Special Session of 2024
SENATE BILL No. 2
By Senators Holland and Francisco
6-18

1 AN ACT concerning taxation; relating to income taxation; eliminating the
2 income limit to qualify for the subtraction modification exempting
3 social security benefits; increasing the tax credit amount for household
4 and dependent care expenses; establishing the veterans' valor property
5 tax relief act; providing for an income tax credit or refund for eligible
6 individuals; citing the increased property tax homestead refund claim
7 section as the homeowners' property tax freeze program; relating to
8 privilege tax; decreasing the normal tax rate; relating to property tax;
9 increasing the extent of exemption for residential property from the
10 statewide school levy; decreasing the rate of ad valorem tax imposed by
11 a school district; providing for certain transfers to the state school
12 district finance fund; relating to sales and compensating use tax;
13 reducing the state rate of tax on sales of food and food ingredients;
14 modifying the percent credited to the state highway fund from revenue
15 collected; amending K.S.A. 79-5a27, 79-1107, 79-1108 and 79-32,111c
16 and K.S.A. 2023 Supp. 72-5142, 79-201x, 79-2988, as amended by
17 section 15 of 2024 Senate Bill No. 410, 79-32,117, as amended by
18 section 14 of 2023 Senate Bill No. 27, 79-3603, 79-3603d, 79-3620,
19 79-3703, 79-3710 and 79-4508a and repealing the existing sections.
20
21 Be it enacted by the Legislature of the State of Kansas:
22 New Section 1. (a) This act shall be known and may be cited as the
23 veterans' valor property tax relief act.
24 (b) There shall be allowed as a credit against the tax liability of a
25 taxpayer imposed under the Kansas income tax act for tax year 2024, and
26 all tax years thereafter, in an amount equal to 75% of the amount of
27 property and ad valorem taxes actually and timely paid by a taxpayer who
28 has been deemed to be permanently and totally disabled or unemployable
29 pursuant to 38 C.F.R. § 3.340 if such taxes were paid upon real or personal
30 property used for residential purposes of such taxpayer that is the
31 taxpayer's principal place of residence for the tax year in which the tax
32 credit is claimed.
33 (c) The amount of any such credit for any such taxpayer shall not
34 exceed the amount of property and ad valorem taxes paid by such taxpayer
35 as specified in this section. A taxpayer shall not take the credit pursuant to
36 this section if such taxpayer has received a homestead property tax refund
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1 pursuant to K.S.A. 79-4501 et seq., and amendments thereto, or a credit
2 pursuant to the selective assistance for effective senior relief pursuant to
3 K.S.A. 79-32,263, and amendments thereto, for such property for such tax
4 year.
5 (d) Subject to the provisions of this section, if the amount of such tax
6 credit exceeds the taxpayer's income tax liability for the taxable year, the
7 amount of such excess credit that exceeds such tax liability shall be
8 refunded to the taxpayer.
9 (e) The secretary of revenue shall adopt rules and regulations
10 regarding the filing of documents that support the amount of the credit
11 claimed pursuant to this section.
12 (f) The provisions of this act shall be a part of and supplemental to
13 the homestead property tax refund act, except that the income or appraised
14 valuation limits set forth in the homestead property tax refund act shall not
15 apply to this section.
16 New Sec. 2. On August 15, 2024, and each August 15 thereafter, the
17 director of the budget, in consultation with the director of property
18 valuation, shall certify to the director of accounts and reports if the tax
19 levied pursuant to K.S.A. 72-5142, and amendments thereto, is decreased
20 from 20 mills or the exemption provided by K.S.A. 79-201x, and
21 amendments thereto, is increased from $42,049 for any tax year. The
22 director of the budget shall certify to the director of accounts and reports
23 and shall transfer a copy of such certification to the director of legislative
24 research, the amount of revenue that the decrease in property tax would
25 have generated for the tax year if such tax was levied pursuant to K.S.A.
