CHAPTER 126 SENATE BILL No. 78 (Amends Chapter 123) An  Act relating to taxation; concerning property tax administration procedures and ex-
emptions therefrom; concerning the reporting of certain oil and gas information; amend-
ing K.S.A. 19-1207, 66-104c, 75-5133, 79-201j, 79-412, 79-5a01, 79-1460, as amended
by section 3 of 1999 Senate Bill No. 11, 79-1606, 79-1609 and 79-2005 and K.S.A. 1998
Supp. 74-2433f, 74-2438 and 79-213 and repealing the existing sections; also repealing
K.S.A. 75-3038, 75-3039, 75-3040 and 75-3042.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 66-104c is hereby amended to read as follows: 66-
104c. (a) Except as otherwise provided in subsection (b), no nonprofit
public utility shall be subject to the jurisdiction, regulation, supervision
and control of the state corporation commission if the utility meets the
following conditions: (1) Every customer, shareholder, household or
meter owner is an automatic owner of the utility and has an equal vote
on matters concerning the utility; (2) the utility employs no full-time
employees; and (3) the utility has no more than 50 100 customers, pro-
vided that customer additions resulting from sales or transfers of real
property or rights in tenancy shall not be counted for purposes of deter-
mining the maximum number of customers.

      (b) The state corporation commission shall retain jurisdiction and
control over the service territory of a utility described in subsection (a)
and over all matters concerning natural gas pipeline safety.

      Sec.  2. K.S.A. 79-201j is hereby amended to read as follows: 79-201j.
The following described property, to the extent specified by this section,
shall be exempt from all property or ad valorem taxes levied under the
laws of the state of Kansas:

      (a) All farm machinery and equipment. The term ``farm machinery
and equipment'' means that personal property actually and regularly used
in any farming or ranching operation. The term ``farm machinery and
equipment'' shall include machinery and equipment comprising a natural
gas distribution system which is owned and operated by a nonprofit public
utility described by K.S.A. 66-104c, and amendments thereto, and which
is operated predominantly for the purpose of providing fuel for the irri-
gation of land devoted to agricultural use. The term ``farming or ranching
operation'' shall include the operation of a feedlot and the performing of
farm or ranch work for hire. The term ``farm machinery and equipment''
shall not include any passenger vehicle, truck, truck tractor, trailer, sem-
itrailer or pole trailer, other than a farm trailer, as the terms are defined
by K.S.A. 8-126 and amendments thereto.

      The provisions of this subsection shall apply to all taxable years com-
mencing after December 31, 1984 1998.

      (b)  (1) All aquaculture machinery and equipment. The term ``aqua-
culture machinery and equipment'' means that personal property actually
and regularly used in any aquaculture operation. The term ``aquaculture
operation'' shall include the feeding out of aquatic plants and animals;
breeding, growing or rearing aquatic plants and animals; and selling or
transporting aquatic plants and animals. The term ``aquaculture machin-
ery and equipment'' shall not include any passenger vehicle, truck, truck
tractor, trailer, semitrailer or pole trailer.

      (2) All Christmas tree machinery and equipment. The term ``Christ-
mas tree machinery and equipment'' means that personal property ac-
tually and regularly used in any Christmas tree operation. The term
``Christmas tree operation'' shall include the planting, cultivating and har-
vesting of Christmas trees; and selling or transporting Christmas trees.
The term ``Christmas tree machinery and equipment'' shall not include
any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole
trailer.

      The provisions of this subsection shall apply to all taxable years com-
mencing after December 31, 1992.

      Sec.  3. K.S.A. 79-5a01 is hereby amended to read as follows: 79-
5a01. (a) As used in this act, the terms ``public utility'' or ``public utilities''
shall mean every individual, company, corporation, association of persons,
lessees or receivers that now or hereafter are in control, manage or op-
erate a business of:

      (1) A railroad or railroad corporation if such railroad or railroad cor-
poration owns or holds, by deed or other instrument, an interest in right-
of-way, track, franchise, roadbed or trackage in this state;

      (2) transmitting to, from, through or in this state telegraphic messa-
ges;

      (3) transmitting to, from, through or in this state telephonic messages;

      (4) transporting or distributing to, from, through or in this state nat-
ural gas, oil or other commodities in pipes or pipelines, or engaging pri-
marily in the business of storing natural gas in an underground formation;

      (5) generating, conducting or distributing to, from, through or in this
state electric power;

      (6) transmitting to, from, through or in this state water if for profit
or subject to regulation of the state corporation commission;

      (7) transporting to, from, through or in this state cargo or passengers
by means of any vessel or boat used in navigating any of the navigable
watercourses within or bordering upon this state.

