[As Amended by House Committee of the
Whole]
As Amended by House Committee
Session of 2000
HOUSE BILL No. 2715
By Committee on Taxation
1-25
12 AN ACT relating
to property taxation; concerning the valuation of land
13 devoted to
agricultural use; [oblimiting certain valuation
increases]
14 amending K.S.A.
75-5105 and K.S.A. 1999 Supp. 79-1476 and re-
15 pealing the existing
section sections.
16
17 Be it enacted by the Legislature of the
State of Kansas:
18 Section
1. K.S.A. 1999 Supp. 79-1476 is hereby amended to read as
19 follows: 79-1476. The director of property
valuation is hereby directed
20 and empowered to administer and supervise a
statewide program of re-
21 appraisal of all real property located
within the state. Except as otherwise
22 authorized by K.S.A. 19-428, and amendments
thereto, each county shall
23 comprise a separate appraisal district
under such program, and the county
24 appraiser shall have the duty of
reappraising all of the real property in
25 the county pursuant to guidelines and
timetables prescribed by the di-
26 rector of property valuation and of
updating the same on an annual basis.
27 In the case of multi-county appraisal
districts, the district appraiser shall
28 have the duty of reappraising all of the
real property in each of the coun-
29 ties comprising the district pursuant to
such guidelines and timetables
30 and of updating the same on an annual
basis. Commencing in 2000, every
31 parcel of real property shall be actually
viewed and inspected by the
32 county or district appraiser once every six
years. Any county or district
33 appraiser shall be deemed to be in
compliance with the foregoing re-
34 quirement in any year if 17% or more of the
parcels in such county or
35 district are actually viewed and
inspected.
36 Compilation of data
for the initial preparation or updating of invento-
37 ries for each parcel of real property and
entry thereof into the state com-
38 puter system as provided for in K.S.A.
79-1477, and amendments thereto,
39 shall be completed not later than January
1, 1989. Whenever the director
40 determines that reappraisal of all real
property within a county is com-
41 plete, notification thereof shall be given
to the governor and to the state
42 board of tax appeals.
43 Valuations shall be
established for each parcel of real property at its
2
1 fair market value in money in
accordance with the provisions of K.S.A.
2 79-503a, and amendments thereto.
3 In addition
thereto valuations shall be established for each parcel of
4 land devoted to agricultural use upon
the basis of the agricultural income
5 or productivity attributable to the
inherent capabilities of such land in its
6 current usage under a degree of
management reflecting median produc-
7 tion levels in the manner hereinafter
provided. A classification system for
8 all land devoted to agricultural use
shall be adopted by the director of
9 property valuation using criteria
established by the United States depart-
10 ment of agriculture soil conservation
service. For all taxable years com-
11 mencing after December 31, 1989, all land
devoted to agricultural use
12 which is subject to the federal
conservation reserve program shall be
13 classified as cultivated dry land for the
purpose of valuation for property
14 tax purposes pursuant to this section.
For all taxable years commenc-
15 ing after December 31, 1999, all land
devoted to agricultural use
16 which is subject to the federal wetlands
reserve program shall be
17 classified as cultivated dry land for
the purpose of valuation for
18 property tax purposes pursuant to this
section. Productivity of land
19 devoted to agricultural use shall be
determined for all land classes within
20 each county or homogeneous region based on
an average of the eight
21 calendar years immediately preceding the
calendar year which immedi-
22 ately precedes the year of valuation, at a
degree of management reflecting
23 median production levels. The director of
property valuation shall deter-
24 mine median production levels based on
information available from state
25 and federal crop and livestock reporting
services, the soil conservation
26 service, and any other sources of data that
the director considers
27 appropriate.
28 The share of net
income from land in the various land classes within
29 each county or homogeneous region which is
normally received by the
30 landlord shall be used as the basis for
determining agricultural income
31 for all land devoted to agricultural use
except pasture or rangeland. The
32 net income normally received by the
landlord from such land shall be
33 determined by deducting expenses normally
incurred by the landlord
34 from the share of the gross income normally
received by the landlord.
35 The net rental income normally received by
the landlord from pasture or
36 rangeland within each county or homogeneous
region shall be used solely
37 as the basis for determining agricultural
income from such land, and soil
38 classifications for such land shall not
be considered. The net rental income
39 from pasture and rangeland which is
normally received by the landlord
40 shall be determined by deducting expenses
normally incurred from the
41 gross income normally received by the
landlord. Commodity prices, crop
42 yields and pasture and rangeland rental
rates and expenses shall be based
43 on an average of the eight calendar years
immediately preceding the cal-
3
1 endar year which immediately precedes
the year of valuation. Net income
2 for every land class within each
county or homogeneous region shall be
3 capitalized at a rate determined to
be the sum of the contract rate of
4 interest on new federal land bank
loans in Kansas on July 1 of each year
5 averaged over a five-year period
which includes the five years immediately
6 preceding the calendar year which
immediately precedes the year of val-
7 uation, plus a percentage not less
than .75% nor more than 2.75% 3.75%,
8 as determined by the director of
property valuation.
9 Based on the
foregoing procedures the director of property valuation
10 shall make an annual determination of the
value of land within each of
11 the various classes of land devoted to
agricultural use within each county
12 or homogeneous region and furnish the same
to the several county ap-
13 praisers who shall classify such land
according to its current usage and
14 apply the value applicable to such class of
land according to the valuation
15 schedules prepared and adopted by the
director of property valuation
16 under the provisions of this section.
Notwithstanding the foregoing, any
17 county or district appraiser may apply
adverse influence factors to any
18 such value and deviate from such value
accordingly subject to
review
19 [the review and approval] of the
assistant director of property val-
20 uation for use value appraisal of land
devoted to agricultural use.
