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AN ACT concerning property exempt from property and ad valorem
  taxes; amending K.S.A. 1996 Supp. 79-201a and repealing the existing
  section.
Be it enacted by the Legislature of the State of Kansas:
  Section 1.  K.S.A. 1996 Supp. 79-201a is hereby amended to read as
follows: 79-201a. The following described property, to the extent herein
specified, shall be exempt from all property or ad valorem taxes levied
under the laws of the state of Kansas:
  First. All property belonging exclusively to the United States, except
property which congress has expressly declared to be subject to state and
local taxation.
  Second. All property used exclusively by the state or any municipality
or political subdivision of the state. All property owned, being acquired
pursuant to a lease-purchase agreement or operated by the state or any
municipality or political subdivision of the state, including property which
is vacant or lying dormant, which is used or is to be used for any govern-
mental or proprietary function and for which bonds may be issued or
taxes levied to finance the same, shall be considered to be ``used exclu-
sively'' by the state, municipality or political subdivision for the purposes
of this section. The lease by a municipality or political subdivision of the
state of any real property owned or being acquired pursuant to a lease-
purchase agreement for the purpose of providing office space necessary
for the performance of medical services by a person licensed to practice
medicine and surgery or osteopathic medicine by the board of healing
arts pursuant to K.S.A. 65-2801 et seq., and amendments thereto, shall
be construed to be a governmental function, and such property actually
and regularly used for such purpose shall be deemed to be used exclu-
sively for the purposes of this paragraph. The lease by a municipality or
political subdivision of the state of any real property, or portion thereof,
owned or being acquired pursuant to a lease-purchase agreement to any
entity for the exclusive use by it for an exempt purpose, including the
purpose of displaying or exhibiting personal property by a museum or
historical society, if no portion of the lease payments include compensa-
tion for return on the investment in such leased property shall be deemed
to be used exclusively for the purposes of this paragraph.  All property
leased, other than property being acquired pursuant to a lease-purchase
agreement, to the state or any municipality or political subdivision of the
state by any private entity shall not be considered to be used exclusively
by the state or any municipality or political subdivision of the state for
the purposes of this section except that the provisions of this sentence
shall not apply to any such property subject to lease on the effective date
of this act until the term of such lease expires but property taxes levied
upon any such property prior to tax year 1989, shall not be abated or
refunded. Any property constructed or purchased with the proceeds of
industrial revenue bonds issued prior to July 1, 1963, as authorized by
K.S.A. 12-1740 to 12-1749, or purchased with proceeds of improvement
district bonds issued prior to July 1, 1963, as authorized by K.S.A. 19-
2776, or with proceeds of bonds issued prior to July 1, 1963, as authorized
by K.S.A. 19-3815a and 19-3815b, or any property improved, purchased,
constructed, reconstructed or repaired with the proceeds of revenue
bonds issued prior to July 1, 1963, as authorized by K.S.A. 13-1238 to 13-
1245, inclusive, or any property improved, reimproved, reconstructed or
repaired with the proceeds of revenue bonds issued after July 1, 1963,
under the authority of K.S.A. 13-1238 to 13-1245, inclusive, which had
previously been improved, reconstructed or repaired with the proceeds
of revenue bonds issued under such act on or before July 1, 1963, shall
be exempt from taxation for so long as any of the revenue bonds issued
to finance such construction, reconstruction, improvement, repair or pur-
chase shall be outstanding and unpaid. Any property constructed or pur-
chased with the proceeds of any revenue bonds authorized by K.S.A. 13-
1238 to 13-1245, inclusive, 19-2776, 19-3815a and 19-3815b, and
amendments thereto, issued on or after July 1, 1963, shall be exempt
from taxation only for a period of 10 calendar years after the calendar
year in which the bonds were issued. Any property, all or any portion of
which is constructed or purchased with the proceeds of revenue bonds
authorized by K.S.A. 12-1740 to 12-1749, inclusive, and amendments
thereto, issued on or after July 1, 1963 and prior to July 1, 1981, shall be
exempt from taxation only for a period of 10 calendar years after the
calendar year in which the bonds were issued. Except as hereinafter pro-
vided, any property constructed or purchased wholly with the proceeds
of revenue bonds issued on or after July 1, 1981, under the authority of
K.S.A. 12-1740 to 12-1749, inclusive, and amendments thereto, shall be
exempt from taxation only for a period of 10 calendar years after the
calendar year in which the bonds were issued. Except as hereinafter pro-
vided, any property constructed or purchased in part with the proceeds
of revenue bonds issued on or after July 1, 1981, under the authority of
K.S.A. 12-1740 to 12-1749, inclusive, and amendments thereto, shall be
exempt from taxation to the extent of the value of that portion of the
property financed by the revenue bonds and only for a period of 10 cal-
endar years after the calendar year in which the bonds were issued. The
exemption of that portion of the property constructed or purchased with
the proceeds of revenue bonds shall terminate upon the failure to pay all
taxes levied on that portion of the property which is not exempt and the
entire property shall be subject to sale in the manner prescribed by K.S.A.
