[As Amended by House Committee of the Whole]
         

         
As Amended by House Commettee
         

          Session of 1998
                   
HOUSE BILL No. 2602
         
By Special Committee on Assessment and Taxation
         
12-17
          12             AN ACT relating to taxation; concerning the administration and prose-
13             cution of certain tax appeals; establishing the Kansas tax appeals com-
14             mission and prescribing authorities, duties and functions therefor;
15             abolishing the state board of tax appeals; amending K.S.A. 74-2426,
16             [77-529,] [79-201j,] 79-213, 79-251, [79-503a, 79-504,] 79-1448, 79-
17             1609, 79-1611 and 79-2005 and K.S.A. 1997 Supp. 74-2438 and 77-
18             529 and repealing the existing sections; also repealing K.S.A. 74-2433a,
19             74-2433b, 74-2433c, 74-2433d, 74-2433e, 74-2434, 74-2435, 74-2436,
20             74-2437, 74-2437a, 74-2437b, 74-2439 and 79-252 and K.S.A. 1997
21             Supp. 74-2433.
22            
23       Be it enacted by the Legislature of the State of Kansas:
24           New Section 1. (a) The state board of tax appeals established by
25       K.S.A. 74-2433 is hereby abolished, and all of the powers, duties, func-
26       tions, records, property and personnel of the state board of tax appeals
27       are hereby transferred to the Kansas tax appeals commission, except as
28       otherwise provided in this act.
29           (b) The Kansas tax appeals commission established by this act shall
30       be a continuation of the state board of tax appeals with regard to the
31       powers, duties and functions prescribed by this act.
32           New Sec. 2. (a) The Kansas tax appeals commission shall be the suc-
33       cessor in every way to the powers, duties and functions of the state board
34       of tax appeals in which such powers, duties and functions were vested
35       prior to the effective date of this act, except as otherwise provided in this
36       act.
37           (b) Whenever the state board of tax appeals, or words of like effect,
38       is referred to or designated by a statute, contract or other document, such
39       reference or designation shall be deemed to apply to the Kansas tax ap-
40       peals commission.
41           (c) All rules and regulations and all orders and directives of the state
42       board of tax appeals in existence on the effective date of this act shall
43       continue to be effective and shall be deemed to be the rules and regu-

HB 2602--Am. by HCW

2

  1       lations and orders or directives of the Kansas tax appeals commission until
  2       revised, amended, repealed or nullified pursuant to law.
  3           New Sec. 3. (a) On the effective date of this act, all unexpended
  4       balances of appropriations to the state board of tax appeals shall be trans-
  5       ferred to the Kansas tax appeals commission to carry out the powers,
  6       duties and functions transferred to the Kansas tax appeals commission by
  7       the provisions of this act.
  8           (b) On the effective date of this act, liability for all accrued compen-
  9       sation or salaries of officers and employees who, immediately prior to
10       such date, were engaged in the performance of powers, duties or func-
11       tions of the state board of tax appeals abolished or transferred by this act
12       shall be assumed and paid by the Kansas tax appeals commission as es-
13       tablished by this act.
14           New Sec. 4. No appeal, suit, action or other proceedings, judicial or
15       administrative, lawfully commenced, or which could have been com-
16       menced, before the state board of tax appeals abolished by this act shall
17       abate by reason of the governmental reorganization effected under the
18       provisions of this act. Jurisdiction over any such appeal, suit, action or
19       other proceeding shall be succeeded to by the Kansas tax appeals com-
20       mission.
21           New Sec. 5. On the effective date of this act, all officers and em-
22       ployees who were engaged immediately prior to the effective date of this
23       act in the performance of powers, duties and functions of the state board
24       of tax appeals and who, in the opinion of the Kansas tax appeals com-
25       mission are necessary to perform the powers, duties and functions trans-
26       ferred to the Kansas tax appeals commission under the provisions of this
27       act shall become officers and employees of the Kansas tax appeals com-
28       mission. Any such officer or employee shall retain all retirement benefits
29       and rights of civil service which had accrued to or vested in such officer
30       or employee prior to the effective date of this act, and the service of each
31       such officer and employee so transferred shall be deemed to have been
32       continuous. All transfers and any abolishment of positions of personnel
33       in the classified civil service under the Kansas civil service act shall be in
34       accordance with civil service laws and any rules and regulations adopted
35       thereunder.
36           New Sec. 6. (a) When any conflict arises as to the disposition of any
37       power, duty or function, the disposition of necessary officers and em-
38       ployees or the unexpended balance of any appropriation or any unex-
39       pended moneys received by the state board of tax appeals as a result of
40       any abolishment or transfer made by this act, or under authority of this
41       act, such conflict shall be resolved by the governor, and the decision of
42       the governor shall be final.
43           (b) When any conflict arises as to the proper disposition of any prop-

HB 2602--Am. by HCW

3

  1       erty or records as a result of any abolishment or transfer made under this
  2       act, or under authority of this act, such conflict shall be resolved by the
  3       governor, and the decision of the governor shall be final.
  4           New Sec. 7. (a) There is hereby created the Kansas tax appeals com-
  5       mission. The Kansas tax appeals commission shall consist be composed
  6       of three five commissioners appointed by the governor, subject to con-
  7       firmation by the senate as provided by K.S.A. 75-4315b, and
  8       amendments thereto. Each commissioner shall be appointed for a term
  9       of six four years, except that of the commissioners first appointed, one
10       shall be appointed for a term of two years, one two shall be appointed
11       for a term of four three years and one two shall be appointed for a term
12       of six four years. Each commissioner may be appointed to one additional
13       six four--year term by the governor. If a vacancy occurs on the Kansas
14       tax appeals commission, the governor shall appoint a successor to fill the
15       vacancy for the unexpired term, subject to confirmation by the senate
16       as provided in K.S.A. 75-4315b, and amendments thereto. The gov-
17       ernor shall select one of the commissioners to serve as chairman.
18       The votes of three commissioners shall be required for any action
19       to be taken by the commission. The governor may appoint a com-
20       missioner pro tem when a conflict prevents a commissioner from
21       hearing an appeal or a commissioner is otherwise unavailable to
22       hear an appeal.
23           (b) In addition to the commissioners appointed to serve on the Kan-
24       sas tax appeals commission, the governor shall appoint one additional
25       commissioner who shall administer the small claims division of the Kansas
26       tax appeals commission created pursuant to section 9. The commissioner
27       of small claims shall be appointed for a term of six years. Such commis-
28       sioner may be appointed to one additional six-year term by the governor.
29       No more than three members of the commission shall be of the
30       same political party. Subject to the provisions of K.S.A. 75-4315c,
31       and amendments thereto, one shall be appointed from each con-
32       gressional district and the remainder at large.
33           (c) Except for the commissioner appointed pursuant to subsection
34       (b), each commissioner Three of such commissioners shall: (1) Have
35       been regularly admitted to practice law in the state of Kansas; (2) be a
36       resident of Kansas at the time of taking the oath of office and shall main-
37       tain residency in Kansas while holding office; and (3) for a period of at
38       least five years, have engaged in the active practice of law as a lawyer,
39       judge of a court of record or any other court in this state, or as a certified
40       public accountant who has maintained registration as an active attorney
41       with the Kansas supreme court, or any combination thereof. [The re-
42       maining commissioners shall be: (1) A resident of Kansas at the
43       time of taking the oath of office and maintain residency in Kansas,

