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
Adam Proffitt, Director Laura Kelly, Governor


February 8, 2021


The Honorable Adam Smith, Chairperson
House Committee on Taxation
Statehouse, Room 185A-N
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2197 by Representatives T. Johnson and Neelly
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2197 is
respectfully submitted to your committee.
HB 2197 would allow a property owner to apply to the county commission for an
abatement or credit of property taxes that are levied against a building or improvement that is
destroyed or substantially destroyed by earthquake, flood, tornado, fire, or storm. The abatement
would be available for up to three years beginning retroactively to tax year 2016 through tax year
2019. The bill would take effect upon its publication in the Kansas Register.
The Department of Revenue estimates that HB 2197 would decrease property tax revenues
by allowing a county commission to grant a property tax abatement or credit for certain property
that is destroyed or substantially damaged. The Department of Revenue does not have data on the
assessed valuation of the specific property that would receive this abatement or how often a county
commission would provide this abatement to make a precise estimate of the amount of reduced
property tax revenue. The bill would reduce the amount of property tax revenues that would be
collected for the two building funds, the Educational Building Fund and the State Institutions
Building Fund. Less property tax revenue would also have an effect on state expenditures for aid
to school districts. To the extent that less property tax revenue would be available from the state’s
uniform mill levy to fund expenditures for school districts, the state would be required to provide
more state aid from the State General Fund through the school finance formula. Local
governments that levy a property tax would also receive less revenues; however, the amount of
reduced property tax revenues cannot be estimated.
The Honorable Adam Smith, Chairperson
Page 2—HB 2197

The bill would have no fiscal effect on the operations of the Department of Revenue or the
Board of Tax Appeals. The League of Kansas Municipalities and the Kansas Association of
Counties indicate that the bill has the potential to significantly reduce the amount of local property
tax revenues in communities that are affected by a natural disaster. However, they do not have a
basis on which to estimate the amount of property taxes that would be abated to make a precise
estimate of the fiscal effect on local governments. Any fiscal effect associated with HB 2197 is
not reflected in The FY 2022 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Wendi Stark, League of Municipalities
Jay Hall, Association of Counties
Jody Allen, Tax Appeals
Craig Neuenswander, Education
Lynn Robinson, Department of Revenue


Statutes affected:
As introduced: 79-1613