      (b) The terms ``public utility'' or ``public utilities'' shall not include:
(1) Rural water districts established under the laws of the state of Kansas;
or (2) any individual, company, corporation, association of persons, lessee
or receiver owning or operating an oil or natural gas production gathering
line which is situated within one county in this state and does not cross
any state boundary line; or (3) any individual, company, corporation, as-
sociation of persons, lessee or receiver owning any vessel or boat operated
upon the surface of any manmade waterway located entirely within one
county in the state; or (4) for all taxable years commencing after December
31, 1998, any natural gas distribution system which is owned and oper-
ated by a nonprofit public utility described by K.S.A. 66-104c, and amend-
ments thereto, and which is operated predominantly for the purpose of
providing fuel for the irrigation of land devoted to agricultural use.

      Sec.  4. K.S.A. 19-1207 is hereby amended to read as follows: 19-
1207. (a) The register of deeds shall also shall keep a large, well-bound
book, in which shall be platted kept all maps and plats of towns, villages
cities, subdivisions or additions to the same within the county, together
with the description, acknowledgment or other writing thereon. The reg-
ister shall keep an index to such book of plats, which. Such index shall
contain the name or names of the proprietor or proprietors of such town,
village cities, subdivisions or addition and the name of the town, village
cities, subdivisions or addition. No register of deeds shall be bound to
perform any of the duties required to be performed by this act, for which
a fee is allowed, unless such fee has been paid or tendered.

      (b) The register of deeds shall not record any plat unless such plat is
accompanied by a receipt from the county treasurer for all real estate
taxes of any year past due and unpaid and: (1) Payment of at least the
first half of all real estate taxes due and owing on land to be platted if
such plat is presented for recording between December 20 and June 20
of the next year; or (2) payment of all such real estate taxes if such plat
is presented for recording on and after June 20 but before December 20
of the same year.

      (c) The record of plats and indexes required by this section may be
kept in bound paper books, plat cabinets or in another manner the manner
provided by K.S.A. 19-1204, and amendments thereto or as otherwise
authorized by statute.

      Sec.  5. K.S.A. 79-412 is hereby amended to read as follows: 79-412.
It shall be the duty of the county or district appraiser to value the land
and improvements; but the value of the land and improvements shall be
entered on the assessment roll in a single aggregate, except as hereinafter
provided. Improvements owned by entities other than a city and located
on land owned by a city may the owner of the land shall be assessed to
the owners of such improvements, and the if the lease agreement has been
recorded or filed in the office of the register of deeds. Delinquent taxes
imposed on such improvements may be collected by levy and sale of the
interests of such owners the same as in cases of the collection of taxes on
personal property.

      Sec.  6. K.S.A. 79-1460, as amended by section 3 of 1999 Senate Bill
No. 11, is hereby amended to read as follows: 79-1460. (a) The county
appraiser shall notify each taxpayer in the county annually on or before
March 1 for real property and May 1 for personal property, by mail di-
rected to the taxpayer's last known address, of the classification and ap-
praised valuation of the taxpayer's property, except that, the valuation for
all real property shall not be increased unless: (1) The record of the latest
physical inspection was reviewed by the county or district appraiser, and
documentation exists to support such increase in valuation in compliance
with the directives and specifications of the director of property valuation,
and such record and documentation is available to the affected taxpayer;
and (2) for the taxable year next following the taxable year that the val-
uation for real property has been reduced due to a final determination
made pursuant to the valuation appeals process, documented substantial
and compelling reasons exist therefor and are provided by the county
appraiser. For the purposes of this section and in the case of real property,
the term ``taxpayer'' shall be deemed to be the person in ownership of
the property as indicated on the records of the office of register of deeds
or county clerk and, in the case where the real property or improvement
thereon is the subject of a lease agreement, such term shall also be deemed
to include the lessee of such property if the lease agreement has been
recorded or filed in the office of the register of deeds. Such notice shall
specify separately both the previous and current appraised and assessed
values for each property class identified on the parcel. Such notice shall
also contain the uniform parcel identification number prescribed by the
director of property valuation. Such notice shall also contain a statement
of the taxpayer's right to appeal, the procedure to be followed in making
such appeal and the availability without charge of the guide devised pur-
suant to subsection (b). Such notice may, and if the board of county
commissioners so require, shall provide the parcel identification number,
address and the sale date and amount of any or all sales utilized in the
determination of appraised value of residential real property. In any year
in which no change in appraised valuation of any real property from its
appraised valuation in the next preceding year is determined, an alter-
native form of notification which has been approved by the director of
property valuation may be utilized by a county. Failure to timely mail or
receive such notice shall in no way invalidate the classification or ap-
praised valuation as changed. The secretary of revenue shall adopt rules
and regulations necessary to implement the provisions of this section.