26 72-5142, and amendments thereto, at the rate of 20 mills and the difference
27 in the amount of revenue that the increase in the exemption provided by
28 K.S.A. 79-201x, and amendments thereto, would have generated for the
29 tax year if the exemption amount was $42,049. Upon receipt of such
30 certification, or as soon thereafter as moneys are available, the director of
31 accounts and reports shall transfer such certified amount from the state
32 general fund to the state school district finance fund of the department of
33 education.
34 Sec. 3. K.S.A. 2023 Supp. 72-5142 is hereby amended to read as
35 follows: 72-5142. (a) The board of education of each school district shall
36 levy an ad valorem tax upon the taxable tangible property of the school
37 district in the school years specified in subsection (b) for the purpose of:
38 (1) Financing that portion of the school district's general fund budget
39 that is not financed from any other source provided by law;
40 (2) paying a portion of the costs of operating and maintaining public
41 schools in partial fulfillment of the constitutional obligation of the
42 legislature to finance the educational interests of the state; and
43 (3) with respect to any redevelopment school district established prior
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1 to July 1, 1997, pursuant to K.S.A. 12-1771, and amendments thereto,
2 paying a portion of the principal and interest on bonds issued by cities
3 under authority of K.S.A. 12-1774, and amendments thereto, for the
4 financing of redevelopment projects upon property located within the
5 school district.
6 (b) The tax required under subsection (a) shall be levied at a rate of
7 20 18 mills in the school years 2023-2024 and 2024-2025 and 2025-2026.
8 (c) The proceeds from the tax levied by a district under authority of
9 this section, except the proceeds of such tax levied for the purpose
10 described in subsection (a)(3), shall be remitted to the state treasurer in
11 accordance with the provisions of K.S.A. 75-4215, and amendments
12 thereto. Upon receipt of each such remittance, the state treasurer shall
13 deposit the entire amount in the state treasury to the credit of the state
14 school district finance fund.
15 (d) No school district shall proceed under K.S.A. 79-1964, 79-1964a
16 or 79-1964b, and amendments thereto.
17 Sec. 4. K.S.A. 2023 Supp. 79-201x is hereby amended to read as
18 follows: 79-201x. (a) For taxable year 2022 2024, and all taxable years
19 thereafter, the following described property, to the extent herein specified,
20 shall be and is hereby exempt from the property tax levied pursuant to the
21 provisions of K.S.A. 72-5142, and amendments thereto: Property used for
22 residential purposes to the extent of $40,000 $125,000 of its appraised
23 valuation.
24 (b) For taxable year 2023, and all taxable years thereafter, the dollar
25 amount of the extent of appraised valuation that is exempt pursuant to
26 subsection (a) shall be adjusted to reflect the average percentage change in
27 statewide residential valuation of all residential real property for the
28 preceding 10 years. Such average percentage change shall not be less than
29 zero. The director of property valuation shall calculate the average
30 percentage change for purposes of this annual adjustment and calculate the
31 dollar amount of the extent of appraised valuation that is exempt pursuant
32 to this section each year.
33 Sec. 5. K.S.A. 79-5a27 is hereby amended to read as follows: 79-
34 5a27. On or before June 1 each year, the director of property valuation
35 shall certify to the county clerk of each county the amount of assessed
36 valuation apportioned to each taxing unit therein for properties valued and
37 assessed under K.S.A. 79-5a01 et seq., and amendments thereto. The
38 county clerk shall include such assessed valuations in the applicable taxing
39 districts with all other assessed valuations in those taxing districts and on
40 or before June 15 notify the appropriate officials of each taxing district
41 within the county of the assessed valuation estimates to be utilized in the
42 preparation of budgets for ad valorem tax purposes, except that for tax
43 year 2024, the deadline shall be extended to July 1, 2024. If in any year
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1 the county clerk has not received the applicable valuations from the
2 director of property valuation, the county clerk shall use the applicable
3 assessed valuations of the preceding year as an estimate for such
4 notification. If the public utility has filed an application for exemption of
5 all or a portion of its property, the director shall notify the county clerk that
6 the exemption application has been filed and the county clerk shall not be
7 required to include such assessed valuation in the applicable taxing
8 districts until such time as the application is denied by the state board of
9 tax appeals or, if judicial review of the board's order is sought, until such
10 time as judicial review is finalized.
