CHAPTER 139 SENATE BILL No. 12 An Act relating to property taxation; amending K.S.A. 1999 Supp. 74-2433, 74-2433f, 79-
201, 79-201j, 79-1448, 79-1476 and 79-1606 and repealing the existing sections; also
repealing K.S.A. 1999 Supp. 79-5a01b.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 1999 Supp. 74-2433 is hereby amended to read as
follows: 74-2433. (a) There is hereby created a state board of tax appeals,
referred to in this act as the board. The board shall be composed of five
members who shall be appointed by the governor, subject to confirmation
by the senate as provided in K.S.A. 75-4315b, and amendments thereto.
After January 15, 1999, three of such members shall: (1) Have been reg-
ularly admitted to practice law in the state of Kansas; and (2) for a period
of at least five years, have engaged in the active practice of law as a lawyer,
judge of a court of record or any other court in this state, or as a certified
public accountant who has maintained registration as an active attorney
with the Kansas supreme court, or any combination thereof. Except as
provided by K.S.A. 1999 Supp. 46-2601, no person appointed to the board
shall exercise any power, duty or function as a member of the board until
confirmed by the senate. Not more than three members of the board
shall be of the same political party. Members of the board shall be resi-
dents of the state. Subject to the provisions of K.S.A. 75-4315c, and
amendments thereto, one shall be appointed from each of the congres-
sional districts of Kansas and the remainder from the state at large. The
members of the board shall be selected with special reference to training
and experience for duties imposed by this act and shall be individuals with
legal, accounting or appraisal training and experience. Members shall be
subject to the supreme court rules of judicial conduct applicable to all
judges of the district court. The board shall be bound by the doctrine of
stare decisis limited to published decisions of an appellate court other
than a district court. Members shall hold office for terms of four years
and until their successors are appointed and confirmed. Such terms of
office shall expire on January 15 of the last year of such term. If a vacancy
occurs on the board, the governor shall appoint a successor to fill the
vacancy for the unexpired term. The governor shall select one of its mem-
bers to serve as chairperson. The votes of three members shall be re-
quired for any action to be taken by the board. Meetings may be called
by the chairperson and shall be called on request of a majority of the
members of the board and when otherwise prescribed by statute.

      (b) Any member of the state board of tax appeals may be removed
by the governor for cause, after public hearing conducted in accordance
with the provisions of the Kansas administrative procedure act.

      (c) The state board of tax appeals shall appoint, subject to approval
by the governor, an executive director of the board, to serve at the plea-
sure of the board. The executive director shall: (1) Be in the unclassified
service under the Kansas civil service act; (2) devote full time to the
executive director's assigned duties; (3) receive such compensation as
determined by the board, subject to the limitations of appropriations
thereof; and (4) have familiarity with the tax appeals process sufficient to
fulfill the duties of the office of executive director. The executive director
shall perform such duties as directed by the board.

      (d) Appeals decided by the state board of tax appeals which are
deemed of sufficient importance to be published shall be prepared and
delivered to the director of printing, who shall as speedily as possible
print and publish such number of copies as shall be specified published
by the board.

      (e) After appointment, members of the state board of tax appeals shall
complete the following course requirements: (1) A tested appraisal course
of not less than 30 clock hours of instruction consisting of the fundamen-
tals of real property appraisal with an emphasis on the cost and sales
approaches to value; (2) a tested appraisal course of not less than 30 clock
hours of instruction consisting of the fundamentals of real property ap-
praisal with an emphasis on the income approach to value; (3) a tested
appraisal course of not less than 30 clock hours of instruction with an
emphasis on mass appraisal; (4) an appraisal course with an emphasis on
Kansas property tax laws and; (5) an appraisal course on the techniques
and procedures for the valuation of state assessed properties with an em-
phasis on unit valuation; and (6) a tested appraisal course on the tech-
niques and procedures for the valuation of land devoted to agricultural
use pursuant to K.S.A. 79-1476, and amendments thereto. The executive
director shall adopt rules and regulations prescribing a timetable for the
completion of the course requirements and prescribing continued edu-
cation requirements for members of the board.

      (f) The state board of tax appeals shall have no capacity or power to
sue or be sued.