HB 2602--Am. by HCW

4

  1       while holding office; and (2) selected with special reference to
  2       training and experience for duties imposed by this act.] Commis-
  3       sioners appointed pursuant to this section shall be subject to the supreme
  4       court rules of judicial conduct applicable to all judges of the district court.
  5       Commissioners shall be bound by the doctrine of judicial precedent and
  6       shall give due deference to prior commission decisions when rendering
  7       decisions. For the purposes, judicial precedent shall be limited to
  8       published decisions of an appellate court. In the event the com-
  9       mission overturns a prior decision of the commission, it shall state
10       the reasons and justification therefore.
11        (d) Any commissioner of the Kansas tax appeals commission
12       may be removed by the governor for cause, after public hearing
13       conducted in accordance with the provisions of the Kansas admin-
14       istrative procedures act.
15           (d) (e) The Kansas tax appeals commission shall have no capacity to
16       sue or be sued.
17           New Sec. 8. (a) The Kansas tax appeals commission shall appoint,
18       subject to approval by the governor, an executive director of the com-
19       mission, to serve at the pleasure of the commission.
20           (b) The executive director shall: (1) Be in the unclassified service
21       under the Kansas civil service act; (2) devote full time to the executive
22       director's assigned duties; (3) receive such compensation as determined
23       by the commission, subject to the limitations of appropriations therefor;
24       and (4) have familiarity with the tax appeals process sufficient to fulfill
25       the duties of the office of executive director.
26           (c) The executive director shall may: (1) Employ persons necessary
27       to implement the provisions of this act, including appraisers, who shall
28       only serve as technical advisors, subject to the limitations of appro-
29       priations therefor, and (2) perform such other duties as directed by the
30       commission.
31           New Sec. 9. (a) There shall be a division of the Kansas tax appeals
32       commission known as the small claims division. Hearing officers ap-
33       pointed by the executive director shall have authority to hear and decide
34       cases heard in the small claims division. Such cases shall be decided by
35       the commissioner of small claims. In no event shall a hearing officer
36       be subject to any quota system based upon the total amount of tax
37       assessments upheld or property valuations sustained.
38           (b) At the election of the taxpayer, the small claims division shall have
39       jurisdiction over: (1) Any appeal of a decision, finding, order or ruling of
40       the director of taxation, except an appeal, finding, order or ruling
41       relating to an assessment issued pursuant to K.S.A. 79-5201 et seq.,
42       and amendments thereto, in which the amount of tax in controversy
43       does not exceed $20,000, or in the case of a multiple year assessment of

HB 2602--Am. by HCW

5

  1       tax or denial of refund of tax, the amount of tax in controversy does not
  2       exceed $20,000 for any year included therein; (2) hearing and deciding
  3       applications for the refund of protested taxes under the provisions of
  4       K.S.A. 79-2005, and amendments thereto, where the amount of taxes in
  5       issue is less than $20,000 value of the property, other than property
  6       devoted to agricultural use, is less than $3,000,000 as reflected on
  7       the valuation notice or the property constitutes single family res-
  8       idential property; or (3) hearing and deciding appeals from decisions
  9       rendered pursuant to the provisions of article 16 or 17 of chapter 79 of
10       the Kansas Statutes Annotated, and acts amendatory thereof or supple-
11       mental thereto wherein the appraised value in dispute is less than
12       $250,000. value of the property, other than property devoted to
13       agricultural use, is less than $3,000,000 as reflected on the valua-
14       tion notice or the property constitutes single family residential
15       property.
16           (c) A taxpayer Any party may elect to appeal any application or de-
17       cision referenced in subsection (b) to the regular division of the Kansas
18       tax appeals commission. The filing of an appeal with the small claims
19       division shall not be a prerequisite for filing an appeal with the regular
20       division of the Kansas tax appeals commission under this section. Final
21       decisions of the small claims division may be appealed to the Kansas tax
22       appeals commission. An appeal of a decision of the small claims di-
23       vision to the Kansas tax appeals commission shall be de novo.
24           (d) A taxpayer shall commence a proceeding in the small claims di-
25       vision by filing a notice of appeal in the form prescribed by the rules of
26       the Kansas tax appeals commission which shall state the nature of the
27       taxpayer's claim. Notice of appeal shall be provided to the appropriate
28       unit of government named in the notice of appeal. A taxpayer who appeals
29       to the small claims division, shall not appeal to the regular division in the
30       same matter. by the taxpayer. In any valuation appeal or tax protest
31       commenced pursuant to Articles 14 and 20 [of chapter 79] of the
32       Kansas Statutes Annotated, and amendments thereto, the hearing
33       shall be conducted in the county where the property is located or
34       a county adjacent thereto. In any appeal from a final determina-
35       tion by the secretary of revenue, the hearing shall be conducted
36       in the county in which the taxpayer resides or a county adjacent
37       thereto.
38           (e) The hearing in the small claims division shall be informal. The
39       hearing officer may hear any testimony and receive any evidence the
40       hearing officer deems necessary or desirable for a just determination of
41       the case. A hearing officer shall have the authority to administer
42       oaths in all matters before the hearing officer. All testimony shall be
43       given under oath. A party may appear personally or may be represented

HB 2602--Am. by HCW

6

  1       by an attorney or other representative., a certified public accountant,
  2       a certified general appraiser, a member of the taxpayer's imme-
  3       diate family or an authorized employee of the taxpayer. No tran-
  4       script of the proceedings shall be kept.
  5           (f) The hearing in the small claims division shall be conducted within
  6       30 60 days after the appeal is filed in the small claims division. A decision
  7       shall be rendered by the commissioner of small claims hearing officer
  8       within 30 days after the hearing is concluded. Documents provided by
  9       a taxpayer or county or district appraiser shall be returned to the
10       taxpayer or the county or district appraiser by the hearing officer
11       and shall not become a part of the commission's permanent re-
12       cords. Documents provided to the hearing officer shall be confi-
13       dential and may not be disclosed, except as otherwise specifically
14       provided.
15        (g) With regard to any matter properly submitted to the divi-
16       sion relating to the determination of valuation of property for tax-
17       ation purposes, it shall be the duty of the county appraiser to ini-
18       tiate the production of evidence to demonstrate, by a
19       preponderance of the evidence, the validity and correctness of
20       such determination. No presumption shall exist in favor of the
21       county appraiser with respect to the validity and correctness of
22       such determination.
23           New Sec. 10. (a) The hearing officers of the small claims division
24       shall be appointed by the executive director of the Kansas tax appeals
25       commission.
26           (b) Each hearing officer of the small claims division shall receive com-
27       pensation in an amount determined by the executive director and ap-
28       proved by the commissioner.
29           New Sec. 11. The Kansas tax appeals commission is established as
30       an independent agency within the executive branch of state government.
31       All budgeting, purchasing and related management functions shall be
32       administered under the direction of the executive director of the Kansas
33       tax appeals commission. All vouchers for expenditures from appropria-
34       tions to or for the Kansas tax appeals commission shall be approved by
35       the executive director. All records of the state board of tax appeals shall
36       be transferred to the Kansas tax appeals commission on the effective date
37       of this act.
38           New Sec. 12. (a) Each commissioner of the Kansas tax appeals com-
39       mission shall receive an annual salary as provided in this section. Each of
40       the commissioners of the Kansas tax appeals commission shall devote full
41       time to the duties of such position.
42           (b) (1) The annual salary of the chairperson shall be an amount equal
43       to the annual salary paid by the state to a district judge designated as