11 Sec. 6. K.S.A. 79-1107 is hereby amended to read as follows: 79-
12 1107. (a) Every national banking association and state bank located or
13 doing business within the state shall pay to the state for the privilege of
14 doing business within the state a tax according to or measured by its net
15 income for the next preceding taxable year to be computed as provided in
16 this act. Such tax shall consist of a normal tax and a surtax and shall be
17 computed as follows:
18 (a)(1) For tax year 2024, and all tax years thereafter, the normal tax
19 shall be an amount equal to 2 1/4% 1.94% of such net income; and
20 (b)(2) the surtax shall be an amount equal to 2 1/8% 2.125% of such
21 net income in excess of $25,000.
22 (b) The tax levied shall be in lieu of ad valorem taxes which might
23 otherwise be imposed by the state or political subdivisions thereof upon
24 shares of capital stock or the intangible assets of national banking
25 associations and state banks.
26 Sec. 7. K.S.A. 79-1108 is hereby amended to read as follows: 79-
27 1108. (a) Every trust company and savings and loan association located or
28 doing business within the state shall pay to the state for the privilege of
29 doing business within the state a tax according to or measured by its net
30 income for the next preceding taxable year to be computed as provided in
31 this act. Such tax shall consist of a normal tax and a surtax and shall be
32 computed as follows:
33 (a)(1) For tax year 2024, and all tax years thereafter, the normal tax
34 on every trust company and savings and loan association shall be an
35 amount equal to 2 1/4% 1.93% of such net income; and
36 (b)(2) the surtax on every trust company and savings and loan
37 association shall be an amount equal to 2 1/4% 2.25% of such net income in
38 excess of $25,000.
39 (b) The tax levied shall be in lieu of ad valorem taxes which might
40 otherwise be imposed by the state or political subdivision thereof upon
41 shares of capital stock or other intangible assets of trust companies and
42 savings and loan associations.
43 Sec. 8. K.S.A. 2023 Supp. 79-2988, as amended by section 15 of
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1 2024 Senate Bill No. 410, is hereby amended to read as follows: 79-2988.
2 (a) On or before June 15 each year, the county clerk shall calculate the
3 revenue neutral rate for each taxing subdivision and include such revenue
4 neutral rate on the notice of the estimated assessed valuation provided to
5 each taxing subdivision for budget purposes, except that for tax year 2024,
6 the deadline shall be extended to July 1, 2024. The director of accounts
7 and reports shall modify the prescribed budget information form to show
8 the revenue neutral rate.
9 (b) Except as otherwise provided in this section, no tax rate in excess
10 of the revenue neutral rate shall be levied by the governing body of any
11 taxing subdivision unless a resolution or ordinance has been approved by
12 the governing body according to the following procedure:
13 (1) At least 10 days in advance of the public hearing, the governing
14 body shall publish notice of its proposed intent to exceed the revenue
15 neutral rate by publishing notice:
16 (A) On the website of the governing body, if the governing body
17 maintains a website; and
18 (B) in a weekly or daily newspaper of the county having a general
19 circulation therein. The notice shall include, but not be limited to, its
20 proposed tax rate, its revenue neutral rate and the date, time and location
21 of the public hearing.
22 (2) On or before July 20, the governing body shall notify the county
23 clerk of its proposed intent to exceed the revenue neutral rate and provide
24 the date, time and location of the public hearing and its proposed tax rate.
