Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


February 3, 2022


The Honorable Adam Smith, Chairperson
House Committee on Taxation
Statehouse, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2493 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2493 is
respectfully submitted to your committee.
For classification of real property for property tax purposes, HB 2493 would require that
land devoted to agricultural use be at least two acres in size unless the parcel is contiguous with a
larger parcel devoted to agricultural use. The bill would also include clarifying language that real
property that is used or intended to be used for residential purposes is for occupation by humans.
The Department of Revenue is unable provide a reliable estimate of the fiscal effect for HB
2493 due to unknown and unique changes in appraised valuation for each parcel. The Department
of Revenue’s Property Valuation Division (PVD) indicates there are 24,365 parcels of land with
less than two acres in Kansas that are classified as land devoted to agricultural use. Parcels under
two acres in size currently classified as land devoted to agricultural use are appraised based on a
“use value” and assessed at 30.0 percent of appraised value. PVD indicates that parcels removed
from the land devoted to agricultural use class would most likely be reclassified as either as a
vacant lot, appraised at market value and assessed at 12.0 percent of market value, or other,
appraised at market value and assessed at 30.0 percent of market value. The market value is based
on the highest and best use of each parcel and could be agricultural land, commercial, or
residential. It is unknown to PVD what is the highest and best use of the parcels from reclassifying
the parcel or the market value for each parcel. However, market value estimates are consistently
higher than appraised values based on the use value calculation, which would likely increase
property tax valuations.
The bill would have the potential to increase property tax revenues by changing the
classification of certain property. The state would receive additional property tax revenues to the
The Honorable Adam Smith, Chairperson
Page 2—HB 2493

two state building funds, the Educational Building Fund and the State Institutions Building Fund.
The bill would increase the amount of property tax revenues that school districts would receive
through the state’s uniform mill levy. The bill would also increase revenues to any local
government that levies a property tax. However, the Department of Revenue does not have data
on the property that would now be assessed property taxes under the provisions of HB 2493;
therefore, a precise estimate of the amount of increased property tax revenues and its effect on
local and state revenues cannot be estimated. The Department indicates that the bill would have
no fiscal effect on its operations.
The League of Kansas Municipalities and Kansas Association of Counties indicate that the
bill would have the potential provide a net increase to local property tax collections that are used
in part to finance local governments. Any fiscal effect associated with HB 2493 is not reflected in
The FY 2023 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget


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

Statutes affected:
As introduced: 79-1439