SESSION OF 2020
SUPPLEMENTAL NOTE ON SENATE SUBSTITUTE FOR
HOUSE BILL NO. 2118
As Amended by Senate on Final Action
Brief*
Senate Sub. for HB 2118, as amended, would establish
new notice and public hearing requirements for certain taxing
subdivisions, prohibit certain real property valuation
increases, enact the Golden Years Homestead Property Tax
Freeze Act (Tax Freeze Act), authorize certain payment
options for property taxes, repeal the Selective Assistance for
Effective (SAFE) Senior Relief property tax refund program,
and provide a one-time delay in the deadline for payment of
property taxes.
Notice and Public Hearing Requirements
The bill would establish, beginning in 2021, new notice
and public hearing requirements for certain taxing
subdivisions prior to property tax increases above a revenue-
neutral rate. The bill would not apply to school districts or to
any taxing subdivisions receiving less than $5,000 annually in
property taxes.
On or before June 15 of each year, beginning in 2021,
the bill would require county clerks to submit the revenue-
neutral rate to all other taxing subdivisions at the same time
estimated assessed valuation information is provided.
“Revenue-neutral rate” would be defined to mean the tax rate
for the current tax year that would generate the same
property tax revenue as levied the previous tax year using the
current tax year’s total assessed valuation. The bill would
____________________
*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
require the Director of Accounts and Reports to modify
budget information forms to show the revenue-neutral rate.
The taxing subdivisions affected by the bill would be
prohibited from levying rates that exceed the revenue-neutral
rates unless the taxing subdivisions have published notice on
their websites of the proposed intent to exceed such rates
and announcing a public hearing on such action. On or before
July 15, the bill would also require governing bodies to notify
county clerks of their intent to exceed revenue-neutral rates.
County clerks subsequently would be required to notify each
taxpayer with property in taxing subdivisions seeking to
exceed such rates of the public hearings at least ten days in
advance of the hearings. The bill would require county clerks
to send consolidated notifications for all taxing subdivisions
relevant to a parcel of property via mail unless taxpayers and
county clerks both have consented to service by electronic
means. The bill would require all costs associated with
notification requirements to be borne by taxing subdivisions
seeking to exceed their revenue-neutral rates, with payment
for such costs due to county clerks by December 31.
The bill would require, at public hearings required to be
held on or before September 10, governing bodies to provide
interested taxpayers an opportunity to present oral testimony
within reasonable time limits and without unreasonable
restriction on the number of individuals allowed to make
public comment. At the conclusion of the public hearings, the
bill would require a majority vote of governing bodies
adopting resolutions or ordinances that approve exceeding
the revenue-neutral rates, prior to adoption of proposed
budgets resulting in a tax rate that exceeds the revenue-
neutral rates.
The public hearings could be conducted in conjunction
with other required budget hearings of the taxing
subdivisions. Governing bodies taking such action would be
required to submit on or before September 20 to each county
clerk the amount of property taxes to be levied. Taxing
subdivisions not complying with the notification and public
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hearing requirements outlined in the bill would be required to
refund to taxpayers any over-collected property taxes.
The bill also would repeal, beginning in 2021, the current
property tax lid law applicable to cities and counties (KSA 79-
2925c).
Prohibited Valuation Increases
The bill would prohibit an increase in the appraised
valuation of real property solely as a result of normal repair,
replacement, or maintenance of existing improvements on the
property.
Property Tax Payment Plan
The bill would authorize county treasurers to establish
partial payments and establish payment plans for all property
taxes. Current law grants county treasurers authority to
accept partial payment for delinquent property taxes.
Golden Years Homestead Property Tax Freeze Act
The bill would establish a new property tax circuit
breaker refund program (refund program) beginning in tax
year 2020 that would provide refunds of a portion of property
taxes paid on qualifying residential homestead property
equivalent to the total property tax increase over the base
year. For taxpayers qualifying at the time of enactment, tax
year 2019 liability would be deemed as the base year. For all
other taxpayers, the base year would be the first year in
which they are eligible to claim the refund provided by the Tax
Freeze Act. The maximum amount of any refund under the
program would be $2,500.
In order to qualify for the refund program, the bill would
require a taxpayer to have a household income of less than
$50,000 and be 65 years of age or older or a disabled
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veteran. The value of the qualifying residential homestead
property would have to be less than $350,000. Qualifying
taxpayers would be ineligible to claim a Tax Freeze Act refund
if they are seeking to claim the existing Homestead Property
Tax Refund. The bill would allow surviving spouses of
qualified individuals to continue in the refund program unless
they subsequently remarry. The bill would require Tax Freeze
Act claims to be filed by April 15, relative to refund amounts
determined by the previous property tax year’s liability.