      (b) For all taxable years commencing after December 31, 1999, there
shall be provided to each taxpayer, upon request, a guide to the property
tax appeals process. The director of the division of property valuation
shall devise and publish such guide, and shall provide sufficient copies
thereof to all county appraisers. Such guide shall include but not be lim-
ited to: (1) A restatement of the law which pertains to the process and
practice of property appraisal methodology, including the contents of
K.S.A. 79-503a and 79-1460, and amendments thereto; (2) the procedures
of the appeals process, including the order and burden of proof of each
party and time frames required by law; and (3) such other information
deemed necessary to educate and enable a taxpayer to properly and com-
petently pursue an appraisal appeal.

      Sec.  7. K.S.A. 1998 Supp. 74-2433f is hereby amended to read as
follows: 74-2433f. On and after January 1, 1999, (a) There shall be a
division of the state board of tax appeals known as the small claims divi-
sion. Hearing officers appointed by the executive director shall have au-
thority to hear and decide cases heard in the small claims division.

      (b) At the election of the taxpayer, the small claims division shall have
jurisdiction over: (1) Any appeal of a decision, finding, order or ruling of
the director of taxation, except an appeal, finding, order or ruling relating
to an assessment issued pursuant to K.S.A. 79-5201 et seq., and amend-
ments thereto, in which the amount of tax in controversy does not exceed
$15,000; (2) hearing and deciding applications for the refund of protested
taxes under the provisions of K.S.A. 79-2005, and amendments thereto,
where the value of the property, other than property devoted to agricul-
tural use, is less than $2,000,000 as reflected on the valuation notice or
the property constitutes single family residential property; or (3) hearing
and deciding appeals from decisions rendered pursuant to the provisions
of K.S.A. 79-1448, and amendments thereto, and of article 16 or 17 of
chapter 79 of the Kansas Statutes Annotated, and acts amendatory thereof
or supplemental thereto, other than those relating to land devoted to
agricultural use, wherein the value of the property is less than $2,000,000
as reflected on the valuation notice or the property constitutes single
family residental property.

      (c) In accordance with the provisions of K.S.A. 74-2438, and amend-
ments thereto, any party may elect to appeal any application or decision
referenced in subsection (b) to the state board of tax appeals. The filing
of an appeal with the small claims division shall not be a prerequisite for
filing an appeal with the state board of tax appeals under this section.
Final decisions of the small claims division may be appealed to the state
board of tax appeals. An appeal of a decision of the small claims division
to the state board of tax appeals shall be de novo.

      (d) A taxpayer shall commence a proceeding in the small claims di-
vision by filing a notice of appeal in the form prescribed by the rules of
the state board of tax appeals which shall state the nature of the taxpayer's
claim. Notice of appeal shall be provided to the appropriate unit of gov-
ernment named in the notice of appeal by the taxpayer. In any valuation
appeal or tax protest commenced pursuant to Articles 14 and 20 of chap-
ter 79 of the Kansas Statutes Annotated, and amendments thereto, the
hearing shall be conducted in the county where the property is located
or a county adjacent thereto. In any appeal from a final determination by
the secretary of revenue, the hearing shall be conducted in the county in
which the taxpayer resides or a county adjacent thereto.

      (e) The hearing in the small claims division shall be informal. The
hearing officer may hear any testimony and receive any evidence the
hearing officer deems necessary or desirable for a just determination of
the case. A hearing officer shall have the authority to administer oaths in
all matters before the hearing officer. All testimony shall be given under
oath. A party may appear personally or may be represented by an attorney,
a certified public accountant, a certified general appraiser, a member of
the taxpayer's immediate family or an authorized employee of the tax-
payer. No transcript of the proceedings shall be kept.

      (f) The hearing in the small claims division shall be conducted within
60 days after the appeal is filed in the small claims division. A decision
shall be rendered by the hearing officer within 30 days after the hearing
is concluded. Documents provided by a taxpayer or county or district
appraiser shall be returned to the taxpayer or the county or district ap-
praiser by the hearing officer and shall not become a part of the board's
permanent records. Documents provided to the hearing officer shall be
confidential and may not be disclosed, except as otherwise specifically
provided.

      (g) With regard to any matter properly submitted to the division re-
lating to the determination of valuation of property for taxation purposes,
it shall be the duty of the county appraiser to initiate the production of
evidence to demonstrate, by a preponderance of the evidence, the validity
and correctness of such determination. No presumption shall exist in fa-
vor of the county appraiser with respect to the validity and correctness of
such determination.