      Sec.  2. K.S.A. 1999 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) The small claims division shall have jurisdiction over hearing and
deciding applications for the refund of protested taxes under the provi-
sions of K.S.A. 79-2005, and amendments thereto, and hearing and de-
ciding appeals from decisions rendered pursuant to the provisions of
K.S.A. 79-1448, and amendments thereto, and of article 16 of chapter 79
of the Kansas Statutes Annotated, and acts amendatory thereof or sup-
plemental thereto, with regard to single-family residential property. The
filing of an appeal with the small claims division shall be a prerequisite
for filing an appeal with the state board of tax appeals for appeals in-
volving single-family residential property.

      (c) 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) (d) In accordance with the provisions of K.S.A. 74-2438, and
amendments thereto, any party may elect to appeal any application or
decision referenced in subsection (b) to the state board of tax appeals.
Except as provided in subsection (b) regarding single-family residential
property, 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) (e) A taxpayer shall commence a proceeding in the small claims
division 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 tax-
payer's claim. Notice of appeal shall be provided to the appropriate unit
of government named in the notice of appeal by the taxpayer. In any
valuation appeal or tax protest commenced pursuant to articles 14 and 20
of chapter 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) (f) 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 tax repre-
sentative or agent, a member of the taxpayer's immediate family or an
authorized employee of the taxpayer. A county or unified government
may be represented by the county appraiser, designee of the county ap-
praiser, county attorney or counselor or other representatives so desig-
nated. No transcript of the proceedings shall be kept.

      (f) (g) The hearing in the small claims division shall be conducted
within 60 days after the appeal is filed in the small claims division unless
such time period is waived by the taxpayer. A decision shall be rendered
by the hearing officer within 30 days after the hearing is concluded and,
in cases arising from appeals described by subsections (b) and (c)(2) and
(3), shall be accompanied by a written explanation of the reasoning upon
which such decision is based. Documents provided by a taxpayer or
county or district appraiser shall be returned to the taxpayer or the county
or district appraiser by the hearing officer and shall not become a part of
the board's permanent records. Documents provided to the hearing of-
ficer shall be confidential and may not be disclosed, except as otherwise
specifically provided.

      (g) (h) With regard to any matter properly submitted to the division
relating to the determination of valuation of property for taxation pur-
poses, 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 favor of the county appraiser with respect to the validity and correctness
of such determination.

      Sec.  3. K.S.A. 1999 Supp. 79-201 is hereby amended to read as fol-
lows: 79-201. The following described property, to the extent herein spec-
ified, shall be and is hereby exempt from all property or ad valorem taxes
levied under the laws of the state of Kansas:

      First. All buildings used exclusively as places of public worship and all
buildings used exclusively by school districts and school district interlocal
cooperatives organized under the laws of this state, with the furniture and
books therein contained and used exclusively for the accommodation of
religious meetings or for school district or school district interlocal co-
operative purposes, whichever is applicable, together with the grounds
owned thereby if not leased or otherwise used for the realization of profit,
except that: (a) (1) Any school building, or portion thereof, together with
the grounds upon which the building is located, shall be considered to be
used exclusively by the school district for the purposes of this section
when leased by the school district to any political or taxing subdivision of
the state, including a school district interlocal cooperative, or to any as-
sociation, organization or nonprofit corporation entitled to tax exemption
with respect to such property; and (2) any school building, together with
the grounds upon which the building is located, shall be considered to be
used exclusively by a school district interlocal cooperative for the purposes
of this section when being acquired pursuant to a lease-purchase agree-
ment; and (b) any building, or portion thereof, used as a place of worship,
together with the grounds upon which the building is located, shall be
considered to be used exclusively for the religious purposes of this section
when used as a not-for-profit day care center for children which is li-
censed pursuant to K.S.A. 65-501 et seq., and amendments thereto, or
when used to house an area where the congregation of a church society
and others may purchase tracts, books and other items relating to the
promulgation of the church society's religious doctrines.