HB 2602--Am. by HCW

7

  1       administrative judge.
  2           (2) The annual salary of a commissioner other than the chairperson
  3       shall be an amount equal to the annual salary paid by the state to a district
  4       judge.
  5           New Sec. 13. The Kansas tax appeals commission executive direc-
  6       tor, within amounts budgeted for it the commission, may appoint such
  7       employees as may be necessary, and such employees shall be in the un-
  8       classified service of the Kansas civil service act. which employees shall
  9       be in the classified service of the Kansas civil service act and may
10       appoint attorneys and appraisers who shall be in the unclassified
11       service of the Kansas civil service act.
12           New Sec. 14. The Kansas tax appeals commission shall keep an ac-
13       curate record of its official proceedings and shall keep a seal, engraved
14       with the words, ``State of Kansas, Tax Appeals Commission.'' Such seal
15       may be used to authenticate the official acts of the Kansas tax appeals
16       commission or any commissioner thereof, but failure to use the seal shall
17       not invalidate any such act. The Kansas tax appeals commission executive
18       director shall be the custodian of the seal and records and be authorized
19       to affix the seal in all proper cases. Any commissioner shall have the
20       authority to administer oaths in all matters before the commission.
21           New Sec. 15. Appeals decided by the Kansas tax appeals commission
22       which the commission deems of sufficient importance to be published
23       shall be prepared and delivered to the director of printing, who shall as
24       speedily as possible print and publish such number of copies as shall be
25       specified by the commission.
26        New Sec. 16. Except as otherwise provided by law, no appeal
27       shall be filed or docketed in the regular division of the Kansas tax
28       appeals commission without the payment of a docket fee in the
29       amount of $50. Fees collected pursuant to this section shall be
30       credited to the state general fund.
31           New Sec. 16 17. [16.] Except as otherwise provided by law, the Kan-
32       sas tax appeals commission shall have the following powers and duties:
33           (a) To hear appeals from the director of taxation and the director of
34       property valuation on decisions, findings, orders, rulings and interpreta-
35       tions by such directors, and to hear appeals from the small claims division;
36           (b) to hear appeals from the director of property valuation on the
37       assessment of state assessed property;
38        (c) to hear valuation appeals and appeals of tax protests com-
39       menced pursuant to Articles 14 and 20 of the Kansas Statutes An-
40       notated, and amendments thereto;
41           (c) (d) to constitute, sit and act as the state board of equalization as
42       provided in K.S.A. 79-1409, and amendments thereto;
43           (d) (e) to correct errors and irregularities under the provisions of

HB 2602--Am. by HCW

8

  1       article 17 of chapter 79 of the Kansas Statutes Annotated, and amend-
  2       ments thereto;
  3           (e) (f) to authorize the issuance of emergency warrants by taxing dis-
  4       tricts, as provided in article 29 of chapter 79 of the Kansas Statutes An-
  5       notated, and acts amendatory thereof or supplemental thereto, and au-
  6       thorizing the issuance of warrants by cities or counties under statutes of
  7       this state;
  8           (f) (g) to authorize increases in tax levies by taxing districts, as pro-
  9       vided in article 19 of chapter 79 of the Kansas Statutes Annotated, and
10       acts amendatory thereof or supplemental thereto;
11           (g) (h) to review and decide applications for exemptions from prop-
12       erty taxation submitted pursuant to K.S.A. 79-213, and amendments
13       thereto;
14           (h) (i) to adopt rules and regulations relating to the performance of
15       its duties and particularly with reference to procedure before the court
16       on hearings and appeals; and
17           (i) (j) such other powers as may be prescribed.
18           New Sec. 17. 18. [17.] Proceedings before the Kansas tax appeals
19       commission shall be governed by the provisions of the Kansas adminis-
20       trative procedure act except as otherwise specifically provided herein. A
21       taxpayer may be represented by an attorney, any person enrolled to prac-
22       tice before the United States tax court, or may appear pro se. Hearings
23       shall may be conducted by one commissioner, unless the chairperson
24       determines that the case should be heard en banc. The hearing en banc
25       may be allowed for the original hearing or a hearing on reconsideration.
26       The chairman shall have the responsibility of assigning appeals to
27       commissioners for hearing if such appeals are to be heard by one
28       commissioner. If an appeal shall be heard by one commissioner, a
29       certified record of the hearing shall be made available to the other
30       commissioners for consideration when deciding such appeal. The
31       commissioner may only make findings of fact in the appeal. The
32       commission en banc shall rule on questions of law and shall issue
33       the final determination in the appeal. In any evidentiary hearing
34       conducted by less than the full membership of the commission, an
35       attorney member shall be chairperson. Notice thereof shall be pro-
36       vided to the parties at least 10 days prior to the date of such hear-
37       ing.
38           New Sec. 18. 19. [18.] The Kansas tax appeals commission shall have
39       the power to summon witnesses from any part of the state to appear and
40       give testimony, and to compel the witnesses to produce records, books,
41       papers and documents relating to any subject matter before the commis-
42       sion. Summons, subpoenas and subpoenas duces tecum may be directed
43       to the sheriff of any county and may be made returnable at such time as

HB 2602--Am. by HCW

9

  1       the Kansas tax appeals commission shall determine. No fees shall be
  2       charged by the sheriff for service thereof. Witness fees and mileage shall
  3       be allowed and may be taxed as costs to either party in the discretion of
  4       the Kansas tax appeals commission.
  5           The Kansas tax appeals commission shall have power to issue an order
  6       directing depositions of witnesses residing within or without the state, to
  7       be taken, upon proper notice to interested parties, if any, in like manner
  8       that depositions of witnesses are taken in civil actions pending in district
  9       court, in any matter before the Kansas tax appeals commission.
10        New Sec. 20. [19.] (a) Members of the Kansas tax appeals com-
11       mission shall complete the following course requirements: (1) A
12       tested appraisal course of not less than 30 clock hours of instruc-
13       tion consisting of the fundamentals of real property appraisal with
14       an emphasis on the cost and sales approaches to value; (2) a tested
15       appraisal course of not less than 30 clock hours of instruction con-
16       sisting of the fundamentals of real property appraisal with an em-
17       phasis on the income approach to value; (3) a tested appraisal
18       course of not less than 30 clock hours of instruction with an em-
19       phasis on mass appraisal; (4) an appraisal course prescribed by the
20       director of property valuation with an emphasis on Kansas prop-
21       erty tax laws and computer assisted mass appraisal; (5) an appraisal
22       course on the techniques and procedures for the valuation of state
23       assessed properties with an emphasis on unit valuation; and (6) a
24       tested appraisal course on the techniques and procedures for the
25       valuation of land devoted to agricultural use pursuant to K.S.A. 79-
26       1476, and amendments thereto.
27           (b) The executive director shall adopt rules and regulations
28       prescribing a timetable for the completion of the course require-
29       ments set forth in subsection (a), and prescribing continued edu-
30       cation requirements for members of the Kansas tax appeals com-
31       mission.
32           New Sec. 21. [20.] (a) Hearing officers appointed by the ex-
33       ecutive director shall have successfully completed the following
34       course requirements: (1) A tested appraisal course of not less than
35       30 clock hours of instruction consisting of the fundamentals of real
36       property appraisal with an emphasis on the cost and sales ap-
37       proaches to value; (2) a tested appraisal course of not less than 30
38       clock hours of instruction consisting of the fundamentals of real
39       property appraisal with an emphasis on the income approach to
40       value; (3) a tested appraisal course of not less than 30 clock hours
41       of instruction with an emphasis on mass appraisal; and (4) an ap-
42       praisal course prescribed by the director of property valuation
43       with an emphasis on Kansas property tax laws and computer as-