      Sec.  8. K.S.A. 1998 Supp. 74-2438 is hereby amended to read as
follows: 74-2438. An appeal may be taken to the state board of tax appeals
from any finding, ruling, order, decision, final determination or other final
action, including action relating to abatement or reduction of penalty and
interest, on any case of the secretary of revenue or the secretary's des-
ignee by any person aggrieved thereby. Notice of such appeal shall be
filed with the secretary of the board within 30 days after such finding,
ruling, order, decision, final determination or other action on a case, and
a copy served upon the secretary of revenue or the secretary's designee.
Upon receipt of a timely appeal, the board shall conduct a hearing in
accordance with the provisions of the Kansas administrative procedure
act. The hearing before the board shall be a de novo hearing unless the
parties agree to submit the case on the record made before the secretary
of revenue or the secretary's designee. With regard to any matter properly
submitted to the board relating to the determination of valuation of res-
idential property or real property used for commercial and industrial
purposes for taxation purposes, it shall be the duty of the county or district
appraiser to initiate the production of evidence to demonstrate, by a pre-
ponderance of the evidence, the validity and correctness of such deter-
mination, except that no such duty shall accrue with regard to leased
commercial and industrial property unless the property owner has fur-
nished to the county or district appraiser a complete income and expense
statement for the property for the three years next preceding the year of
appeal. No presumption shall exist in favor of the county or district ap-
praiser with respect to the validity and correctness of such determination.
No interest shall accrue on the amount of the assessment of tax subject
to any such appeal beyond 120 days after the date the matter was fully
submitted, except that, if a final order is issued within such time period,
interest shall continue to accrue until such time as the tax liability is fully
satisfied, and if a final order is issued beyond such time period, interest
shall recommence to accrue from the date of such order until such time
as the tax liability is fully satisfied.

      Sec.  9. K.S.A. 79-1606 is hereby amended to read as follows: 79-
1606. (a) The county or district appraiser, hearing officer or panel and
arbitrator shall adopt, use and maintain the following records, the form
and method of use of which shall be prescribed by the director of property
valuation: (1) Appeal form, (2) hearing docket, and (3) record of cases,
including the disposition thereof.

      (b) The county clerk shall furnish appeal forms to any taxpayer who
desires to appeal the final determination of the county or district appraiser
as provided in K.S.A. 79-1448, and amendments thereto. Any such appeal
shall be in writing and filed with the county clerk within 18 days of the
date that the final determination of the appraiser was mailed to the tax-
payer.

      (c) The hearing officer or panel shall hear and determine any appeal
made by any taxpayer or such taxpayer's agent or attorney. All such hear-
ings shall be held in a suitable place in the county or district. Sufficient
evening and Saturday hearings shall be provided as shall be necessary to
hear all parties making requests for hearings at such times.

      (d) Every appeal so filed shall be set for hearing by the hearing officer
or panel, which hearing shall be held on or before July 1, and the hearing
officer or panel shall have no authority to be in session thereafter, except
as provided in K.S.A. 79-1404, and amendments thereto. The county clerk
shall notify each appellant and the county or district appraiser of the date
for hearing of the taxpayer's appeal at least 10 days in advance of such
hearing. It shall be the duty of the county or district appraiser to initiate
the production of evidence to demonstrate, by a preponderance of the
evidence, the validity and correctness of the classification or appraisal of
residential property or real property used for commercial and industrial
purposes, except that no such duty shall accrue with regard to leased
commercial and industrial property unless the property owner has fur-
nished to the county or district appraiser a complete income and expense
statement for the property for the three years next proceeding the year of
appeal. No presumption shall exist in favor of the county or district ap-
praiser with respect to the validity or correctness of any such classification
or valuation. Every such appeal shall be determined by order of the hear-
ing officer or panel, and such order shall be recorded in the minutes of
such hearing officer or panel on or before July 5. Such recorded orders
and minutes shall be open to public inspection. Notice as to disposition
of the appeal shall be mailed by the county clerk to the taxpayer and the
county or district appraiser within five days after the determination.

