 board issued its order thereon and the same becomes a final order. In the
 event that taxes have been assessed against the subject property, no interest
 shall accrue on any unpaid tax for the year or years in question nor shall
 the unpaid tax be considered delinquent from the date the request is filed
 with the county appraiser until the expiration of 30 days after the board
 issued its order thereon. In the event the board determines an application
 for exemption is without merit and filed in bad faith to delay the due date
 of the tax, the tax shall be considered delinquent as of the date the tax
 would have been due pursuant to K.S.A. 79-2004 and 79-2004a, and
 amendments thereto, and interest shall accrue as prescribed therein.
     (j) In the event the board grants the initial request for exemption, the
 same shall be effective beginning with the date of first exempt use except
 that, with respect to property the construction of which commenced not to
 exceed 24 months prior to the date of first exempt use, the same shall be
 effective beginning with the date of commencement of construction.
     (k) In conjunction with its authority to grant exemptions, the board
 shall have the authority to abate all unpaid taxes that have accrued from
 and since the effective date of the exemption. In the event that taxes have
 been paid during the period where the subject property has been
 determined to be exempt, the board shall have the authority to order a
 refund of taxes for the year immediately preceding the year in which the
 exemption application is filed in accordance with subsection (a).
     (l) The provisions of this section shall not apply to: (1) Farm
 machinery and equipment exempted from ad valorem taxation by K.S.A.
 79-201j, and amendments thereto; (2) personal property exempted from ad
 valorem taxation by K.S.A. 79-215, and amendments thereto; (3) wearing
 apparel, household goods and personal effects exempted from ad valorem
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 taxation by K.S.A. 79-201c, and amendments thereto; (4) livestock; (5) all
 property exempted from ad valorem taxation by K.S.A. 79-201d, and
 amendments thereto; (6) merchants' and manufacturers' inventories
 exempted from ad valorem taxation by K.S.A. 79-201m, and amendments
 thereto; (7) grain exempted from ad valorem taxation by K.S.A. 79-201n,
 and amendments thereto; (8) property exempted from ad valorem taxation
 by K.S.A. 79-201a Seventeenth, and amendments thereto, including all
 property previously acquired by the secretary of transportation or a
 predecessor in interest, which is used in the administration, construction,
 maintenance or operation of the state system of highways. The secretary of
 transportation shall at the time of acquisition of property notify the county
 appraiser in the county in which the property is located that the acquisition
 occurred and provide a legal description of the property acquired; (9)
 property exempted from ad valorem taxation by K.S.A. 79-201a Ninth,
 and amendments thereto, including all property previously acquired by the
 Kansas turnpike authority which is used in the administration,
 construction, maintenance or operation of the Kansas turnpike. The Kansas
 turnpike authority shall at the time of acquisition of property notify the
 county appraiser in the county in which the property is located that the
 acquisition occurred and provide a legal description of the property
 acquired; (10) aquaculture machinery and equipment exempted from ad
 valorem taxation by K.S.A. 79-201j, and amendments thereto. As used in
 this section, "aquaculture" has the same meaning ascribed thereto by
 K.S.A. 47-1901, and amendments thereto; (11) Christmas tree machinery
 and equipment exempted from ad valorem taxation by K.S.A. 79-201j, and
 amendments thereto; (12) property used exclusively by the state or any
 municipality or political subdivision of the state for right-of-way purposes.
 The state agency or the governing body of the municipality or political
 subdivision shall at the time of acquisition of property for right-of-way
 purposes notify the county appraiser in the county in which the property is
 located that the acquisition occurred and provide a legal description of the
 property acquired; (13) machinery, equipment, materials and supplies
 exempted from ad valorem taxation by K.S.A. 79-201w, and amendments
 thereto; (14) vehicles owned by the state or by any political or taxing
 subdivision thereof and used exclusively for governmental purposes; (15)
 property used for residential purposes which is exempted pursuant to
 K.S.A. 79-201x, and amendments thereto, from the property tax levied
 pursuant to K.S.A. 72-5142, and amendments thereto; (16) from and after
 July 1, 1998, vehicles which are owned by an organization having as one
 of its purposes the assistance by the provision of transit services to the
 elderly and to disabled persons and which are exempted pursuant to
 K.S.A. 79-201 Ninth, and amendments thereto; (17) from and after July 1,
 1998, motor vehicles exempted from taxation by K.S.A. 79-5107(e), and
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 amendments thereto; (18) commercial and industrial machinery and
 equipment exempted from property or ad valorem taxation by K.S.A. 79-
 223, and amendments thereto; (19) telecommunications machinery and
 equipment and railroad machinery and equipment exempted from property
 or ad valorem taxation by K.S.A. 79-224, and amendments thereto; (20)
 property exempted from property or ad valorem taxation by K.S.A. 79-
 234, and amendments thereto; (21) recreational vehicles exempted from
 property or ad valorem taxation by K.S.A. 79-5121(e), and amendments
 thereto; (22) property acquired by a land bank exempt from property or ad
 valorem taxation pursuant to K.S.A. 12-5909 or K.S.A. 19-26,111, and
 amendments thereto; and (23) property belonging exclusively to the
 United States and exempted from ad valorem taxation by K.S.A. 79-201a
 First, and amendments thereto, except that the provisions of this
 subsection (l)(23) shall not apply to any such property that the congress of
 the United States has expressly declared to be subject to state and local
 taxation; (24) watercraft exempted from property or ad valorem taxation
 by K.S.A. 79-5501, and amendments thereto; and (25) property exempted
 from property or ad valorem taxation by section 2, and amendments
 thereto.
     (m) The provisions of this section shall apply to property exempt
 pursuant to the provisions of section 13 of article 11 of the constitution of
 the state of Kansas.
     (n) The provisions of subsection (k) as amended by this act shall be
 applicable to all exemption applications filed in accordance with
 subsection (a) after December 31, 2001.
     (o) No exemption authorized by K.S.A. 79-227, and amendments
 thereto, of property from the payment of ad valorem property taxes
 assessed shall be granted unless the requesting property owner files an
 initial request for exemption pursuant to this section within two years of
 the date in which construction of a new qualifying pipeline property
 began. The provisions of this subsection shall be applicable to all requests
 for exemptions filed in accordance with subsection (a) after June 30, 2017.
     Sec. 4. K.S.A. 79-503a is hereby amended to read as follows: 79-
 503a. "Fair market value" means the amount in terms of money that a well
 informed buyer is justified in paying and a well informed seller is justified
 in accepting for property in an open and competitive market, assuming that
 the parties are acting without undue compulsion. In the determination of
 fair market value of any real property which is subject to any special
 assessment, such value shall not be determined by adding the present value
 of the special assessment to the sales price. For the purposes of this
 definition it will be assumed that consummation of a sale occurs as of
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