      Second. All real property, and all tangible personal property, actually
and regularly used exclusively for literary, educational, scientific, relig-
ious, benevolent or charitable purposes, including property used exclu-
sively for such purposes by more than one agency or organization for one
or more of such exempt purposes. Except with regard to real property
which is owned by a religious organization, is to be used exclusively for
religious purposes and is not used for a nonexempt purpose prior to its
exclusive use for religious purposes which property shall be deemed to
be actually and regularly used exclusively for religious purposes for the
purposes of this paragraph, this exemption shall not apply to such prop-
erty, not actually used or occupied for the purposes set forth herein, nor
to such property held or used as an investment even though the income
or rentals received therefrom is used wholly for such literary, educational,
scientific, religious, benevolent or charitable purposes. In the event any
such property which has been exempted pursuant to the preceding sen-
tence is not used for religious purposes prior to its conveyance which
results in its use for nonreligious purposes, there shall be a recoupment
of property taxes in an amount equal to the tax which would have been
levied upon such property except for such exemption for all taxable years
for which such exemption was in effect. Such recoupment tax shall be-
come due and payable in such year as provided by K.S.A. 79-2004, and
amendments thereto. A lien for such taxes shall attach to the real property
subject to the same on November 1 in the year such taxes become due
and all such taxes remaining due and unpaid after the date prescribed for
the payment thereof shall be collected in the manner provided by law for
the collection of delinquent taxes. Moneys collected from the recoupment
tax hereunder shall be credited by the county treasurer to the several
taxing subdivisions within which such real property is located in the pro-
portion that the total tangible property tax levies made in the preceding
year for each such taxing subdivision bear to the total of all such levies
made in that year by all such taxing subdivisions. Such moneys shall be
credited to the general fund of the taxing subdivision or if such taxing
subdivision is making no property tax levy for the support of a general
fund such moneys may be credited to any other tangible property tax
fund of general application of such subdivision. This exemption shall not
be deemed inapplicable to property which would otherwise be exempt
pursuant to this paragraph because an agency or organization: (a) Is re-
imbursed for the provision of services accomplishing the purposes enu-
merated in this paragraph based upon the ability to pay by the recipient
of such services; or (b) is reimbursed for the actual expense of using such
property for purposes enumerated in this paragraph; or (c) uses such
property for a nonexempt purpose which is minimal in scope and insub-
stantial in nature if such use is incidental to the exempt purposes of this
paragraph; or (d) charges a reasonable fee for admission to cultural or
educational activities or permits the use of its property for such activities
by a related agency or organization, if any such activity is in furtherance
of the purposes of this paragraph.

      Third. All moneys and credits belonging exclusively to universities, col-
leges, academies or other public schools of any kind, or to religious, lit-
erary, scientific or benevolent and charitable institutions or associations,
appropriated solely to sustain such institutions or associations, not ex-
ceeding in amount or in income arising therefrom the limit prescribed
by the charter of such institution or association.

      Fourth. The reserve or emergency funds of fraternal benefit societies
authorized to do business under the laws of the state of Kansas.

      Fifth. All buildings of private nonprofit universities or colleges which
are owned and operated by such universities and colleges as student union
buildings, presidents' homes and student dormitories.

      Sixth. All real and tangible personal property actually and regularly
used exclusively by the alumni association associated by its articles of
incorporation with any public or nonprofit Kansas college or university
approved by the Kansas board of regents to confer academic degrees or
with any community college approved by its board of trustees to grant
certificates of completion of courses or curriculum, to provide accom-
modations and services to such college or university or to the alumni, staff
or faculty thereof.

      Seventh. All parsonages owned by a church society and actually and
regularly occupied and used predominantly as a residence by a minister
or other clergyman of such church society who is actually and regularly
engaged in conducting the services and religious ministrations of such
society, and the land upon which such parsonage is located to the extent
necessary for the accommodation of such parsonage.

      Eighth. All real property, all buildings located on such property and all
personal property contained therein, actually and regularly used exclu-
sively by any individually chartered organization of honorably discharged
military veterans of the United States armed forces or auxiliary of any
such organization, which is exempt from federal income taxation pursuant
to section 501(c)(19) of the federal internal revenue code of 1986, for
clubhouse, place of meeting or memorial hall purposes, and real property
to the extent of not more than two acres, and all buildings located on
such property, actually and regularly used exclusively by any such veter-
ans' organization or its auxiliary as a memorial park.