      Sec.  10. K.S.A. 79-1609 is hereby amended to read as follows: 79-
1609. Any person aggrieved by any order of the hearing officer or panel
may appeal to the state board of tax appeals by filing a written notice of
appeal, on forms approved by the state board of tax appeals and provided
by the county clerk for such purpose, stating the grounds thereof and a
description of any comparable property or properties and the appraisal
thereof upon which they rely as evidence of inequality of the appraisal of
their property, if that be a ground of the appeal, with the board of tax
appeals and by filing a copy thereof with the county clerk within 30 days
after the date of the order from which the appeal is taken. A county or
district appraiser may appeal to the state board of tax appeals from any
order of the hearing officer or panel. With regard to any matter properly
submitted to the board relating to the determination of valuation of res-
idential property or real property used for commercial and industrial
purposes for taxation purposes, it shall be the duty of the county appraiser
to initiate the production of evidence to demonstrate, by a preponderance
of the evidence, the validity and correctness of such determination except
that no such duty shall accrue with regard to leased commercial and
industrial property unless the property owner has furnished to the county
or district appraiser a complete income and expense statement for the
property for the three years next preceding the year of appeal. No pre-
sumption shall exist in favor of the county appraiser with respect to the
validity and correctness of such determination.

      Sec.  11. K.S.A. 79-2005 is hereby amended to read as follows: 79-
2005. (a) Any taxpayer, before protesting the payment of such taxpayer's
taxes, shall be required, either at the time of paying such taxes, or, if the
whole or part of the taxes are paid prior to December 20, no later than
December 20, or, with respect to taxes paid in whole on or before De-
cember 20 by an escrow or tax service agent, no later than January 31 of
the next year, to file a written statement with the county treasurer, on
forms approved by the state board of tax appeals and provided by the
county treasurer, clearly stating the grounds on which the whole or any
part of such taxes are protested and citing any law, statute or facts on
which such taxpayer relies in protesting the whole or any part of such
taxes. When the grounds of such protest is that the valuation or assess-
ment of the property upon which the taxes are levied is illegal or void,
the county treasurer shall forward a copy of the written statement of
protest to the county appraiser who shall within 15 days of the receipt
thereof, schedule an informal meeting with the taxpayer or such tax-
payer's agent or attorney with reference to the property in question. The
county appraiser shall review the appraisal of the taxpayer's property with
the taxpayer or such taxpayer's agent or attorney and may change the
valuation of the taxpayer's property, if in the county appraiser's opinion
a change in the valuation of the taxpayer's property is required to assure
that the taxpayer's property is valued according to law, and shall, within
15 business days thereof, notify the taxpayer in the event the valuation of
the taxpayer's property is changed, in writing of the results of the meeting.
In the event the valuation of the taxpayer's property is changed and such
change requires a refund of taxes and interest thereon, the county trea-
surer shall process the refund in the manner provided by subsection (l).

      (b) No protest appealing the valuation or assessment of property shall
be filed pertaining to any year's valuation or assessment when an appeal
of such valuation or assessment was commenced pursuant to K.S.A. 79-
1448, and amendments thereto, nor shall the second half payment of taxes
be protested when the first half payment of taxes has been protested.
Notwithstanding the foregoing, this provision shall not prevent any sub-
sequent owner from protesting taxes levied for the year in which such
property was acquired, nor shall it prevent any taxpayer from protesting
taxes when the valuation or assessment of such taxpayer's property has
been changed pursuant to an order of the director of property valuation.

      (c) A protest shall not be necessary to protect the right to a refund
of taxes in the event a refund is required because the final resolution of
an appeal commenced pursuant to K.S.A. 79-1448, and amendments
thereto, occurs after the final date prescribed for the protest of taxes.

      (d) If the grounds of such protest shall be that the valuation or as-
sessment of the property upon which the taxes so protested are levied is
illegal or void, such statement shall further state the exact amount of
valuation or assessment which the taxpayer admits to be valid and the
exact portion of such taxes which is being protested.

      (e) If the grounds of such protest shall be that any tax levy, or any
part thereof, is illegal, such statement shall further state the exact portion
of such tax which is being protested.

      (f) Upon the filing of a written statement of protest, the grounds of
which shall be that any tax levied, or any part thereof, is illegal, the county
treasurer shall mail a copy of such written statement of protest to the
state board of tax appeals and the governing body of the taxing district
making the levy being protested.

      (g) Within 30 days after notification of the results of the informal
meeting with the county appraiser pursuant to subsection (a), the pro-
testing taxpayer may, if aggrieved by the results of the informal meeting
with the county appraiser, appeal such results to the state board of tax
appeals.

      (h) After examination of the copy of the written statement of protest
and a copy of the written notification of the results of the informal meet-
ing with the county appraiser in cases where the grounds of such protest
is that the valuation or assessment of the property upon which the taxes
are levied is illegal or void, the board shall conduct a hearing in accord-
ance with the provisions of the Kansas administrative procedure act, un-
less waived by the interested parties in writing. If the grounds of such
protest is that the valuation or assessment of the property is illegal or void
the board shall notify the county appraiser thereof.