HB 2602--Am. by HCW

10

  1       sisted mass appraisal.
  2           (b) The executive director shall maintain a list of approved
  3       courses which meet the requirements prescribed by subsection (a),
  4       and shall make the final determination whether a candidate for
  5       hearing officer has successfully completed such requirements.
  6           (c) The executive director shall adopt rules and regulations
  7       providing for the administration of this section and prescribing
  8       continued education requirements for hearing officers.
  9        [New Sec. 21. The performance of the duties of a tax appeals
10       commissioner, the executive director of the tax appeals commis-
11       sion, or any hearing officer shall not be based upon a production
12       quota system or on the total amount or percentage of tax collected
13       based upon aggregate revenue projections of any governmental
14       official.]
15           Sec. 19. 22. K.S.A. 74-2426 is hereby amended to read as follows:
16       74-2426. (a) Orders of the board of tax appeals Any final action of the
17       Kansas tax appeals commission on any appeal, in any proceeding under
18       the tax protest, tax grievance or tax exemption statutes or in any other
19       original proceeding before the board commission shall be rendered and
20       served in accordance with the provisions of the Kansas administrative
21       procedure act. Notwithstanding the provisions of subsection (g) of K.S.A.
22       77-526 and amendments thereto, a final order of the board commission
23       shall be rendered in writing and served within 120 days after the matter
24       was fully submitted to the board unless this period is waived or extended
25       with the written consent of all parties or for good cause shown commis-
26       sion.
27           (b) No final order of the board shall be subject to review pursuant to
28       subsection (c) unless the aggrieved party first files a petition for recon-
29       sideration of that order with the board in accordance with the provisions
30       of K.S.A. 77-529 and amendments thereto.
31           (c) Any final action of the board commission pursuant to this section
32       is subject to review in accordance with the act for judicial review and civil
33       enforcement of agency actions, except that:
34           (1) The parties to the action for judicial review shall be the same
35       parties as appeared before the board commission in the administrative
36       proceedings before the board commission. The board commission shall
37       not be a party to any action for judicial review of an action of the board
38       commission.
39           (2) There is no right to review of any order issued by the board com-
40       mission in a no-fund warrant proceeding pursuant to K.S.A. 12-110a,
41       12-1662 et seq., 19-2752a, 79-2938, 79-2939 and 79-2951, and amend-
42       ments thereto, and statutes of a similar character.
43           (3) The court of appeals has jurisdiction of any action for review per-

HB 2602--Am. by HCW

11

  1       taining to property appraised and assessed by the director of property
  2       valuation or excise, income or inheritance taxes assessed by the director
  3       of taxation. The district court of the proper county has jurisdiction in all
  4       other cases any final action of the Kansas tax appeals commission.
  5           (4) Review of orders issued by the board of tax appeals relating to
  6       the valuation or assessment of property for ad valorem tax purposes or
  7       relating to the tax protest shall be conducted by the district court of the
  8       county in which the property is located or, if located in more than one
  9       county, the district court of any county in which any portion of the prop-
10       erty is located. Review of orders relating to tax exemption under K.S.A.
11       79-201et seq., and amendments thereto, shall be conducted by the district
12       court of Shawnee county.
13           (5) In addition to the cost of the preparation of the transcript, the
14       appellant shall pay to the board commission the other costs of certifying
15       the record to the reviewing court. Such payment shall be made prior to
16       the transmission of the agency record to the reviewing court.
17           (c) A petition for review filed in accordance with the act for judicial
18       review and civil enforcement of agency actions shall contain a brief state-
19       ment of the pertinent facts, including the amount of tax assessed, and be
20       accompanied by certified copies of the final order issued by the Kansas
21       tax appeals commission.
22           (d) If review of an order final action of the board commission relating
23       to excise, income or inheritance taxes, is sought by a person other than
24       the director of taxation, such person shall give bond for costs at the time
25       the petition is filed. The bond shall be in the amount of 125% of the
26       amount of taxes assessed or a lesser amount approved by the court of
27       appeals and shall be conditioned on the petitioner's prosecution of the
28       review without delay and payment of all costs assessed against the peti-
29       tioner.
30           (e) If review of an order final action of the commission is sought by
31       a party other than the director of property valuation or a taxing subdivision
32       and the order determines, approves, modifies or equalizes the amount of
33       valuation which is assessable and for which the tax has not been paid, a
34       bond shall be given in the amount of 125% of the amount of the taxes
35       assessed or a lesser amount approved by the reviewing court. The bond
36       shall be conditioned on the petitioner's prosecution of the review without
37       delay and payment of all costs assessed against the petitioner.
38           Sec. 20. 23. K.S.A. 1997 Supp. 74-2438 is hereby amended to read
39       as follows: 74-2438. An appeal may be taken to the state board of tax
40       appeals Kansas tax appeals commission from any finding, ruling, order,
41       decision, final determination or other final action, including action relat-
42       ing to abatement or reduction of penalty and interest, on any case of the
43       secretary of revenue or the secretary's designee by any person aggrieved

HB 2602--Am. by HCW

12

  1       thereby, or as provided by subsection (c) of section 9. Notice of such
  2       appeal shall be filed with the secretary of the board commission within
  3       30 days after such finding, ruling, order, decision, final determination or
  4       other action on a case, and a copy served upon the secretary of revenue
  5       or the secretary's designee. Upon receipt of a timely appeal, the board
  6       commission shall conduct a hearing in accordance with the provisions of
  7       the Kansas administrative procedure act. The hearing before the board
  8       commission shall be a de novo hearing unless the parties agree to submit
  9       the case on the record made before the secretary of revenue or the sec-
10       retary's designee. With regard to any matter properly submitted to the
11       board commission relating to the determination of valuation of residential
12       property for taxation purposes, it shall be the duty of the county or district
13       appraiser to initiate the production of evidence to demonstrate, by a pre-
14       ponderance of the evidence, the validity and correctness of such deter-
15       mination. No presumption shall exist in favor of the county or district
16       appraiser with respect to the validity and correctness of such determi-
17       nation. No interest shall accrue on the amount of the assessment of tax
18       subject to any such appeal beyond 120 days after the date the matter was
19       fully submitted, except that, if a final order is issued within such time
20       period, interest shall continue to accrue until such time as the tax liability
21       is fully satisfied, and if a final order is issued beyond such time period,
22       interest shall recommence to accrue from the date of such order until
23       such time as the tax liability is fully satisfied.
24           Sec. 21. 24. K.S.A. 79-213 is hereby amended to read as follows: 79-
25       213. (a) Any property owner requesting an exemption from the payment
26       of ad valorem property taxes assessed, or to be assessed, against their
27       property shall be required to file an initial request for exemption, on
28       forms approved by the board of tax appeals Kansas tax appeals commis-
29       sion and provided by the county appraiser. The commission shall make
30       available to any property owner information and assistance sufficient to
31       allow the property owner to prepare a proper request for exemption.
32           (b) The initial exemption request shall identify the property for which
33       the exemption is requested and state, in detail, the legal and factual basis
34       for the exemption claimed.
35           (c) The request for exemption shall be filed with the county appraiser
36       of the county where such property is principally located.
37           (d) After a review of the exemption request, and after a preliminary
38       examination of the facts as alleged, the county appraiser shall recommend
39       that the exemption request either be granted or denied, and, if necessary,
40       that a hearing be held. If a denial is recommended, a statement of the
41       controlling facts and law relied upon shall be included on the form.
42           (e) The county appraiser, after making such written recommenda-
43       tion, shall file the request for exemption and the recommendations of the

HB 2602--Am. by HCW

13

  1       county appraiser with the board of tax appeals commission.
  2           (f) Upon receipt of the request for exemption, the board commission
  3       shall docket the same and notify the applicant and the county appraiser
  4       of such fact.
  5           (g) After examination of the request for exemption, and the county
  6       appraiser's recommendation related thereto, the board commission may
  7       fix a time and place for hearing, and shall notify the applicant and the
  8       county appraiser of the time and place so fixed. A request for exemption
  9       under: (1) Section 13, article 11 of the Kansas Constitution; or (2)
10       K.S.A. 79-201a Second, and amendments thereto, for property con-
11       structed or purchased, in whole or in part, with the proceeds of
12       revenue bonds under the authority of K.S.A. 12-1740 to 12-1749,
13       inclusive, and amendments thereto, prepared in accordance with in-
14       structions and assistance provided by the Kansas tax appeals commission
15       shall be deemed approved, unless the commission schedules a hearing
16       scheduled [deemed approved unless the commission schedules a
17       hearing] within 30 days after receipt of the request for exemption. Any
18       decision denying a request for exemption shall be published pursuant to
19       section 15. In any case where a party to such a request for exemption
20       requests a hearing thereon, the same shall be granted. Hearings shall be
21       conducted in accordance with the provisions of the Kansas administrative
22       procedure act. In all instances where the board commission sets a request
23       for exemption for hearing, the county shall be represented by its county
24       attorney or county counselor.
25           (h) In the event of a hearing, the same shall be originally set con-
26       ducted not later than 90 days after the filing of the request for exemption
27       with the board commission. Any decision denying a request for ex-
28       emption shall be published pursuant to section 15.
29           (i) During the pendency of a request for exemption, no person, firm,
30       unincorporated association, company or corporation charged with real
31       estate or personal property taxes pursuant to K.S.A. 79-2004 and 79-
32       2004a, and amendments thereto, on the tax books in the hands of the
33       county treasurer shall be required to pay the tax from the date the request
34       is filed with the county appraiser until the expiration of 30 days after the
35       board commission issued its order thereon and the same becomes a final
36       order. In the event that taxes have been assessed against the subject
37       property, no interest shall accrue on any unpaid tax for the year or years
38       in question nor shall the unpaid tax be considered delinquent from the
39       date the request is filed with the county appraiser until the expiration of
40       30 days after the board commission issued its order thereon. In the event
41       the board determines an application for exemption is without merit and
42       filed in bad faith to delay the due date of the tax, the tax shall be consid-
43       ered delinquent as of the date the tax would have been due pursuant to

