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Session of 2000
          SENATE BILL No. 654           By Committee on Ways and Means           3-6          

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10             AN  ACT relating to property taxation; concerning the valuation of land
11             devoted to agricultural use; amending K.S.A. 1999 Supp. 79-1476 and
12             repealing the existing section.
13      
14       Be it enacted by the Legislature of the State of Kansas:
15             Section  1. K.S.A. 1999 Supp. 79-1476 is hereby amended to read as
16       follows: 79-1476. The director of property valuation is hereby directed
17       and empowered to administer and supervise a statewide program of re-
18       appraisal of all real property located within the state. Except as otherwise
19       authorized by K.S.A. 19-428, and amendments thereto, each county shall
20       comprise a separate appraisal district under such program, and the county
21       appraiser shall have the duty of reappraising all of the real property in
22       the county pursuant to guidelines and timetables prescribed by the di-
23       rector of property valuation and of updating the same on an annual basis.
24       In the case of multi-county appraisal districts, the district appraiser shall
25       have the duty of reappraising all of the real property in each of the coun-
26       ties comprising the district pursuant to such guidelines and timetables
27       and of updating the same on an annual basis. Commencing in 2000, every
28       parcel of real property shall be actually viewed and inspected by the
29       county or district appraiser once every six years. Any county or district
30       appraiser shall be deemed to be in compliance with the foregoing re-
31       quirement in any year if 17% or more of the parcels in such county or
32       district are actually viewed and inspected.
33             Compilation of data for the initial preparation or updating of invento-
34       ries for each parcel of real property and entry thereof into the state com-
35       puter system as provided for in K.S.A. 79-1477, and amendments thereto,
36       shall be completed not later than January 1, 1989. Whenever the director
37       determines that reappraisal of all real property within a county is com-
38       plete, notification thereof shall be given to the governor and to the state
39       board of tax appeals.
40             Valuations shall be established for each parcel of real property at its
41       fair market value in money in accordance with the provisions of K.S.A.
42       79-503a, and amendments thereto.
43             In addition thereto valuations shall be established for each parcel of

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  1       land devoted to agricultural use upon the basis of the agricultural income
  2       or productivity attributable to the inherent capabilities of such land in its
  3       current usage under a degree of management reflecting median produc-
  4       tion levels in the manner hereinafter provided. A classification system for
  5       all land devoted to agricultural use shall be adopted by the director of
  6       property valuation using criteria established by the United States depart-
  7       ment of agriculture soil conservation service. For all taxable years com-
  8       mencing after December 31, 1989, all land devoted to agricultural use
  9       which is subject to the federal conservation reserve program shall be
10       classified as cultivated dry land for the purpose of valuation for property
11       tax purposes pursuant to this section. For all taxable years commencing
12       after December 31, 1999, all land devoted to agricultural use which is
13       subject to the federal wetlands reserve program shall be classified as cul-
14       tivated dry land for the purpose of valuation for property tax purposes
15       pursuant to this section. Productivity of land devoted to agricultural use
16       shall be determined for all land classes within each county or homoge-
17       neous region based on an average of the eight calendar years immediately
18       preceding the calendar year which immediately precedes the year of val-
19       uation, at a degree of management reflecting median production levels.
20       The director of property valuation shall determine median production
21       levels based on information available from state and federal crop and
22       livestock reporting services, the soil conservation service, and any other
23       sources of data that the director considers appropriate.
24             The share of net income from land in the various land classes within
25       each county or homogeneous region which is normally received by the
26       landlord shall be used as the basis for determining agricultural income
27       for all land devoted to agricultural use except pasture or rangeland. The
28       net income normally received by the landlord from such land shall be
29       determined by deducting expenses normally incurred by the landlord
30       from the share of the gross income normally received by the landlord.
31       The net rental income normally received by the landlord from pasture or
32       rangeland within each county or homogeneous region shall be used as
33       the basis for determining agricultural income from such land. The net
34       rental income from pasture and rangeland which is normally received by
35       the landlord shall be determined by deducting expenses normally in-
36       curred from the gross income normally received by the landlord. Com-
37       modity prices, crop yields and pasture and rangeland rental rates and
38       expenses shall be based on an average of the eight calendar years im-
39       mediately preceding the calendar year which immediately precedes the
40       year of valuation. Net income for every land class within each county or
41       homogeneous region shall be capitalized at a rate determined to be the
42       sum of the contract rate of interest on new federal land bank loans in
43       Kansas on July 1 of each year averaged over a five-year period which

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  1       includes the five years immediately preceding the calendar year which
  2       immediately precedes the year of valuation, plus a percentage not less
  3       than.75% nor more than 2.75%, as determined by the director of property
  4       valuation, except that for property tax year 2000, such percentage shall
  5       be 4.25%, for property tax year 2001, such percentage shall be 3.75% and
  6       for property tax year 2002, such percentage shall be 3.25%.
  7             Based on the foregoing procedures the director of property valuation
  8       shall make an annual determination of the value of land within each of
  9       the various classes of land devoted to agricultural use within each county
10       or homogeneous region and furnish the same to the several county ap-
11       praisers who shall classify such land according to its current usage and
12       apply the value applicable to such class of land according to the valuation
13       schedules prepared and adopted by the director of property valuation
14       under the provisions of this section.
15             It is the intent of the legislature that appraisal judgment and appraisal
16       standards be followed and incorporated throughout the process of data
17       collection and analysis and establishment of values pursuant to this
18       section.
19             For the purpose of the foregoing provisions of this section the phrase
20       ``land devoted to agricultural use'' shall mean and include land, regardless
21       of whether it is located in the unincorporated area of the county or within
22       the corporate limits of a city, which is devoted to the production of plants,
23       animals or horticultural products, including but not limited to: Forages;
24       grains and feed crops; dairy animals and dairy products; poultry and poul-
25       try products; beef cattle, sheep, swine and horses; bees and apiary prod-
26       ucts; trees and forest products; fruits, nuts and berries; vegetables; nurs-
27       ery, floral, ornamental and greenhouse products. Land devoted to
28       agricultural use shall not include those lands which are used for recrea-
29       tional purposes, other than that land established as a controlled shooting
30       area pursuant to K.S.A. 32-943, and amendments thereto, which shall be
31       deemed to be land devoted to agricultural use, suburban residential acre-
32       ages, rural home sites or farm home sites and yard plots whose primary
33       function is for residential or recreational purposes even though such prop-
34       erties may produce or maintain some of those plants or animals listed in
35       the foregoing definition.
36             The term ``expenses'' shall mean those expenses typically incurred in
37       producing the plants, animals and horticultural products described above
38       including management fees, production costs, maintenance and depre-
39       ciation of fences, irrigation wells, irrigation laterals and real estate taxes,
40       but the term shall not include those expenses incurred in providing tem-
41       porary or permanent buildings used in the production of such plants,
42       animals and horticultural products.
43             The provisions of this act shall not be construed to conflict with any

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  1       other provisions of law relating to the appraisal of tangible property for
  2       taxation purposes including the equalization processes of the county and
  3       state board of tax appeals. 
  4       Sec.  2. K.S.A. 1999 Supp. 79-1476 is hereby repealed.
  5        Sec.  3. This act shall take effect and be in force from and after its
  6       publication in the Kansas register.