SESSION OF 2019
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2340
As Amended by House Committee on Taxation

Brief*
HB 2340, as amended, would prohibit county treasurers,
beginning July 1, 2020, from distributing to taxing
subdivisions a portion of property taxes paid under protest for
residential and commercial property under certain
circumstances, effectively providing for the escrow of certain
property tax receipts. The prohibition generally would apply to
the portion of property taxes paid under protest exceeding the
previous year’s taxes for residential payment-under-protest
cases involving an increase in liability of $500 or more, and
for certain commercial payment-under-protest cases involving
an increase in liability of $5,000 or more. The distribution
prohibition specifically would not apply to certain protests of
property taxes involving newly constructed structures, unless
the appraised value exceeds the building permit enumerated
costs by at least 115.0 percent.
County appraisers would be required to send county
clerks a certified list of all real properties whose owners are
protesting valuation or assessment of property taxes that
have not been resolved prior to June 1 of each year, as well
as a second list of all real properties with appraised valuation
of more than $40,000 whose owners are seeking an
exemption. County clerks would be required to subsequently
furnish the lists to all potentially affected taxing units prior to
June 15, along with the assessed valuation of each parcel.
County treasurers prior to January 10 of each year also
would be required to provide those taxing units affected with
lists of all real properties with tax dollars escrowed, as well as
____________________
*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
the assessed valuation of such properties and amount of
funds held in escrow.

Background
The bill was requested for introduction by
Representative Dave Baker, who appeared as the lead
proponent during the public hearing in the House Committee
on Taxation on March 14, 2019. Other proponents included
representatives of the Kansas Chamber; the Kansas
Agribusiness Retailers Association, the Kansas Grain and
Feed Association, and Renew Kansas Association; and the
Kansas Soybean Association. A representative of the Kansas
Association of Realtors submitted written-only testimony in
support of the bill. Written-only testimony in opposition was
submitted from the Riley County Treasurer; the Sedgwick
County Treasurer; and representatives of the Kansas County
Treasurers Association, Johnson County, and the City of
Overland Park. Representatives of the Kansas Association of
Counties and League of Kansas Municipalities appeared as
neutral conferees. Neutral written-only testimony also was
received from a representative of the Kansas Legislative
Policy Group.
The bill as introduced would have applied to certain
commercial cases with property tax increases of $1,000 or
more from one year to the next. The House Taxation
Committee on March 21, 2019, adopted a package of
amendments that included increasing that figure to $5,000;
delaying implementation of the bill until July 1, 2020;
providing an exclusion from the escrow requirements for
certain newly constructed property; and imposing a variety of
notification requirements on county officials. Representative
Baker, who offered the package of amendments, said that
they had been developed by a number of interested parties to
address many of the concerns raised by conferees during the
initial public hearing.


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 A fiscal note prepared by the Division of the Budget on
the bill as introduced indicated the escrow requirement had
the potential to delay distribution of certain receipts to state
funds attributable to the current 21.5 mills in state property
tax levies, but the Department of Revenue could not estimate
an amount. The Board of Tax Appeals also indicated that the
bill was not expected to have any fiscal impact on its
operations. The League of Kansas Municipalities and the
Kansas Association of Counties indicate the bill could
potentially create cash flow problems until the appeals
process is final, but that local governments would not be
required to pay back disputed money to the county because
that money would be held by the county. Any fiscal effect
associated with enactment of the bill is not reflected in The
FY 2020 Governor’s Budget Report.


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Statutes affected:
As introduced: 79-2005
As Amended by House Committee: 79-2005