HB 2602--Am. by HCW

14

  1       K.S.A. 79-2004 and 79-2004a, and amendments thereto, and interest shall
  2       accrue as prescribed therein.
  3           (j) In the event the board commission grants the initial request for
  4       exemption, the same shall be effective beginning with the date of first
  5       exempt use except that, with respect to property the construction of which
  6       commenced not to exceed 24 months prior to the date of first exempt
  7       use, the same shall be effective beginning with the date of commence-
  8       ment of construction.
  9           (k) In conjunction with its authority to grant exemptions, the board
10       shall have the authority to abate all unpaid taxes that have accrued from
11       and since the effective date of the exemption. In the event that taxes have
12       been paid during the period where the subject property has been deter-
13       mined to be exempt, the board shall have the authority to order a refund
14       of taxes for a period not to exceed three years.
15           (l) The provisions of this section shall not apply to: (1) Farm machin-
16       ery and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
17       and amendments thereto; (2) personal property exempted from ad valo-
18       rem taxation by K.S.A. 79-215, and amendments thereto; (3) wearing
19       apparel, household goods and personal effects exempted from ad valorem
20       taxation by K.S.A. 79-201c, and amendments thereto; (4) livestock; (5)
21       hay and silage exempted from ad valorem taxation by K.S.A. 79-201d, and
22       amendments thereto; (6) merchants' and manufacturers' inventories ex-
23       empted from ad valorem taxation by K.S.A. 79-201m and amendments
24       thereto; (7) grain exempted from ad valorem taxation by K.S.A. 79-201n,
25       and amendments thereto; (8) property exempted from ad valorem taxa-
26       tion by K.S.A. 79-201a Seventeenth and amendments thereto, including
27       all property previously acquired by the secretary of transportation or a
28       predecessor in interest, which is used in the administration, construction,
29       maintenance or operation of the state system of highways. The secretary
30       of transportation shall at the time of acquisition of property notify the
31       county appraiser in the county in which the property is located that the
32       acquisition occurred and provide a legal description of the property ac-
33       quired; (9) property exempted from ad valorem taxation by K.S.A. 79-
34       201a Ninth, and amendments thereto, including all property previously
35       acquired by the Kansas turnpike authority which is used in the adminis-
36       tration, construction, maintenance or operation of the Kansas turnpike.
37       The Kansas turnpike authority shall at the time of acquisition of property
38       notify the county appraiser in the county in which the property is located
39       that the acquisition occurred and provide a legal description of the prop-
40       erty acquired; (10) aquaculture machinery and equipment exempted from
41       ad valorem taxation by K.S.A. 79-201j, and amendments thereto. As used
42       in this section, ``aquaculture'' has the same meaning ascribed thereto by
43       K.S.A. 47-1901, and amendments thereto; (11) Christmas tree machinery

HB 2602--Am. by HCW

15

  1       and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
  2       and amendments thereto; (12) property used exclusively by the state or
  3       any municipality or political subdivision of the state for right-of-way pur-
  4       poses. The state agency or the governing body of the municipality or
  5       political subdivision shall at the time of acquisition of property for
  6       right-of-way purposes notify the county appraiser in the county in which
  7       the property is located that the acquisition occurred and provide a legal
  8       description of the property acquired; (13) machinery, equipment, mate-
  9       rials and supplies exempted from ad valorem taxation by K.S.A. 79-201w,
10       and amendments thereto; (14) vehicles owned by the state or by any
11       political or taxing subdivision thereof and used exclusively for govern-
12       mental purposes; and (15) property used for residential purposes which
13       is exempted pursuant to K.S.A. 79-201x from the property tax levied pur-
14       suant to K.S.A. 1997 Supp. 72-6431, and amendments thereto; and (16)
15       vehicles which are owned by an organization having as one of its
16       purposes the assistance by the provision of transit services to the
17       elderly and to disabled persons and which are exempted pursuant
18       to K.S.A. 79-201 Ninth.
19           (m) The provisions of this section shall apply to property exempt pur-
20       suant to the provisions of section 13 of article 11 of the Kansas consti-
21       tution.
22           (n) The provisions of subsection (j) and (k) as amended by this act
23       shall be applicable to all taxable years commencing after December 31,
24       1995.
25           Sec. 22. 25. K.S.A. 79-2005 is hereby amended to read as follows:
26       79-2005. (a) Any taxpayer, before protesting the payment of such tax-
27       payer's taxes, shall be required, either at the time of paying such taxes,
28       or, if the whole or part of the taxes are paid prior to December 20, no
29       later than December 20, or, with respect to taxes paid in whole on or
30       before December 20 by an escrow or tax service agent, no later than
31       January 31 of the next year, to file a written statement with the county
32       treasurer, on forms approved by the state board of tax appeals Kansas tax
33       appeals commission and provided by the county treasurer, clearly stating
34       the grounds on which the whole or any part of such taxes are protested
35       and citing any law, statute or facts on which such taxpayer relies in pro-
36       testing the whole or any part of such taxes. When the grounds of such
37       protest is that the valuation or assessment of the property upon which
38       the taxes are levied is illegal or void, the county treasurer shall forward a
39       copy of the written statement of protest to the county appraiser who shall
40       within 15 days of the receipt thereof, schedule an informal meeting with
41       the taxpayer or such taxpayer's agent or attorney with reference to the
42       property in question. If the taxpayer owns property which is leased,
43       the taxpayer shall provide income and expense information for

HB 2602--Am. by HCW

16

  1       such property to the county appraiser within 30 days after the fil-
  2       ing of the protest or prior to the date of the informal meeting,
  3       whichever is earlier. Such information shall be confidential and
  4       may not be disclosed by the county appraiser, except as otherwise
  5       specifically provided by law. The county appraiser shall review the
  6       appraisal of the taxpayer's property with the taxpayer or such taxpayer's
  7       agent or attorney and may change the valuation of the taxpayer's property,
  8       if in the county appraiser's opinion a change in the valuation of the tax-
  9       payer's property is required to assure that the taxpayer's property is valued
10       according to law, and shall, within 15 business days thereof, notify the
11       taxpayer in the event the valuation of the taxpayer's property is changed,
12       in writing of the results of the meeting. In the event the valuation of the
13       taxpayer's property is changed and such change requires a refund of taxes
14       and interest thereon, the county treasurer shall process the refund in the
15       manner provided by subsection (l).
16           (b) No protest appealing the valuation or assessment of property shall
17       be filed pertaining to any year's valuation or assessment when an appeal
18       of such valuation or assessment was commenced pursuant to K.S.A. 79-
19       1448, and amendments thereto, nor shall the second half payment of taxes
20       be protested when the first half payment of taxes has been protested.
21       Notwithstanding the foregoing, this provision shall not prevent any sub-
22       sequent owner from protesting taxes levied for the year in which such
23       property was acquired, nor shall it prevent any taxpayer from protesting
24       taxes when the valuation or assessment of such taxpayer's property has
25       been changed pursuant to an order of the director of property valuation.
26           (c) A protest shall not be necessary to protect the right to a refund
27       of taxes in the event a refund is required because the final resolution of
28       an appeal commenced pursuant to K.S.A. 79-1448, and amendments
29       thereto, occurs after the final date prescribed for the protest of taxes.
30           (d) If the grounds of such protest shall be that the valuation or as-
31       sessment of the property upon which the taxes so protested are levied is
32       illegal or void, such statement shall further state the exact amount of
33       valuation or assessment which the taxpayer admits to be valid and the
34       exact portion of such taxes which is being protested.
35           (e) If the grounds of such protest shall be that any tax levy, or any
36       part thereof, is illegal, such statement shall further state the exact portion
37       of such tax which is being protested.
38           (f) Upon the filing of a written statement of protest, the grounds of
39       which shall be that any tax levied, or any part thereof, is illegal, the county
40       treasurer shall mail a copy of such written statement of protest to the
41       state board of tax appeals Kansas tax appeals commission and the gov-
42       erning body of the taxing district making the levy being protested.
43           (g) Within 30 days after notification of the results of the informal