      (i) In the event of a hearing, the same shall be originally set not later
than 90 days after the filing of the copy of the written statement of protest
and a copy, when applicable, of the written notification of the results of
the informal meeting with the county appraiser with the board. With
regard to any matter properly submitted to the board relating to the
determination of valuation of residential property or real property used
for commercial and industrial purposes for taxation purposes, it shall be
the duty of the county appraiser to initiate the production of evidence to
demonstrate, by a preponderance of the evidence, the validity and cor-
rectness of such determination except that no such duty shall accrue to
the county or district appraiser with regard to leased commercial and
industrial property unless the property owner has furnished to the county
or district appraiser a complete income and expense statement for the
property for the three years next preceding the year of appeal. No pre-
sumption shall exist in favor of the county appraiser with respect to the
validity and correctness of such determination. In all instances where the
board sets a request for hearing and requires the representation of the
county by its attorney or counselor at such hearing, the county shall be
represented by its county attorney or counselor.

      (j) When a determination is made as to the merits of the tax protest,
the board shall render and serve its order thereon. The county treasurer
shall notify all affected taxing districts of the amount by which tax reve-
nues will be reduced as a result of a refund.

      (k) If a protesting taxpayer fails to file a copy of the written statement
of protest and a copy, when applicable, of the written notification of the
results of the informal meeting with the county appraiser with the board
within the time limit prescribed, such protest shall become null and void
and of no effect whatsoever.

      (l)  (1) In the event the board orders that a refund be made pursuant
to this section or the provisions of K.S.A. 79-1609, and amendments
thereto, or a court of competent jurisdiction orders that a refund be made,
and no appeal is taken from such order, or in the event a change in
valuation which results in a refund pursuant to subsection (a), the county
treasurer shall, as soon thereafter as reasonably practicable, refund to the
taxpayer such protested taxes and, with respect to protests or appeals
commenced after the effective date of this act, interest computed at the
rate prescribed by K.S.A. 79-2968, and amendments thereto, minus two
percentage points, per annum from the date of payment of such taxes
from tax moneys collected but not distributed. Upon making such refund,
the county treasurer shall charge the fund or funds having received such
protested taxes, except that, with respect to that portion of any such re-
fund attributable to interest the county treasurer shall charge the county
general fund. In the event that the board or court finds that any time
delay in making its decision is unreasonable and is attributable to the
taxpayer, it may order that no interest or only a portion thereof be added
to such refund of taxes.

      (2) No interest shall be allowed pursuant to paragraph (1) in any case
where the tax paid under protest was inclusive of delinquent taxes.

      (m) Whenever, by reason of the refund of taxes previously received
or the reduction of taxes levied but not received as a result of decreases
in assessed valuation, it will be impossible to pay for imperative functions
for the current budget year, the governing body of the taxing district
affected may issue no-fund warrants in the amount necessary. Such war-
rants shall conform to the requirements prescribed by K.S.A. 79-2940,
and amendments thereto, except they shall not bear the notation required
by such section and may be issued without the approval of the state board
of tax appeals. The governing body of such taxing district shall make a tax
levy at the time fixed for the certification of tax levies to the county clerk
next following the issuance of such warrants sufficient to pay such war-
rants and the interest thereon. All such tax levies shall be in addition to
all other levies authorized by law.

      (n) The county treasurer shall disburse to the proper funds all por-
tions of taxes paid under protest and shall maintain a record of all portions
of such taxes which are so protested and shall notify the governing body
of the taxing district levying such taxes thereof and the director of ac-
counts and reports if any tax protested was levied by the state.

      (o) This statute shall not apply to the valuation and assessment of
property assessed by the director of property valuation and it shall not be
necessary for any owner of state assessed property, who has an appeal
pending before the board of tax appeals, to protest the payment of taxes
under this statute solely for the purpose of protecting the right to a refund
of taxes paid under protest should that owner be successful in that appeal.

      Sec.  12. K.S.A. 75-5133 is hereby amended to read as follows: 75-
5133. (a) Except as otherwise more specifically provided by law, all in-
formation received by the director of taxation from applications for licen-
sure or registration made or returns or reports filed under the provisions
of any law imposing any excise tax administered by the director, or from
any investigation conducted under such provisions, shall be confidential,
and it shall be unlawful for any officer or employee of the department of
revenue to divulge any such information except in accordance with other
provisions of law respecting the enforcement and collection of such tax,
in accordance with proper judicial order and as provided in K.S.A. 74-
2424, and amendments thereto.

