Session of 1998
                   
HOUSE BILL No. 2600
         
By Special Committee on Assessment and Taxation
         
12-17
            9             AN ACT relating to property taxation; concerning the administration of
10             claims for exemptions therefrom; amending K.S.A. 77-529, 79-213 and
11             79-251 and repealing the existing sections; also repealing K.S.A. 79-
12             252.
13            
14       Be it enacted by the Legislature of the State of Kansas:
15           Section 1. K.S.A. 79-213 is hereby amended to read as follows: 79-
16       213. (a) Any property owner requesting an exemption from the payment
17       of ad valorem property taxes assessed, or to be assessed, against their
18       property shall be required to file an initial request for exemption, on
19       forms approved by the board of tax appeals and provided by the county
20       appraiser. The board shall make available sufficient assistance and infor-
21       mation to allow a taxpayer to properly prepare a request for exemption.
22           (b) The initial exemption request shall identify the property for which
23       the exemption is requested and state, in detail, the legal and factual basis
24       for the exemption claimed.
25           (c) The request for exemption shall be filed with the county appraiser
26       of the county where such property is principally located.
27           (d) After a review of the exemption request, and after a preliminary
28       examination of the facts as alleged, the county appraiser shall recommend
29       that the exemption request either be granted or denied, and, if necessary,
30       that a hearing be held. If a denial is recommended, a statement of the
31       controlling facts and law relied upon shall be included on the form.
32           (e) The county appraiser, after making such written recommenda-
33       tion, shall file the request for exemption and the recommendations of the
34       county appraiser with the board of tax appeals.
35           (f) Upon receipt of the request for exemption, the board shall docket
36       the same and notify the applicant and the county appraiser of such fact.
37           (g) After examination of the request for exemption, and the county
38       appraiser's recommendation related thereto, the board may fix a time and
39       place for hearing, and shall notify the applicant and the county appraiser
40       of the time and place so fixed. A request for exemption prepared in ac-
41       cordance with the assistance and information provided by the board shall
42       be deemed approved unless a hearing thereon is scheduled within 30 days
43       after the date of receipt of the request for exemption. In any case where

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  1       a party to such request for exemption requests a hearing thereon, the
  2       same shall be granted. Hearings shall be conducted in accordance with
  3       the provisions of the Kansas administrative procedure act. In all instances
  4       where the board sets a request for exemption for hearing, the county shall
  5       be represented by its county attorney or county counselor.
  6           (h) In the event of a hearing, the same shall be originally set not later
  7       than 90 days after the date of filing of the request for exemption with the
  8       board.
  9           (i) During the pendency of a request for exemption, no person, firm,
10       unincorporated association, company or corporation charged with real
11       estate or personal property taxes pursuant to K.S.A. 79-2004 and 79-
12       2004a, and amendments thereto, on the tax books in the hands of the
13       county treasurer shall be required to pay the tax from the date the request
14       is filed with the county appraiser until the expiration of 30 days after the
15       board issued its order thereon and the same becomes a final order. In
16       the event that taxes have been assessed against the subject property, no
17       interest shall accrue on any unpaid tax for the year or years in question
18       nor shall the unpaid tax be considered delinquent from the date the re-
19       quest is filed with the county appraiser until the expiration of 30 days
20       after the board issued its order thereon. In the event the board deter-
21       mines an application for exemption is without merit and filed in bad faith
22       to delay the due date of the tax, the tax shall be considered delinquent
23       as of the date the tax would have been due pursuant to K.S.A. 79-2004
24       and 79-2004a, and amendments thereto, and interest shall accrue as pre-
25       scribed therein.
26           (j) In the event the board grants the initial request for exemption,
27       the same shall be effective beginning with the date of first exempt use
28       except that, with respect to property the construction of which com-
29       menced not to exceed 24 months prior to the date of first exempt use,
30       the same shall be effective beginning with the date of commencement of
31       construction. In the event any such request is denied, such decision shall
32       be published.
33           (k) In conjunction with its authority to grant exemptions, the board
34       shall have the authority to abate all unpaid taxes that have accrued from
35       and since the effective date of the exemption. In the event that taxes have
36       been paid during the period where the subject property has been deter-
37       mined to be exempt, the board shall have the authority to order a refund
38       of taxes for a period not to exceed three years.
39           (l) The provisions of this section shall not apply to: (1) Farm machin-
40       ery and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
41       and amendments thereto; (2) personal property exempted from ad valo-
42       rem taxation by K.S.A. 79-215, and amendments thereto; (3) wearing
43       apparel, household goods and personal effects exempted from ad valorem