      Ninth. All real property and tangible personal property actually and
regularly used by a community service organization for the predominant
purpose of providing humanitarian services, which is owned and operated
by a corporation organized not for profit under the laws of the state of
Kansas or by a corporation organized not for profit under the laws of
another state and duly admitted to engage in business in this state as a
foreign not-for-profit corporation if: (a) The directors of such corporation
serve without pay for such services; (b) the corporation is operated in a
manner which does not result in the accrual of distributable profits, re-
alization of private gain resulting from the payment of compensation in
excess of a reasonable allowance for salary or other compensation for
services rendered or the realization of any other form of private gain; (c)
no officer, director or member of such corporation has any pecuniary
interest in the property for which exemption is claimed; (d) the corpo-
ration is organized for the purpose of providing humanitarian services;
(e) the actual use of property for which an exemption is claimed must be
substantially and predominantly related to the purpose of providing hu-
manitarian services, except that, the use of such property for a nonexempt
purpose which is minimal in scope and insubstantial in nature shall not
result in the loss of exemption if such use is incidental to the purpose of
providing humanitarian services by the corporation; (f) the corporation is
exempt from federal income taxation pursuant to section 501(c)(3) of the
internal revenue code of 1986 and; (g) contributions to the corporation
are deductible under the Kansas income tax act. As used in this clause,
``humanitarian services'' means the conduct of activities which substan-
tially and predominantly meet a demonstrated community need and
which improve the physical, mental, social, cultural or spiritual welfare of
others or the relief, comfort or assistance of persons in distress or any
combination thereof including but not limited to health and recreation
services, child care, individual and family counseling, employment and
training programs for handicapped persons and meals or feeding pro-
grams. Notwithstanding any other provision of this clause, motor vehicles
shall not be exempt hereunder unless such vehicles are exclusively used
for the purposes described therein, except that the use of any such vehicle
for the purpose of participating in a coordinated transit district in ac-
cordance with the provisions of K.S.A. 75-5032 through 75-5037, and
amendments thereto, or K.S.A. 75-5051 through 75-5058, and amend-
ments thereto, shall be deemed as exclusive use.

      Tenth. For all taxable years commencing after December 31, 1986, any
building, and the land upon which such building is located to the extent
necessary for the accommodation of such building, owned by a church or
nonprofit religious society or order which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986, and actually and regularly occupied and used exclusively for
residential and religious purposes by a community of persons who are
bound by vows to a religious life and who conduct or assist in the conduct
of religious services and actually and regularly engage in religious, be-
nevolent, charitable or educational ministrations or the performance of
health care services.

      Eleventh. For all taxable years commencing after December 31, 1998,
all real property upon which is located facilities which utilize renewable
energy resources or technologies for the purpose and as the primary
means to produce and generate electricity and which is used predomi-
nantly for such purpose, to the extent necessary to accommodate such
facilities, and all tangible personal property which comprises such facili-
ties actually and regularly used predominantly to produce and generate
electricity utilizing renewable energy resources or technologies. For pur-
poses of this section, ``renewable energy resources or technologies'' shall
include wind, solar, thermal, photovoltaic, biomass, hydropower, geo-
thermal and landfill gas resources or technologies. For purposes of val-
uation of property subject to valuation under K.S.A. 79-5a01 et seq., and
amendments thereto, the value of the exempt property set forth in this
clause shall be removed from the unit value prior to apportionment under
K.S.A. 79-5a25, and amendments thereto.

      The provisions of this section, except as otherwise more specifically
provided, shall apply to all taxable years commencing after December 31,
1995.

      Sec.  4. K.S.A. 1999 Supp. 79-201j is hereby amended to read as fol-
lows: 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: (1) Machinery and equipment comprising a
natural gas distribution system which is owned and operated by a non-
profit public utility described by K.S.A. 66-104c, and amendments
thereto, and which is operated predominantly for the purpose of provid-
ing fuel for the irrigation of land devoted to agricultural use; and (2) any
greenhouse which is not permanently affixed to real estate and which is
used for a farming or ranching operation. The term ``farming or ranching
operation'' shall include the operation of a feedlot and, the performing
of farm or ranch work for hire and the planting, cultivating and harvesting
of nursery or greenhouse products, or both, for sale or resale. The term
``farm machinery and equipment'' shall not include any passenger vehicle,
truck, truck tractor, trailer, semitrailer 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, 1998 1999.