HB 2602--Am. by HCW

17

  1       meeting with the county appraiser pursuant to subsection (a), the pro-
  2       testing taxpayer may, if aggrieved by the results of the informal meeting
  3       with the county appraiser, appeal such results to the state board of tax
  4       appeals small claims or regular division of Kansas tax appeals com-
  5       mission.
  6           (h) After examination of the copy of the written statement of protest
  7       and a copy of the written notification of the results of the informal meet-
  8       ing with the county appraiser in cases where the grounds of such protest
  9       is that the valuation or assessment of the property upon which the taxes
10       are levied is illegal or void, the board commission shall conduct a hearing
11       in accordance with the provisions of the Kansas administrative procedure
12       act, unless waived by the interested parties in writing. If the grounds of
13       such protest is that the valuation or assessment of the property is illegal
14       or void the board shall notify the county appraiser thereof.
15           (i) In the event of a hearing, the same shall be originally set not later
16       than 90 days after the filing of the copy of the written statement of protest
17       and a copy, when applicable, of the written notification of the results of
18       the informal meeting with the county appraiser with the board commis-
19       sion. With regard to any matter properly submitted to the board relating
20       to the determination of valuation of residential property for taxation pur-
21       poses, it shall be the duty of the county appraiser to initiate the production
22       of evidence to demonstrate, by a preponderance of the evidence, the
23       validity and correctness of such determination. No presumption shall exist
24       in favor of the county appraiser with respect to the validity and correctness
25       of such determination. In all instances where the board sets a request for
26       hearing and requires the representation of the county by its attorney or
27       counselor at such hearing, the county shall be represented by its county
28       attorney or counselor.
29           (j) When a determination is made as to the merits of the tax protest,
30       the board commission shall render and serve its order thereon. The
31       county treasurer shall notify all affected taxing districts of the amount by
32       which tax revenues will be reduced as a result of a refund.
33           (k) If a protesting taxpayer fails to file a copy of the written statement
34       of protest and a copy, when applicable, of the written notification of the
35       results of the informal meeting with the county appraiser with the board
36       commission within the time limit prescribed, such protest shall become
37       null and void and of no effect whatsoever.
38           (l) (1) In the event the board commission orders that a refund be
39       made pursuant to this section or the provisions of K.S.A. 79-1609, and
40       amendments thereto, or a court of competent jurisdiction orders that a
41       refund be made, and no appeal is taken from such order, or in the event
42       a change in valuation which results in a refund pursuant to subsection
43       (a), the county treasurer shall, as soon thereafter as reasonably practica-

HB 2602--Am. by HCW

18

  1       ble, refund to the taxpayer such protested taxes and, with respect to pro-
  2       tests or appeals commenced after the effective date of this act, interest
  3       computed at the rate prescribed by K.S.A. 79-2968, and amendments
  4       thereto, minus two percentage points, per annum from the date of pay-
  5       ment of such taxes from tax moneys collected but not distributed. Upon
  6       making such refund, the county treasurer shall charge the fund or funds
  7       having received such protested taxes, except that, with respect to that
  8       portion of any such refund attributable to interest the county treasurer
  9       shall charge the county general fund. In the event that the board or court
10       finds that any time delay in making its decision is unreasonable and is
11       attributable to the taxpayer, it may order that no interest or only a portion
12       thereof be added to such refund of taxes.
13           (2) No interest shall be allowed pursuant to paragraph (1) in any case
14       where the tax paid under protest was inclusive of delinquent taxes.
15           (m) Whenever, by reason of the refund of taxes previously received
16       or the reduction of taxes levied but not received as a result of decreases
17       in assessed valuation, it will be impossible to pay for imperative functions
18       for the current budget year, the governing body of the taxing district
19       affected may issue no-fund warrants in the amount necessary. Such war-
20       rants shall conform to the requirements prescribed by K.S.A. 79-2940,
21       and amendments thereto, except they shall not bear the notation required
22       by such section and may be issued without the approval of the state board
23       of tax appeals Kansas tax appeals commission. The governing body of such
24       taxing district shall make a tax levy at the time fixed for the certification
25       of tax levies to the county clerk next following the issuance of such war-
26       rants sufficient to pay such warrants and the interest thereon. All such
27       tax levies shall be in addition to all other levies authorized by law.
28           (n) The county treasurer shall disburse to the proper funds all por-
29       tions of taxes paid under protest and shall maintain a record of all portions
30       of such taxes which are so protested and shall notify the governing body
31       of the taxing district levying such taxes thereof and the director of ac-
32       counts and reports if any tax protested was levied by the state.
33           (o) This statute shall not apply to the valuation and assessment of
34       property assessed by the director of property valuation and it shall not be
35       necessary for any owner of state assessed property, who has an appeal
36       pending before the board of tax appeals, to protest the payment of taxes
37       under this statute solely for the purpose of protecting the right to a refund
38       of taxes paid under protest should that owner be successful in that appeal.
39           Sec. 23. 26. K.S.A. 79-1448 is hereby amended to read as follows:
40       79-1448. Any taxpayer may complain or appeal to the county appraiser
41       from the classification or appraisal of the taxpayer's property by giving
42       notice to the county appraiser within 30 days subsequent to the date of
43       mailing of the valuation notice required by K.S.A. 79-1460, and amend-

HB 2602--Am. by HCW

19

  1       ments thereto, for real property, and on or before May 15 for personal
  2       property. The county appraiser or the appraiser's designee shall arrange
  3       to hold an informal meeting with the aggrieved taxpayer with reference
  4       to the property in question. At such meeting it shall be the duty of the
  5       county appraiser or the county appraiser's designee to initiate production
  6       of evidence to substantiate the valuation of such property. The county
  7       appraiser may extend the time in which the taxpayer may informally ap-
  8       peal from the classification or appraisal of the taxpayer's property for just
  9       and adequate reasons. If the taxpayer owns property which is leased,
10       the taxpayer shall provide income and expense information for
11       such property to the county appraiser within 30 days after the fil-
12       ing of the appeal or prior to the date of the informal meeting,
13       whichever is earlier. Such information shall be confidential and
14       may not be disclosed by the county appraiser, except as otherwise
15       specifically provided by law. Except as provided in K.S.A. 79-1404,
16       and amendments thereto, no informal meeting regarding real property
17       shall be scheduled to take place after May 15, nor shall a final determi-
18       nation be given by the appraiser after May 20. Any taxpayer who is ag-
19       grieved by the final determination of the county appraiser may appeal to
20       the hearing officer or panel appointed pursuant to K.S.A. 79-1611, and
21       amendments thereto, and such hearing officer, or panel, for just cause
22       shown and recorded, is authorized to change the classification or valuation
23       of specific tracts or individual items of real or personal property in the
24       same manner provided for in K.S.A. 79-1606, and amendments thereto.
25       In lieu of appealing to the hearing officer or panel appointed pursuant to
26       K.S.A. 79-1611, and amendments thereto, any taxpayer aggrieved by the
27       final determination of the county appraiser, other than a taxpayer owning
28       property devoted to agricultural use, may appeal to the small claims di-
29       vision of the Kansas tax appeals commission if the appraised value in
30       dispute is less than $250,000. If the appraised value in dispute is $250,000
31       or greater, then the aggrieved taxpayer may appeal to the regular division
32       of the Kansas tax appeals commission. may appeal to the Kansas tax
33       appeals commission within the time period required by K.S.A.
34       79-1606, and amendments thereto. Any taxpayer, other than a tax-
35       payer owning property devoted to agricultural use, may appeal to
36       the small claims division of the Kansas tax appeals commission
37       within the time period required by K.S.A. 79-1606, and amend-
38       ments thereto, if the value of the property on the valuation notice
39       is less than $3,000,000 or the property constitutes single family
40       residential property. Any taxpayer who is aggrieved by the final deter-
41       mination of a hearing officer or panel may appeal to the state board of
42       tax appeals Kansas tax appeals commission as provided in K.S.A. 79-1609,
43       and amendments thereto. An informal meeting with the county appraiser