25 For all tax years commencing after December 31, 2021, the county clerk
26 shall notify each taxpayer with property in the taxing subdivision, by mail
27 directed to the taxpayer's last known address, of the proposed intent to
28 exceed the revenue neutral rate at least 10 days in advance of the public
29 hearing. Alternatively, the county clerk may transmit the notice to the
30 taxpayer by electronic means at least 10 days in advance of the public
31 hearing, if such taxpayer and county clerk have consented in writing to
32 service by electronic means. The county clerk is not required to send a
33 notice to a property owner of property that is exempt from ad valorem
34 taxation. The county clerk shall consolidate the required information for
35 all taxing subdivisions relevant to the taxpayer's property on one notice.
36 The notice shall be in a format prescribed by the director of accounts and
37 reports. The notice shall include, but not be limited to:
38 (A) The following heading:
39 "NOTICE OF PROPOSED PROPERTY TAX INCREASE AND
40 PUBLIC HEARINGS
41 [Current year] [County name] County Revenue Neutral Rate Notice
42 This is NOT a bill. Do not remit payment.";
43 (B) the following statement:
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1 "This notice contains estimates of the tax on your property and
2 proposed property tax increases. THE ACTUAL TAX ON YOUR
3 PROPERTY MAY INCREASE OR DECREASE FROM THESE
4 ESTIMATES. Governing bodies of taxing subdivisions must vote in order
5 to exceed the Revenue Neutral Rate to increase the total property taxes
6 collected. Governing bodies will vote at public hearings at the dates, times
7 and locations listed. Taxpayers may attend and comment at the hearings.
8 Property tax statements will be issued after mill rates are finalized and
9 taxes are calculated.";
10 (C) the appraised value and assessed value of the taxpayer's property
11 for the current year and the previous year;
12 (D) the amount of property tax of each taxing subdivision on the
13 taxpayer's property from the previous year's tax statement in a column
14 titled: "[Previous year] Tax";
15 (E) the estimated amount of property tax for the current year of each
16 taxing subdivision on the taxpayer's property based on the revenue neutral
17 rate of each taxing subdivision in a column titled: "[Current year] Tax at
18 Revenue Neutral Rate";
19 (F) the estimated amount of property tax for the current year of each
20 taxing subdivision on the taxpayer's property based on either: (i) The
21 revenue neutral rate for a taxing subdivision that does not intend to exceed
22 its revenue neutral rate; or (ii) the proposed tax rate provided by the taxing
23 subdivision, if the taxing subdivision notified the county clerk of its
24 proposed intent to exceed its revenue neutral rate in a column titled:
25 "[Current year] Maximum Tax";
26 (G) the difference between the amount of the current year's maximum
27 tax and the previous year's tax, reflected in dollars and a percentage, for
28 each taxing subdivision in a column titled: "[Current year] Maximum Tax
29 Exceeding [Previous year] Tax";
30 (H) the date, time and location of the public hearing of each taxing
31 subdivision that notified the county clerk of its proposed intent to exceed
32 its revenue neutral rate in a column titled: "Date, Time and Location of
33 Public Hearing"; and
34 (I) for each taxing subdivision public hearing listed pursuant to
35 subparagraph (H), the difference between the current year's maximum tax
36 and the estimated amount of property tax based on the revenue neutral rate
37 of such taxing subdivision in a column titled: "[Current year] Maximum
38 Tax Exceeding Tax at Revenue Neutral Rate".
39 Although the state of Kansas is not a taxing subdivision for purposes of
40 this section, the notice shall include the previous year's tax amount and the
41 estimate of the tax for the current year on the taxpayer's property based on
42 the statutory mill levies.
43 (3) The public hearing to consider exceeding the revenue neutral rate
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1 shall be held not sooner than August 20 and not later than September 20.
2 The governing body shall provide interested taxpayers desiring to be heard
3 an opportunity to present oral testimony within reasonable time limits and
4 without unreasonable restriction