      (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.  5. K.S.A. 1999 Supp. 79-1448 is hereby amended to read as
follows: 79-1448. Any taxpayer may complain or appeal to the county
appraiser from the classification or appraisal of the taxpayer's property by
giving notice to the county appraiser within 30 days subsequent to the
date of mailing of the valuation notice required by K.S.A. 79-1460, and
amendments thereto, for real property, and on or before May 15 for
personal property. The county appraiser or the appraiser's designee shall
arrange to hold an informal meeting with the aggrieved taxpayer with
reference to the property in question. At such meeting it shall be the duty
of the county appraiser or the county appraiser's designee to initiate pro-
duction of evidence to substantiate the valuation of such property, in-
cluding the affording to the taxpayer of the opportunity to review the data
sheet of comparable sales utilized in the determination of such valuation.
The county appraiser may extend the time in which the taxpayer may
informally appeal from the classification or appraisal of the taxpayer's
property for just and adequate reasons. Except as provided in K.S.A. 79-
1404, and amendments thereto, no informal meeting regarding real prop-
erty shall be scheduled to take place after May 15, nor shall a final de-
termination be given by the appraiser after May 20. Any final
determination shall be accompanied by a written explanation of the rea-
soning upon which such determination is based when such determination
is not in favor of the taxpayer. Any taxpayer who is aggrieved by the final
determination of the county appraiser may appeal to the hearing officer
or panel appointed pursuant to K.S.A. 79-1611, and amendments thereto,
and such hearing officer, or panel, for just cause shown and recorded, is
authorized to change the classification or valuation of specific tracts or
individual items of real or personal property in the same manner provided
for in K.S.A. 79-1606, and amendments thereto. In lieu of appealing to
a hearing officer or panel appointed pursuant to K.S.A. 79-1611, and
amendments thereto, any taxpayer aggrieved by the final determination
of the county appraiser, except with regard 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 residen-
tial property, may appeal to the small claims division of the state board
of tax appeals within the time period prescribed by K.S.A. 79-1606, and
amendments thereto. Any taxpayer who is aggrieved by the final deter-
mination of a hearing officer or panel may appeal to the state board of
tax appeals as provided in K.S.A. 79-1609, and amendments thereto. An
informal meeting with the county appraiser or the appraiser's designee
shall be a condition precedent to an appeal to the county or district hear-
ing panel.

      Sec.  6. K.S.A. 1999 Supp. 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
appraiser with respect to the validity or correctness of any such classifi-
cation or valuation. Every such appeal shall be determined by order of
the hearing officer or panel, and such which shall be accompanied by a
written explanation of the reasoning upon which such order is based. 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.  7. K.S.A. 1999 Supp. 79-1476 is hereby amended to read as
follows: 79-1476. The director of property valuation is hereby directed
and empowered to administer and supervise a statewide program of re-
appraisal of all real property located within the state. Except as otherwise
authorized by K.S.A. 19-428, and amendments thereto, each county shall
comprise a separate appraisal district under such program, and the county
appraiser shall have the duty of reappraising all of the real property in
the county pursuant to guidelines and timetables prescribed by the di-
rector of property valuation and of updating the same on an annual basis.
In the case of multi-county appraisal districts, the district appraiser shall
have the duty of reappraising all of the real property in each of the coun-
ties comprising the district pursuant to such guidelines and timetables
and of updating the same on an annual basis. Commencing in 2000, every
parcel of real property shall be actually viewed and inspected by the
county or district appraiser once every six years. Any county or district
appraiser shall be deemed to be in compliance with the foregoing re-
quirement in any year if 17% or more of the parcels in such county or
district are actually viewed and inspected.

      Compilation of data for the initial preparation or updating of invento-
ries for each parcel of real property and entry thereof into the state com-
puter system as provided for in K.S.A. 79-1477, and amendments thereto,
shall be completed not later than January 1, 1989. Whenever the director
determines that reappraisal of all real property within a county is com-
plete, notification thereof shall be given to the governor and to the state
board of tax appeals.

      Valuations shall be established for each parcel of real property at its
fair market value in money in accordance with the provisions of K.S.A.
79-503a, and amendments thereto.