      (b) Nothing in this section shall be construed to prohibit the publi-
cation of statistics, so classified as to prevent identification of particular
reports or returns and the items thereof, or the inspection of returns by
the attorney general. Nothing in this section shall prohibit the post auditor
from access to all such excise tax reports or returns in accordance with
and subject to the provisions of subsection (g) of K.S.A. 46-1106, and
amendments thereto. Nothing in this section shall be construed to pro-
hibit the disclosure of taxpayer information from excise tax returns to
persons or entities contracting with the secretary of revenue where the
secretary has determined disclosure of such information is essential for
completion of the contract and has taken appropriate steps to preserve
confidentiality.

      (c) Notwithstanding the foregoing provisions of this section, the di-
rector of taxation may provide such information from returns and reports
filed under article 42 of chapter 79 of the Kansas Statutes Annotated to
county appraisers as is necessary to insure proper valuations of property.
Information from such returns and reports may also be exchanged with
any other state agency administering and collecting conservation or other
taxes and fees imposed on or measured by mineral production. Nothing
in this section shall prohibit the disclosure of the following oil and gas
production statistics received by the department of revenue in accordance
with K.S.A. 79-4216 et seq. and amendments thereto: Volumes of pro-
duction by well name, well number, operator's name and identification
number assigned by the state corporation commission, lease name, lease-
hold property description, county of production or zone of production,
name of purchaser and purchaser's tax identification number assigned by
the department of revenue, name of transporter, field code number or
lease code, tax period, exempt production volumes by well name or lease,
or any combination of this information.

      (d) Any person receiving any information under the provisions of sub-
section (b) or (c) shall be subject to the confidentiality provisions of sub-
section (a) and to the penalty provisions of subsection (e).

      (e) Any violation of this section shall be a class B nonperson misde-
meanor, and if the offender is an officer or employee of this state, such
officer or employee shall be dismissed from office.

      Sec.  13. K.S.A. 1998 Supp. 79-213 is hereby amended to read as
follows: 79-213. (a) Any property owner requesting an exemption from
the payment of ad valorem property taxes assessed, or to be assessed,
against their property shall be required to file an initial request for ex-
emption, on forms approved by the board of tax appeals and provided by
the county appraiser.

      (b) The initial exemption request shall identify the property for which
the exemption is requested and state, in detail, the legal and factual basis
for the exemption claimed.

      (c) The request for exemption shall be filed with the county appraiser
of the county where such property is principally located.

      (d) After a review of the exemption request, and after a preliminary
examination of the facts as alleged, the county appraiser shall recommend
that the exemption request either be granted or denied, and, if necessary,
that a hearing be held. If a denial is recommended, a statement of the
controlling facts and law relied upon shall be included on the form.

      (e) The county appraiser, after making such written recommenda-
tion, shall file the request for exemption and the recommendations of the
county appraiser with the board of tax appeals.

      (f) Upon receipt of the request for exemption, the board shall docket
the same and notify the applicant and the county appraiser of such fact.

      (g) After examination of the request for exemption, and the county
appraiser's recommendation related thereto, the board may fix a time and
place for hearing, and shall notify the applicant and the county appraiser
of the time and place so fixed. A request for exemption pursuant to: (1)
Section 13 of article 11 of the Kansas constitution; or (2) K.S.A. 79-201a
Second, and amendments thereto, for property constructed or purchased,
in whole or in part, with the proceeds of revenue bonds under the au-
thority of K.S.A. 12-1740 to 12-1749, inclusive, and amendments thereto,
prepared in accordance with instructions and assistance which shall be
provided by the department of commerce and housing, shall be deemed
approved unless scheduled for hearing within 30 days after the date of
receipt of all required information and data relating to the request for
exemption, and such hearing shall be conducted within 90 days after such
date. Such time periods shall be determined without regard to any ex-
tension or continuance allowed to either party to such request. In any
case where a party to such request for exemption requests a hearing
thereon, the same shall be granted. Hearings shall be conducted in ac-
cordance with the provisions of the Kansas administrative procedure act.
In all instances where the board sets a request for exemption for hearing,
the county shall be represented by its county attorney or county coun-
selor.

      (h)  Except as otherwise provided by subsection (g), in the event of
a hearing, the same shall be originally set not later than 90 days after the
filing of the request for exemption with the board.

      (i) During the pendency of a request for exemption, no person, firm,
unincorporated association, company or corporation charged with real
estate or personal property taxes pursuant to K.S.A. 79-2004 and 79-
2004a, and amendments thereto, on the tax books in the hands of the
county treasurer shall be required to pay the tax from the date the request
is filed with the county appraiser until the expiration of 30 days after the
board issued its order thereon and the same becomes a final order. In
the event that taxes have been assessed against the subject property, no
interest shall accrue on any unpaid tax for the year or years in question
nor shall the unpaid tax be considered delinquent from the date the re-
quest is filed with the county appraiser until the expiration of 30 days
after the board issued its order thereon. In the event the board deter-
mines an application for exemption is without merit and filed in bad faith
to delay the due date of the tax, the tax shall be considered delinquent
as of the date the tax would have been due pursuant to K.S.A. 79-2004
and 79-2004a, and amendments thereto, and interest shall accrue as pre-
scribed therein.