Under the bill, “disabled veterans” would include Kansas
residents honorably discharged from active service in any
branch of the armed forces of the United States or Kansas
National Guard who have been determined to have a 50
percent permanent disability sustained while on active duty.
Beginning with the second year of the program, the
Director of Taxation would be required to send county clerks
electronic records by October 1 of each year containing
names of eligible claimants who have received refunds under
the Tax Freeze Act for the prior year.
Under the bill, the Director of Taxation would have
authority to apply refunds to any state tax liability of the
qualified individual or other member of the household.
Remaining refunds would first be applied to any delinquent
property taxes on the homestead and then to any current
property tax liability.
The bill would grant the Secretary of Revenue authority
to adopt rules and regulations necessary for administration of
the Tax Freeze Act.
Repeal of SAFE Senior Relief Program
The bill would, beginning in tax year 2020, eliminate the
SAFE Senior Relief property tax refund program, which
provided certain taxpayers with an income tax credit equal to
75 percent of the amount of certain property taxes paid.
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Property Tax Payment Delay
The bill would prohibit interest from accruing on unpaid
property tax for tax year 2019 from May 10, 2020, through
August 10, 2020. The tax would not be considered delinquent
for that time and counties would be required to waive any
costs related to delinquent property tax collection charged to
taxpayers prior to August 11, 2020.
The bill would also delay, for tax year 2019 only, the
preparation of a list of real estate subject to sale due to
delinquent taxes until after August 10, 2020, and the
publication deadline of such list would be delayed until
September 1, 2020. Real estate sales of property as a result
of delinquent taxes in 2020 otherwise scheduled to occur on
the first Tuesday of September would be scheduled to occur
on or before the fourth Monday of October.
Effective Date
The bill would be in effect upon publication in the
Kansas Register.
Background
The bill, as introduced, would have created income tax
credits related to the aviation and aerospace industries. The
Senate Committee on Assessment and Taxation (Senate
Committee), on May 13, 2020, removed the contents of the
bill; inserted the contents of SB 294 (as amended by the
Senate Committee of the Whole), the contents of SB 295,
and provisions delaying interest and fees for payments of real
and personal property taxes; and created a substitute bill.
The Senate Committee further amended the contents of SB
294 by changing the latest allowed date of the public hearing
from September 15 to September 10, requiring consolidated
notices from county clerks, and adopting technical
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amendments. Background information for SB 294 and SB
295 is provided below.
The Senate, on May 21, 2020, amended the bill on final
action to insert the provisions of Substitute for HB 2607, as
recommended by the House Committee on Taxation (House
Committee), to insert provisions creating the Tax Freeze Act
and to repeal the SAFE Senior Relief property tax refund
program. Background information for these provisions is
provided below.
A fiscal note on the provisions of the bill delaying
property tax interest and fees was not immediately available.
SB 294 (Notice and Public Hearing Requirements)
The bill was introduced by Senators Tyson, Alley, Braun,
Estes, Goddard, Hilderbrand, Kerschen, Longbine, Lynn,
Masterson, Olson, Petersen, Thompson, Wagle, and Wilborn.
In the Senate Committee hearing on February 7, 2020,
representatives of Americans for Prosperity, the Kansas
Association of Realtors, the Kansas Chamber, the Kansas
Farm Bureau, and the Kansas Policy Institute, and a Linn
County Commissioner, appeared as proponents. Proponents
stated the bill’s provisions would improve property tax
transparency and accountability, and noted the legislation
generally was patterned after a law Utah has had in place
since the 1980s.
Representatives of the City of Lenexa, Kansas
Association of Chiefs of Police, Kansas Association of
Counties (KAC), Kansas Association of School Boards,
Kansas Sheriffs Association, League of Kansas Municipalities
(LKM), and Unified Government of Wyandotte County and
Kansas City, Kansas, appeared in opposition. Opponents
also included the Andover Fire Chief, Andover City Council
President, Atchison Director of Administration Service,
McPherson Police Chief, McPherson Fire Chief, Riley County
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Counselor, and Shawnee County Counselor. Opponents cited
several concerns with the bill, including the potential costs
that could be incurred by the affected taxing subdivisions.
Additional written-only testimony was submitted by
several proponents, opponents, and neutral parties.
