Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 14, 2020


The Honorable Steven Johnson, Chairperson
House Committee on Taxation
Statehouse, Room 185A-N
Topeka, Kansas 66612
Dear Representative Johnson:
SUBJECT: Fiscal Note for HB 2498 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2498 is
respectfully submitted to your committee.
HB 2498 would not allow a hypothetical leased fee to be used in the determination of fair
market value of any property for property tax purposes. The definition of fair market value would
not apply to land devoted to agricultural use.
The Department of Revenue and Board of Tax Appeals indicate HB 2498 would have no
fiscal effect on state revenues or expenditures. The Kansas Association of Counties indicates that
the bill would eliminate the use of the hypothetical lease fee or “dark store theory” as a basis for
determining fair market value. Elimination of the “dark store theory” has the potential to balance
valuations across commercial properties by not artificially lowering the value of certain property.
The Association indicates that this bill could eliminate certain valuation appeals that are based
solely on this theory, which could reduce the amount of county governments resources dedicated
to the property tax appeal process.

Sincerely,

Larry L. Campbell
Director of the Budget

cc: Lynn Robinson, Department of Revenue
Jay Hall, Association of Counties
Jody Allen, Tax Appeals


Statutes affected:
As introduced: 79-503a