      (j) In the event the board grants the initial request for exemption,
the same shall be effective beginning with the date of first exempt use
except that, with respect to property the construction of which com-
menced not to exceed 24 months prior to the date of first exempt use,
the same shall be effective beginning with the date of commencement of
construction.

      (k) In conjunction with its authority to grant exemptions, the board
shall have the authority to abate all unpaid taxes that have accrued from
and since the effective date of the exemption. In the event that taxes have
been paid during the period where the subject property has been deter-
mined to be exempt, the board shall have the authority to order a refund
of taxes for a period not to exceed three years.

      (l) The provisions of this section shall not apply to: (1) Farm machin-
ery and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
and amendments thereto; (2) personal property exempted from ad valo-
rem taxation by K.S.A. 79-215, and amendments thereto; (3) wearing
apparel, household goods and personal effects exempted from ad valorem
taxation by K.S.A. 79-201c, and amendments thereto; (4) livestock; (5)
hay and silage exempted from ad valorem taxation by K.S.A. 79-201d, and
amendments thereto; (6) merchants' and manufacturers' inventories ex-
empted from ad valorem taxation by K.S.A. 79-201m and amendments
thereto; (7) grain exempted from ad valorem taxation by K.S.A. 79-201n,
and amendments thereto; (8) property exempted from ad valorem taxa-
tion by K.S.A. 79-201a Seventeenth and amendments thereto, including
all property previously acquired by the secretary of transportation or a
predecessor in interest, which is used in the administration, construction,
maintenance or operation of the state system of highways. The secretary
of transportation shall at the time of acquisition of property notify the
county appraiser in the county in which the property is located that the
acquisition occurred and provide a legal description of the property ac-
quired; (9) property exempted from ad valorem taxation by K.S.A. 79-
201a Ninth, and amendments thereto, including all property previously
acquired by the Kansas turnpike authority which is used in the adminis-
tration, construction, maintenance or operation of the Kansas turnpike.
The Kansas turnpike authority shall at the time of acquisition of property
notify the county appraiser in the county in which the property is located
that the acquisition occurred and provide a legal description of the prop-
erty acquired; (10) aquaculture machinery and equipment exempted from
ad valorem taxation by K.S.A. 79-201j, and amendments thereto. As used
in this section, ``aquaculture'' has the same meaning ascribed thereto by
K.S.A. 47-1901, and amendments thereto; (11) Christmas tree machinery
and equipment exempted from ad valorem taxation by K.S.A. 79-201j,
and amendments thereto; (12) property used exclusively by the state or
any municipality or political subdivision of the state for right-of-way pur-
poses. The state agency or the governing body of the municipality or
political subdivision shall at the time of acquisition of property for right-
of-way purposes notify the county appraiser in the county in which the
property is located that the acquisition occurred and provide a legal de-
scription of the property acquired; (13) machinery, equipment, materials
and supplies exempted from ad valorem taxation by K.S.A. 79-201w, and
amendments thereto; (14) vehicles owned by the state or by any political
or taxing subdivision thereof and used exclusively for governmental pur-
poses; and (15) property used for residential purposes which is exempted
pursuant to K.S.A. 79-201x from the property tax levied pursuant to
K.S.A. 72-6431, and amendments thereto; (16) from and after July 1,
1998, vehicles which are owned by an organization having as one of its
purposes the assistance by the provision of transit services to the elderly
and to disabled persons and which are exempted pursuant to K.S.A. 79-
201 Ninth; and (17) from and after July 1, 1998, motor vehicles exempted
from taxation by subsection (e) of K.S.A. 79-5107, and amendments
thereto.

      (m) The provisions of this section shall apply to property exempt pur-
suant to the provisions of section 13 of article 11 of the Kansas consti-
tution.

      (n) The provisions of subsection (j) and (k) as amended by this act
shall be applicable to all taxable years commencing after December 31,
1995.

 Sec.  14. K.S.A. 19-1207, 66-104c, 75-3038, 75-3039, 75-3040, 75-
3042, 75-5133, 79-201j, 79-412, 79-5a01, 79-1460, as amended by section
3 of 1999 Senate Bill No. 11, 79-1606, 79-1609 and 79-2005 and K.S.A.
1998 Supp. 74-2433f, 74-2438 and 79-213 are hereby repealed.

 Sec.  15. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 25, 1999.
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