On February 13, 2020, the Senate Committee amended
the bill to delay its implementation until 2021 while clarifying
the revenue-neutral levy computation and a number of
statutory timelines local officials would be required to follow,
increase from $5,000 to $20,000 the level of annual property
taxes below which taxing subdivisions would not be required
to be subject to the bill’s provisions, exclude school districts
from the bill’s provisions, and repeal the current tax lid law.
On February 25, 2020, the Senate Committee of the
Whole amended the bill to clarify that county clerks be
reimbursed for notification costs by December 31 of each
year from those taxing subdivisions seeking to exceed
revenue-neutral rates, to decrease from $20,000 to $5,000
the level of taxes below which taxing subdivisions would not
be subject to the bill’s provisions, and to remove a
requirement for notice in official county newspapers.
A fiscal note on SB 294, as amended, was not
immediately available.
SB 295 (Prohibited Valuation Increases)
The bill was introduced by Senators Tyson, Alley, Braun,
Estes, Goddard, Hilderbrand, Longbine, Lynn, Masterson,
Olson, Petersen, Thompson, Wagle, and Wilborn.
In the Senate Committee hearing, testimony in support
of the bill was offered by a representative of the Kansas
Policy Institute. Written-only proponent testimony was offered
by the Kansas Agribusiness Retailers Association, Kansas
Association of Wheat Growers, Kansas Grain and Feed
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Association, Kansas Soybean Association, and Renew
Kansas Biofuels Association. Opponent testimony was
provided by representatives of the KAC and the LKM. Neutral
testimony was provided by representatives of the Property
Valuation Division of the Kansas Department of Revenue
(KDOR) and the Kansas County Appraisers Association.
According to the fiscal note prepared by the Division of
the Budget, the KDOR estimates enactment of the bill has the
potential to decrease property tax revenues by a negligible
amount. The KAC and the LKM indicate enactment of the bill
has the potential to reduce the amount of local property tax
revenues collected, but they are unable to make a precise
estimate of the fiscal effect on local governments. Any fiscal
effect associated with enactment of SB 295 is not reflected in
The FY 2021 Governor’s Budget Report.
Sub. for HB 2607 (Property Tax Payment Plans)
The bill was introduced by the House Committee at the
request of Representative Kelly on behalf of the cities in
Montgomery County. As introduced, the bill would have
established specific guidelines for counties seeking to
authorize installment payment plans for residential property.
At the House Committee hearing on February 20, 2020,
Representative Kelly appeared as a proponent, as did a
representative of the League of Kansas Municipalities and the
Caney City Administrator. A representative of the Kansas
Association of Counties and the Riley County Treasurer
appeared in opposition. Written-only testimony in opposition
was submitted by the Kansas County Treasurers Association.
No neutral testimony was provided.
On February 24, 2020, the House Committee amended
the bill to remove its original provisions and to expand the
authority of county treasurers in current law to allow for
property tax partial payments and payment plans. The House
Committee recommended a substitute bill be created.
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According to the fiscal note prepared by the Division of
the Budget on HB 2607 as introduced, the KDOR did not
anticipate any impact on the amount of property taxes
collected but noted that the timing of receipts could be
affected.
Golden Years Homestead Property Tax Freeze Act and
SAFE Senior Relief Repeal
The Tax Freeze Act was originally introduced in 2019 as
SB 91 and passed the Senate as a part of SB 104. The Tax
Freeze Act, as passed by the Senate in Senate Sub. for HB
2118, included the following changes to the version passed
by the Senate in SB 104:
● The base tax year is changed to 2019;
● The initial year of the program is changed to 2020;
● The date for which the list of eligible claimants
must be delivered by to counties is changed from
October 15 to October 1; and
● An annual cap on the maximum amount of refund
under the program was added.
Additionally, SB 104 did not repeal the SAFE Senior
property tax refund program and did provide for qualifying
disabled veterans to participate in the existing Homestead
Refund Program.
The Tax Freeze Act is projected to increase State
General Fund (SGF) receipts by $0.9 million in FY 2021,
decrease SGF receipts by $5.7 million in FY 2022, and
decrease SGF receipts by $12.3 million in FY 2023.
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Statutes affected: Version 4: 79-1460, 79-1801, 79-2302, 79-2303, 79-2925c
{As Amended by Senate Committee of the Whole}: 79-1460, 79-1801, 79-2302, 79-2303, 79-2925c, 79-2024, 79-32