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  1       taxation by K.S.A. 79-201c, and amendments thereto; (4) livestock; (5)
  2       hay and silage exempted from ad valorem taxation by K.S.A. 79-201d, and
  3       amendments thereto; (6) merchants' and manufacturers' inventories ex-
  4       empted from ad valorem taxation by K.S.A. 79-201m and amendments
  5       thereto; (7) grain exempted from ad valorem taxation by K.S.A. 79-201n,
  6       and amendments thereto; (8) property exempted from ad valorem taxa-
  7       tion by K.S.A. 79-201a Seventeenth and amendments thereto, including
  8       all property previously acquired by the secretary of transportation or a
  9       predecessor in interest, which is used in the administration, construction,
10       maintenance or operation of the state system of highways. The secretary
11       of transportation shall at the time of acquisition of property notify the
12       county appraiser in the county in which the property is located that the
13       acquisition occurred and provide a legal description of the property ac-
14       quired; (9) property exempted from ad valorem taxation by K.S.A. 79-
15       201a Ninth, and amendments thereto, including all property previously
16       acquired by the Kansas turnpike authority which is used in the adminis-
17       tration, construction, maintenance or operation of the Kansas turnpike.
18       The Kansas turnpike authority shall at the time of acquisition of property
19       notify the county appraiser in the county in which the property is located
20       that the acquisition occurred and provide a legal description of the prop-
21       erty acquired; (10) aquaculture machinery and equipment exempted from
22       ad valorem taxation by K.S.A. 79-201j, and amendments thereto. As used
23       in this section, ``aquaculture'' has the same meaning ascribed thereto by
24       K.S.A. 47-1901, and amendments thereto; (11) Christmas tree machinery
25       and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
26       and amendments thereto; (12) property used exclusively by the state or
27       any municipality or political subdivision of the state for right-of-way pur-
28       poses. The state agency or the governing body of the municipality or
29       political subdivision shall at the time of acquisition of property for
30       right-of-way purposes notify the county appraiser in the county in which
31       the property is located that the acquisition occurred and provide a legal
32       description of the property acquired; (13) machinery, equipment, mate-
33       rials and supplies exempted from ad valorem taxation by K.S.A. 79-201w,
34       and amendments thereto; (14) vehicles owned by the state or by any
35       political or taxing subdivision thereof and used exclusively for govern-
36       mental purposes; and (15) property used for residential purposes which
37       is exempted pursuant to K.S.A. 79-201x from the property tax levied pur-
38       suant to K.S.A. 1997 Supp. 72-6431, and amendments thereto.
39           (m) The provisions of this section shall apply to property exempt pur-
40       suant to the provisions of section 13 of article 11 of the Kansas consti-
41       tution.
42           (n) The provisions of subsection (j) and (k) as amended by this act
43       shall be applicable to all taxable years commencing after December 31,