21 It is the intent of
the legislature that appraisal judgment and appraisal
22 standards be followed and incorporated
throughout the process of data
23 collection and analysis and establishment
of values pursuant to this
24 section.
25 For the purpose of the
foregoing provisions of this section the phrase
26 ``land devoted to agricultural use'' shall
mean and include land, regardless
27 of whether it is located in the
unincorporated area of the county or within
28 the corporate limits of a city, which is
devoted to the production of plants,
29 animals or horticultural products,
including but not limited to: Forages;
30 grains and feed crops; dairy animals and
dairy products; poultry and poul-
31 try products; beef cattle, sheep, swine and
horses; bees and apiary prod-
32 ucts; trees and forest products; fruits,
nuts and berries; vegetables; nurs-
33 ery, floral, ornamental and greenhouse
products. Land devoted to
34 agricultural use shall not include those
lands which are used for recrea-
35 tional purposes, other than that land
established as a controlled shooting
36 area pursuant to K.S.A. 32-943, and
amendments thereto, which shall be
37 deemed to be land devoted to agricultural
use, suburban residential acre-
38 ages, rural home sites or farm home sites
and yard plots whose primary
39 function is for residential or recreational
purposes even though such prop-
40 erties may produce or maintain some of
those plants or animals listed in
41 the foregoing definition.
42 The term ``expenses''
shall mean those expenses typically incurred in
43 producing the plants, animals and
horticultural products described above
4
1 including management fees, production
costs, maintenance and depre-
2 ciation of fences, irrigation wells,
irrigation laterals and real estate taxes,
3 but the term shall not include those
expenses incurred in providing tem-
4 porary or permanent buildings used in
the production of such plants,
5 animals and horticultural
products.
6 The provisions
of this act shall not be construed to conflict with any
7 other provisions of law relating to
the appraisal of tangible property for
8 taxation purposes including the
equalization processes of the county and
9 state board of tax appeals.
10 Sec. 2. K.S.A. 75-5105
is hereby amended to read as follows:
11 75-5105. (a) There is
hereby established, within and as a part of
12 the department of revenue, a division of
property valuation, the
13 head of which shall be the director of
property valuation. Under
14 the supervision of the secretary of
revenue, the director of prop-
15 erty valuation shall administer the
division of property valuation.
16 The secretary of revenue shall appoint
the director of property
17 valuation, subject to confirmation by
the senate as provided in
18 K.S.A. 75-4315b and amendments thereto.
The director shall serve
19 at the pleasure of the secretary of
revenue. The director of prop-
20 erty valuation shall be in the
unclassified service and shall receive
21 an annual salary fixed by the secretary
of revenue and approved
22 by the governor.
23
(b) There is hereby established, within and as a part of
the division
24 of property valuation of the department
of revenue, an assistant director
25 of property valuation for use value
appraisal of land devoted to agricul-
26 tural use. Under the supervision of the
director of property valuation, the
27 assistant director of property valuation
for use value appraisal of land
28 devoted to agricultural use shall
administer, manage, oversee and direct
29 the implementation of the appraisal of
such land. The secretary of revenue
30 shall immediately reclassify an existing
position to created this position.
31 The secretary of revenue shall appoint
the assistant director of property
32 valuation for use value appraisal of
land devoted to agricultural use, sub-
33 ject to confirmation by the senate as
provided in K.S.A. 75-4315b and
34 amendments thereto. The assistant
director of property valuation for use
35 value appraisal of land devoted to
agricultural use shall serve at the plea-
36 sure of the secretary. The assistant
director of property valuation for use
37 value appraisal of land devoted to
agricultural use shall be in the unclas-
38 sified service and shall receive an
annual salary fixed by the secretary of
39 revenue and approved by the governor.
The assistant director of property
40 valuation for use value appraisal of
land devoted to agricultural use shall
41 be a member in good standing of the
Appraisal Institute [and of the
42 American Society of Farm Managers and
Rural Appraisers], meet
43 the requirements of, and maintain the
designation of MAI, and have ex-
5
1 tensive experience in use value
appraisal of land devoted to agricultural
2 use.
3 [New Sec. 3. (a)
Except as otherwise provided by subsection
4 (b), the appraised valuation of
all property established in accord-
5 ance with the provisions of K.S.A.
79-503a, and amendments
6 thereto, for utilization for a
taxable year for property taxation pur-
7 poses shall not exceed the product
of the appraised valuation of
8 such property established for such
purposes for the next preceding
9 taxable year multiplied by a
fraction the numerator of which is the
10 average consumer price index for all
urban consumers published
11 by the federal department of labor as of
the close of the 12-month
12 period ending on August 31 of the first
calendar year preceding
13 the appropriate taxable year and the
denominator of which is such
14 index as of such period ending on August
31 of the second calendar
15 year preceding the appropriate taxable
year.
16 [(b) The
appraised valuation for new or newly improved real
17 property shall, in its initial year of
valuation, be based upon the
18 comparison with values of other real
property of known or rec-
19 ognized value which is subject to the
provisions of paragraph (a).
20 The provisions of subsection (a) shall
be applicable to the ap-
21 praised valuation of new property or new
improvements to prop-
22 erty for the taxable years next
following the taxable year for which
23 such valuation is initially established
and utilized for property tax-
24 ation purposes.
25 [(c) The
provisions of this section shall be applicable to all tax-
26 able years commencing after December 31,
2000.]
27 Sec. 2.
3. [4.] K.S.A. 75-5105 and
K.S.A. 1999 Supp. 79-1476 is
28 are hereby repealed.
29 Sec. 3.
4. [5.] This act shall take
effect and be in force from and after
30 its publication in the statute book.