HB 2602--Am. by HCW

20

  1       or the appraiser's designee shall be a condition precedent to an appeal to
  2       the county or district hearing panel, or to the small claims or regular
  3       division of the Kansas tax appeals commission.
  4           Sec. 24. 27. K.S.A. 79-1609 is hereby amended to read as follows:
  5       79-1609. Any person aggrieved by any order of the hearing officer or
  6       panel may appeal to the state board of tax appeals Kansas tax appeals
  7       commission by filing a written notice of appeal, on forms approved by the
  8       state board of tax appeals commission and provided by the county clerk
  9       for such purpose, stating the grounds thereof and a description of any
10       comparable property or properties and the appraisal thereof upon which
11       they rely as evidence of inequality of the appraisal of their property, if
12       that be a ground of the appeal, with the board of tax appeals commission
13       and by filing a copy thereof with the county clerk within 30 days after the
14       date of the order from which the appeal is taken. A county or district
15       appraiser may appeal to the state board of tax appeals commission from
16       any order of the hearing officer or panel. With regard to any matter
17       properly submitted to the board commission relating to the determination
18       of valuation of residential property for taxation purposes, it shall be the
19       duty of the county appraiser to initiate the production of evidence to
20       demonstrate, by a preponderance of the evidence, the validity and cor-
21       rectness of such determination. No presumption shall exist in favor of the
22       county appraiser with respect to the validity and correctness of such de-
23       termination.
24        Sec. 28. K.S.A. 79-1611 is hereby amended to read as follows:
25       79-1611. The board of county commissioners of each county having
26       fewer than 10,000 parcels of real property may appoint and the board
27       of county commissioners of each county having 10,000 parcels of real
28       property or more shall appoint at least one hearing officer or county
29       hearing panel of not fewer than three individuals to hear and de-
30       termine appeals from the final determination of classification and
31       appraised valuation of real or personal property by the county ap-
32       praiser. The board of county commissioners, with the approval of
33       the director of property valuation, may unite with the board of
34       county commissioners of one or more counties to form a district
35       for the purpose of appointing at least one hearing officer or district
36       hearing panel of not fewer than three individuals. In any county
37       wherein a hearing officer or county or district hearing panel is not
38       appointed pursuant to this section any appeal from the final de-
39       termination of the county appraiser shall be filed directly with the
40       state board of tax appeals as provided in K.S.A. 79-1609, and
41       amendments thereto.
42           The board of county commissioners shall fix the salary to be paid
43       the hearing officer or each member of the county hearing panel.

HB 2602--Am. by HCW

21

  1       In the case of a district hearing officer or district hearing panel,
  2       the salary to be paid shall be fixed by joint resolution by the boards
  3       of county commissioners published in the official county newspa-
  4       per of each county. The board of county commissioners of each
  5       county is hereby authorized to levy a tax upon all taxable tangible
  6       property in the county in an amount necessary to pay all costs
  7       incurred in complying with this section and K.S.A. 79-1494.
  8           No person may serve as a hearing officer or on a county or dis-
  9       trict hearing panel who is not qualified by virtue of experience and
10       training in the field of property appraisal and property tax admin-
11       istration, such qualifications to be determined by the director of
12       property valuation who shall prescribe guidelines governing the
13       duties of the hearing officers or county and district hearing panels.
14       Each hearing officer and member of a county or district hearing
15       panel shall attend and complete a training program conducted by
16       the director of property valuation or the director's designee. Any
17       person who has performed an appraisal of any property the ap-
18       praised valuation of which is appealed to a hearing officer or the
19       county or district hearing panel shall not hear such appeal and may
20       not participate in any deliberations on such appeal. The board of
21       county commissioners, or individual members thereof, may serve
22       as a hearing officer or as members of the county or district hearing
23       panel provided they meet the foregoing requirements.
24           Whenever the director of property valuation shall conclude that
25       any person appointed as a hearing officer or to a county or district
26       hearing panel has failed or neglected to discharge such person's
27       duties as required by law and that the interest of the public will
28       be promoted by the removal of such person, the director of prop-
29       erty valuation shall issue an order suspending or terminating such
30       person as a hearing officer or member of the hearing panel in the
31       same manner and subject to the same conditions provided in sub-
32       section (b) of K.S.A. 19-431, and amendments thereto.
33           The provisions of this section shall apply to all taxable years com-
34       mencing after December 31, 1992 1997.
35           Sec. 25. 29. K.S.A. 1997 Supp. 77-529 is hereby amended to read as
36       follows: 77-529. (a) Any Except as provided in subsection (e), any party,
37       within 15 days after service of a final order, may file a petition for recon-
38       sideration with the agency head, stating the specific grounds upon which
39       relief is requested. The filing of the petition is not a prerequisite for
40       seeking administrative or judicial review except as provided in K.S.A.
41       44-1010 and 44-1115, and amendments thereto, concerning orders of the
42       Kansas human rights commission, K.S.A. 55-606 and 66-118b, and
43       amendments thereto, concerning orders of the corporation commission

HB 2602--Am. by HCW

22

  1       and K.S.A. 74-2426, and amendments thereto, concerning orders of the
  2       board of tax appeals.
  3           (b) Within 20 days after the filing of the petition, the agency head
  4       shall render a written order denying the petition, granting the petition
  5       and dissolving or modifying the final order, or granting the petition and
  6       setting the matter for further proceedings. The petition may be granted,
  7       in whole or in part, only if the agency head states, in the written order,
  8       findings of fact, conclusions of law and policy reasons for the decision if
  9       it is an exercise of the state agency's discretion, to justify the order. In
10       proceedings before the Kansas corporation commission, the petition is
11       deemed to have been denied if the agency head does not dispose of it
12       within 30 days after the filing of the petition.
13           An order under this section shall be served on the parties in the manner
14       prescribed by K.S.A. 77-531 and amendments thereto.
15           (c) Any order rendered upon reconsideration or any order denying a
16       petition for reconsideration shall state the agency officer to receive service
17       of a petition for judicial review on behalf of the agency.
18           (d) For the purposes of this section, ``agency head'' shall include a
19       presiding officer designated in accordance with subsection (g) of K.S.A.
20       77-514, and amendments thereto.
21           (e) Any party applying for an exemption under: (1) Section 13, article
22       11 of the Kansas Constitution, or (2) K.S.A. 79-201a Second, and amend-
23       ments thereto, for property constructed or purchased, in whole or in part,
24       with the proceeds of revenue bonds under the authority of K.S.A. 12-1740
25       to 12-1749, inclusive, and amendments thereto, may file a petition for
26       reconsideration with the Kansas tax appeals commission within 30 days
27       after service of a final order.
28           Sec. 26. 30. K.S.A. 79-251 is hereby amended to read as follows: 79-
29       251. Prior to the granting of an exemption for any property from ad
30       valorem taxation pursuant to the provisions of section 13 of article 11 of
31       the Kansas constitution, the board of county commissioners of any county
32       or the governing body of any city, as the case requires, shall be required
33       to do the following:
34           (a) Develop and adopt official policies and procedures for the grant-
35       ing of such exemptions including:
36           (1) The required preparation of an analysis of the costs and benefits
37       of each exemption, including the effect of the exemption on state reve-
38       nues, prior to the granting of such exemption;
39           (2) a procedure for monitoring the compliance of a business receiving
40       an exemption with any terms or conditions established by the governing
41       body for the granting of the exemption; and
42           (b) conduct a public hearing on the granting of such exemption. No-
43       tice of the public hearing shall be published at least once seven days prior