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  1       1995.
  2           Sec. 2. K.S.A. 79-251 is hereby amended to read as follows: 79-251.
  3       Prior to the granting of an exemption for any property from ad valorem
  4       taxation pursuant to the provisions of section 13 of article 11 of the Kansas
  5       constitution, the board of county commissioners of any county or the
  6       governing body of any city, as the case requires, shall be required to do
  7       the following:
  8           (a) Develop and adopt official policies and procedures for the grant-
  9       ing of such exemptions including:
10           (1) The required preparation of an analysis of the costs and benefits
11       of each exemption, including the effect of the exemption on state reve-
12       nues, prior to the granting of such exemption;
13           (2) a procedure for monitoring the compliance of a business receiving
14       an exemption with any terms or conditions established by the governing
15       body for the granting of the exemption; and
16           (b) conduct a public hearing on the granting of such exemption. No-
17       tice of the public hearing shall be published at least once seven days prior
18       to the hearing in the official city or county newspaper, as the case re-
19       quires, and shall indicate the purpose, time and place thereof. In addition
20       to such publication notice, the city or county clerk, as the case requires,
21       shall notify in writing the governing body of the city or county and unified
22       school district within which the property proposed for exemption is lo-
23       cated; and
24           (c) adopt a resolution containing the following factual findings:
25           (1) That the property for which the exemption is being granted will
26       be used exclusively for the purposes specified in section 13, article 11 of
27       the Kansas constitution;
28           (2) if the property is to be used for manufacturing articles of com-
29       merce, that the business using the property is a person, company or cor-
30       poration engaged in the business of transforming, refining or combining
31       materials and labor to convert tangible personal property from one form
32       to another, including packaging;
33           (3) if the property is to be used for the expansion of an existing busi-
34       ness in the city or county, that the expansion will result in the employment
35       of one or more additional full-time employees by the expanding business;
36       and
37           (4) if the business using the property is relocating from another city
38       or county within the state of Kansas, that the business has received ap-
39       proval from the secretary of commerce and housing prior to qualifying
40       for the exemptions.
41           Sec. 3. K.S.A. 77-529 is hereby amended to read as follows: 77-529.
42       (a) Any Except as otherwise provided by subsection (e), any party, within
43       15 days after service of a final order, may file a petition for reconsideration

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  1       with the agency head, stating the specific grounds upon which relief is
  2       requested. The filing of the petition is not a prerequisite for seeking
  3       administrative or judicial review except as provided in K.S.A. 44-1010 and
  4       44-1115, and amendments thereto, concerning orders of the Kansas hu-
  5       man rights commission, K.S.A. 55-606 and 66-118b, and amendments
  6       thereto, concerning orders of the corporation commission and K.S.A. 74-
  7       2426, and amendments thereto, concerning orders of the board of tax
  8       appeals.
  9           (b) Within 20 days after the filing of the petition, the agency head
10       shall render a written order denying the petition, granting the petition
11       and dissolving or modifying the final order, or granting the petition and
12       setting the matter for further proceedings. The petition may be granted,
13       in whole or in part, only if the agency head states, in the written order,
14       findings of fact, conclusions of law and policy reasons for the decision if
15       it is an exercise of the state agency's discretion, to justify the order. In
16       proceedings before the Kansas corporation commission, the petition is
17       deemed to have been denied if the agency head does not dispose of it
18       within 30 days after the filing of the petition.
19           An order under this section shall be served on the parties in the manner
20       prescribed by K.S.A. 77-531 and amendments thereto.
21           (c) Any order rendered upon reconsideration or any order denying a
22       petition for reconsideration shall state the agency officer to receive service
23       of a petition for judicial review on behalf of the agency.
24           (d) For the purposes of this section, ``agency head'' shall include a
25       presiding officer designated in accordance with subsection (g) of K.S.A.
26       77-514, and amendments thereto.
27           (e) Any party applying for an exemption pursuant to section 13 of
28       article 11 of the Kansas Constitution, or K.S.A. 79-201a Second, and
29       amendments thereto, for property constructed or purchased, in whole or
30       in part, with the proceeds of revenue bonds under the authority of K.S.A.
31       12-1740 to 12-1749, inclusive, and amendments thereto, may file a peti-
32       tion for reconsideration with the state board of tax appeals within 30 days
33       after service of a final order.
34           Sec. 4. K.S.A. 77-529, 79-213, 79-251 and 79-252 are hereby re-
35       pealed.
36           Sec. 5. This act shall take effect and be in force from and after its
37       publication in the statute book.
38