      In addition thereto valuations shall be established for each parcel of
land devoted to agricultural use upon the basis of the agricultural income
or productivity attributable to the inherent capabilities of such land in its
current usage under a degree of management reflecting median produc-
tion levels in the manner hereinafter provided. A classification system for
all land devoted to agricultural use shall be adopted by the director of
property valuation using criteria established by the United States depart-
ment of agriculture soil conservation service. For all taxable years com-
mencing after December 31, 1989, all land devoted to agricultural use
which is subject to the federal conservation reserve program shall be
classified as cultivated dry land for the purpose of valuation for property
tax purposes pursuant to this section. For all taxable years commencing
after December 31, 1999, all land devoted to agricultural use which is
subject to the federal wetlands reserve program shall be classified as native
grassland for the purpose of valuation for property tax purposes pursuant
to this section. Productivity of land devoted to agricultural use shall be
determined for all land classes within each county or homogeneous region
based on an average of the eight calendar years immediately preceding
the calendar year which immediately precedes the year of valuation, at a
degree of management reflecting median production levels. The director
of property valuation shall determine median production levels based on
information available from state and federal crop and livestock reporting
services, the soil conservation service, and any other sources of data that
the director considers appropriate.

      The share of net income from land in the various land classes within
each county or homogeneous region which is normally received by the
landlord shall be used as the basis for determining agricultural income
for all land devoted to agricultural use except pasture or rangeland. The
net income normally received by the landlord from such land shall be
determined by deducting expenses normally incurred by the landlord
from the share of the gross income normally received by the landlord.
The net rental income normally received by the landlord from pasture or
rangeland within each county or homogeneous region shall be used as
the basis for determining agricultural income from such land. The net
rental income from pasture and rangeland which is normally received by
the landlord shall be determined by deducting expenses normally in-
curred from the gross income normally received by the landlord. Com-
modity prices, crop yields and pasture and rangeland rental rates and
expenses shall be based on an average of the eight calendar years im-
mediately preceding the calendar year which immediately precedes the
year of valuation. Net income for every land class within each county or
homogeneous region shall be capitalized at a rate determined to be the
sum of the contract rate of interest on new federal land bank loans in
Kansas on July 1 of each year averaged over a five-year period which
includes the five years immediately preceding the calendar year which
immediately precedes the year of valuation, plus a percentage not less
than .75% nor more than 2.75%, as determined by the director of prop-
erty valuation.

      Based on the foregoing procedures the director of property valuation
shall make an annual determination of the value of land within each of
the various classes of land devoted to agricultural use within each county
or homogeneous region and furnish the same to the several county ap-
praisers who shall classify such land according to its current usage and
apply the value applicable to such class of land according to the valuation
schedules prepared and adopted by the director of property valuation
under the provisions of this section.

      It is the intent of the legislature that appraisal judgment and appraisal
standards be followed and incorporated throughout the process of data
collection and analysis and establishment of values pursuant to this sec-
tion.

      For the purpose of the foregoing provisions of this section the phrase
``land devoted to agricultural use'' shall mean and include land, regardless
of whether it is located in the unincorporated area of the county or within
the corporate limits of a city, which is devoted to the production of plants,
animals or horticultural products, including but not limited to: Forages;
grains and feed crops; dairy animals and dairy products; poultry and poul-
try products; beef cattle, sheep, swine and horses; bees and apiary prod-
ucts; trees and forest products; fruits, nuts and berries; vegetables; nurs-
ery, floral, ornamental and greenhouse products. Land devoted to
agricultural use shall not include those lands which are used for recrea-
tional purposes, other than that land established as a controlled shooting
area pursuant to K.S.A. 32-943, and amendments thereto, which shall be
deemed to be land devoted to agricultural use, suburban residential acre-
ages, rural home sites or farm home sites and yard plots whose primary
function is for residential or recreational purposes even though such prop-
erties may produce or maintain some of those plants or animals listed in
the foregoing definition.

      The term ``expenses'' shall mean those expenses typically incurred in
producing the plants, animals and horticultural products described above
including management fees, production costs, maintenance and depre-
ciation of fences, irrigation wells, irrigation laterals and real estate taxes,
but the term shall not include those expenses incurred in providing tem-
porary or permanent buildings used in the production of such plants,
animals and horticultural products.

      The provisions of this act shall not be construed to conflict with any
other provisions of law relating to the appraisal of tangible property for
taxation purposes including the equalization processes of the county and
state board of tax appeals.

 Sec.  8. K.S.A. 1999 Supp. 74-2433, 74-2433f, 79-201, 79-201j, 79-
5a01b, 79-1448, 79-1476 and 79-1606 are hereby repealed.
 Sec.  9. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 15, 2000.
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