HB 2602--Am. by HCW

23

  1       to the hearing in the official city or county newspaper, as the case re-
  2       quires, and shall indicate the purpose, time and place thereof. In addition
  3       to such publication notice, the city or county clerk, as the case requires,
  4       shall notify in writing the governing body of the city or county and unified
  5       school district within which the property proposed for exemption is lo-
  6       cated; and
  7           (c) adopt a resolution containing the following factual findings:
  8           (1) That the property for which the exemption is being granted will
  9       be used exclusively for the purposes specified in section 13, article 11 of
10       the Kansas constitution;
11           (2) if the property is to be used for manufacturing articles of com-
12       merce, that the business using the property is a person, company or cor-
13       poration engaged in the business of transforming, refining or combining
14       materials and labor to convert tangible personal property from one form
15       to another, including packaging or to enhance the value of such prop-
16       erty by processing;
17           (3) if the property is to be used for the expansion of the existing busi-
18       ness in the city or county, that the expansion will result in the employment
19       of one or more additional full-time employees by the expanding business;
20       and
21           (4) [(3)] if the business using the property is relocating from another
22       city or county within the state of Kansas, that the business has received
23       approval from the secretary of commerce and housing prior to qualifying
24       for the exemption.
25        [Sec. 31. K.S.A. 79-201j is hereby amended to read as follows:
26       79-201j. The following described property, to the extent specified
27       by this section, shall be exempt from all property or ad valorem
28       taxes levied under the laws of the state of Kansas:
29           [(a) All farm machinery and equipment. The term ``farm ma-
30       chinery and equipment'' means that personal property actually
31       and regularly used in any farming or ranching operation. The term
32       ``farming or ranching operation'' shall include the operation of a
33       feedlot and the performing of farm or ranch work for hire. The
34       term ``farm machinery and equipment'' shall not include any pas-
35       senger vehicle other than an all-terrain vehicle, truck, truck tractor,
36       trailer, semitrailer or pole trailer, other than a farm trailer, as the
37       terms are defined by K.S.A. 8-126 and amendments thereto.
38           [The provisions of this subsection shall apply to all taxable years
39       commencing after December 31, 1984 1997.
40           [(b) (1) All aquaculture machinery and equipment. The term
41       ``aquaculture machinery and equipment'' means that personal
42       property actually and regularly used in any aquaculture operation.
43       The term ``aquaculture operation'' shall include the feeding out of

HB 2602--Am. by HCW

24

  1       aquatic plants and animals; breeding, growing or rearing aquatic
  2       plants and animals; and selling or transporting aquatic plants and
  3       animals. The term ``aquaculture machinery and equipment'' shall
  4       not include any passenger vehicle other than an all-terrain vehicle,
  5       truck, truck tractor, trailer, semitrailer or pole trailer.
  6           [(2) All Christmas tree machinery and equipment. The term
  7       ``Christmas tree machinery and equipment'' means that personal
  8       property actually and regularly used in any Christmas tree oper-
  9       ation. The term ``Christmas tree operation'' shall include the plant-
10       ing, cultivating and harvesting of Christmas trees; and selling or
11       transporting Christmas trees. The term ``Christmas tree machin-
12       ery and equipment'' shall not include any passenger vehicle other
13       than an all-terrain vehicle, truck, truck tractor, trailer, semitrailer or
14       pole trailer.
15           [The provisions of this subsection shall apply to all taxable years
16       commencing after December 31, 1992 1997.]
17        [Sec. 32. K.S.A. 79-503a is hereby amended to read as follows:
18       79-503a. ''Fair market value`` means the amount in terms of money
19       that a well informed buyer is justified in paying and a well in-
20       formed seller is justified in accepting for property in an open and
21       competitive market, assuming that the parties are acting without
22       undue compulsion. For the purposes of this definition it will be
23       assumed that consummation of a sale occurs as of January 1.
24           [Sales in and of themselves shall not be the sole criteria of fair
25       market value but shall be used in connection with cost, income and
26       other factors including but not by way of exclusion:
27           [(a) The proper classification of lands and improvements;
28           [(b) the size thereof;
29           [(c) the effect of location on value;
30           [(d) depreciation, including physical deterioration or func-
31       tional, economic or social obsolescence;
32           [(e) cost of reproduction of improvements;
33           [(f) productivity;
34           [(g) earning capacity as indicated by lease price, by capitali-
35       zation of net income or by absorption or sell-out period;
36           [(h) rental or reasonable rental values;
37           [(i) sale value on open market with due allowance to abnormal
38       inflationary factors influencing such values;
39           [(j) restrictions imposed upon the use of real estate by local
40       governing bodies, including zoning and planning boards or com-
41       missions; and
42           [(k) comparison with values of other property of known or rec-
43       ognized value. The assessment-sales ratio study shall not be used

HB 2602--Am. by HCW

25

  1       as an appraisal for appraisal purposes.
  2           [The appraisal process utilized in the valuation of all real and
  3       tangible personal property for ad valorem tax purposes shall con-
  4       form to generally accepted appraisal procedures which are adapt-
  5       able to mass appraisal and consistent with the definition of fair
  6       market value unless otherwise specified by law.
  7           [Appraisals produced by the computer assisted mass appraisal system
  8       prescribed or approved by the director of property valuation shall be
  9       acceptable when the following information is provided: (1) Clear and con-
10       cise information on how computer assisted mass appraisal generated the
11       appraisal for taxpayers;
12           [(2) whether the appraisal was based upon income, cost, or the market
13       valuation appraisal process; and
14           [(3) provide comparable residential properties as part of the written
15       appraisal.
16           [Sec. 33. K.S.A. 79-504 is hereby amended to read as follows:
17       79-504. For the purposes of this act:
18           [(a) ``Appraisal foundation'' and ``foundation'' mean the ap-
19       praisal foundation established on November 30, 1987, as a not-for-
20       profit corporation under the laws of Illinois.
21           [(b) ``Written appraisal'' means a written statement used in
22       connection with the activities of the division of property valuation
23       or a county appraiser that is independently and impartially pre-
24       pared by a county appraiser setting forth an opinion of defined
25       value of an adequately described property as of a specific date,
26       supported by presentation and analysis of relevant market infor-
27       mation. Appraisals produced by the computer assisted mass appraisal
28       system prescribed or approved by the director of property valuation shall
29       be deemed to be written appraisals for the purposes of this act.]
30           Sec. 27. 31. [34.] K.S.A. 74-2426, 74-2433a, 74-2433b, 74-2433c, 74-
31       2433d, 74-2433e, 74-2434, 74-2435, 74-2436, 74-2437, 74-2437a, 74-
32       2437b, 74-2439, [77-529,] [79-201j,] 79-213, 79-251, 79-252, [79-503a,
33       79-504] 79-1448, 79-1609, 79-1611 and 79-2005 and K.S.A. 1997 Supp.
34       74-2433 and 74-2438 are hereby repealed.
35           Sec. 28. 30. [35.] This act shall take effect and be in force from and
36       after January 1, 1999, and its publication in the statute book.
37