79-2301 et seq., and amendments thereto. Property constructed or pur-
chased in whole or in part with the proceeds of revenue bonds issued on
or after January 1, 1995, under the authority of K.S.A. 12-1740 to 12-
1749, inclusive, and amendments thereto, and used in any retail enter-
prise identified under the standard industrial classification codes, major
groups 52 through 59, inclusive, except facilities used exclusively to house
the headquarters or back office operations of such retail enterprises iden-
tified thereunder, shall not be exempt from taxation. For the purposes of
the preceding provision ``standard industrial classification code'' means a
standard industrial classification code published in the Standard Industrial
Classification manual, 1987, as prepared by the statistical policy division
of the office of management and budget of the office of the president of
the United States. ``Headquarters or back office operations'' means a fa-
cility from which the enterprise is provided direction, management, ad-
ministrative services, or distribution or warehousing functions in support
of transactions made by the enterprise. Property purchased, constructed,
reconstructed, equipped, maintained or repaired with the proceeds of
industrial revenue bonds issued under the authority of K.S.A. 12-1740 et
seq., and amendments thereto, which is located in a redevelopment pro-
ject area established under the authority of K.S.A. 12-1770 et seq. shall
not be exempt from taxation. Property purchased, acquired, constructed,
reconstructed, improved, equipped, furnished, repaired, enlarged or re-
modeled with all or any part of the proceeds of revenue bonds issued
under authority of K.S.A. 12-1740 to 12-1749a, inclusive, and amend-
ments thereto for any poultry confinement facility on agricultural land
which is owned, acquired, obtained or leased by a corporation, as such
terms are defined by K.S.A. 17-5903 and amendments thereto, shall not
be exempt from such taxation. Property purchased, acquired, constructed,
reconstructed, improved, equipped, furnished, repaired, enlarged or re-
modeled with all or any part of the proceeds of revenue bonds issued
under the authority of K.S.A. 12-1740 to 12-1749a, inclusive, and amend-
ments thereto, for a rabbit confinement facility on agricultural land which
is owned, acquired, obtained or leased by a corporation, as such terms
are defined by K.S.A. 17-5903 and amendments thereto, shall not be
exempt from such taxation.
  Third. All works, machinery and fixtures used exclusively by any rural
water district or township water district for conveying or production of
potable water in such rural water district or township water district, and
all works, machinery and fixtures used exclusively by any entity which
performed the functions of a rural water district on and after January 1,
1990, and the works, machinery and equipment of which were exempted
hereunder on March 13, 1995.
  Fourth. All fire engines and other implements used for the extinguish-
ment of fires, with the buildings used exclusively for the safekeeping
thereof, and for the meeting of fire companies, whether belonging to any
rural fire district, township fire district, town, city or village, or to any
     fire
company organized therein or therefor.
  Fifth. All property, real and personal, owned by county fair associations
organized and operating under the provisions of K.S.A. 2-125 et seq. and
amendments thereto.
  Sixth. Property acquired and held by any municipality under the mu-
nicipal housing law (K.S.A. 17-2337 et seq.) and amendments thereto,
except that such exemption shall not apply to any portion of the project
used by a nondwelling facility for profit making enterprise.
  Seventh. All property of a municipality, acquired or held under and for
the purposes of the urban renewal law (K.S.A. 17-4742 et seq.) and
amendments thereto except that such tax exemption shall terminate when
the municipality sells, leases or otherwise disposes of such property in an
urban renewal area to a purchaser or lessee which is not a public body
entitled to tax exemption with respect to such property.
  Eighth. All property acquired and held by the Kansas armory board for
armory purposes under the provisions of K.S.A. 48-317, and amendments
thereto.
  Ninth. All property acquired and used by the Kansas turnpike authority
under the authority of K.S.A. 68-2001 et seq., and amendments thereto,
K.S.A. 68-2030 et seq., and amendments thereto, K.S.A. 68-2051 et seq.,
and amendments thereto, and K.S.A. 68-2070 et seq., and amendments
thereto.
  Tenth. All property acquired and used for state park purposes by the
Kansas department of wildlife and parks.
  Eleventh. The state office building constructed under authority of
K.S.A. 75-3607 et seq., and amendments thereto, and the site upon which
such building is located.
  Twelfth. All buildings erected under the authority of K.S.A. 76-6a01 et
seq., and amendments thereto, and all other student union buildings and
student dormitories erected upon the campus of any institution men-
tioned in K.S.A. 76-6a01, and amendments thereto, by any other non-
profit corporation.
  Thirteenth. All buildings, as the same is defined in subsection (c) of
K.S.A. 76-6a13, and amendments thereto, which are erected, constructed
or acquired under the authority of K.S.A. 76-6a13 et seq., and amend-
ments thereto, and building sites acquired therefor.
  Fourteenth. All that portion of the waterworks plant and system of the
city of Kansas City, Missouri, now or hereafter located within the territory
of the state of Kansas pursuant to the compact and agreement adopted
by chapter 304 of the 1921 Session Laws of the state of Kansas. [See
K.S.A. 79-205].
  Fifteenth. All property, real and personal, owned by a groundwater
management district organized and operating pursuant to K.S.A. 82a-
1020, and amendments thereto.
  Sixteenth. All property, real and personal, owned by the joint water
district organized and operating pursuant to K.S.A. 80-1616 et seq., and
amendments thereto.
  Seventeenth. All property, including interests less than fee ownership,
acquired for the state of Kansas by the secretary of transportation or a
predecessor in interest which is used in the administration, construction,
maintenance or operation of the state system of highways, regardless of
how or when acquired.
  Except as otherwise specifically provided, the provisions of this section
shall apply to all taxable years commencing after December 31, 1994
1996.
  Sec. 2.  K.S.A. 1996 Supp. 79-201a is hereby repealed.
  Sec. 3.  This act shall take effect and be in force from and after its
publication in the Kansas register.