CHAPTER 156 HOUSE BILL No. 2205 An Act concerning property taxation; relating to exemptions, fair market value and special
assessments; relating to the sale of real estate for delinquent taxes; amending K.S.A. 79-
201q, 79-201s, 79-503a and 79-2804h and K.S.A. 2002 Supp. 79-213 and 79-2804g and
repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 79-201q is hereby amended to read as follows: 79-
201q. The following described property, to the extent herein specified,
shall be and is hereby exempt from all property or ad valorem taxes levied
under the laws of the state of Kansas:

      (a)  (1) All property owned and primarily operated as an airport by a
political subdivision, including property leased by the political subdivision
for purposes not essential to the operation of an airport, for all taxable
years commencing before January 1, 1993.

      (2) For all taxable years commencing after December 31, 1992, all
property owned and primarily operated as an airport by a political sub-
division, including property leased by the political subdivision for pur-
poses essential to the operation of an airport. Payments in lieu of property
taxes may be required for any or all of such years for such leased property,
and such payments shall be apportioned and distributed in the same man-
ner as general property taxes.

      (b) If the term of any lease existing on April 15, 1991, of any such
property for purposes not essential to the operation of an airport extends
beyond tax year 1992, the expiration date of the exemption provided by
subsection (a) shall be the tax year next following the tax year during
which such lease expires. Payments in lieu of taxes may be required for
taxable years commencing after December 31, 1992, for any such prop-
erty for the duration of any such lease, and all such payments shall be
apportioned and distributed in the same manner as general property
taxes.

      (c) Nothing in this section shall be deemed to apply to or limit the
operation of K.S.A. 27-319, 27-330 or 79-201a Second, and amendments
thereto.

      (d) All property taxes, including any penalties and interest accrued
thereon, imposed upon any property described in subsection (a) and (b)
for all taxable years to which such subsections apply are hereby declared
to be cancelled but any such amounts paid in any such year shall not be
refunded except that with respect to Liberal municipal airport such
amounts shall be refunded.

      (e) The county or district appraiser shall value the land and improve-
ments, and the value of the land and improvements may be entered on
the assessment rolls in separate entries and descriptions. The provisions
of this subsection shall be applicable to all taxable years commencing after
December 31, 1992.

      Sec.  2. K.S.A. 79-201s is hereby amended to read as follows: 79-201s.
(a) For all taxable years commencing after December 31, 1991, all prop-
erty owned and primarily operated as an airport by an airport authority
established under K.S.A. 3-162 et seq., and amendments thereto, includ-
ing property leased by the airport authority for aviation related purposes,
shall be exempt from all property or ad valorem taxes levied under the
laws of this state. If the term of any lease existing on April 15, 1991, of
any property for purposes not aviation related extends beyond tax year
1991, such property shall be exempt from all property or ad valorem taxes
levied under the laws of this state until the tax year next following the tax
year during which such lease expires.

      (b) All property or ad valorem taxes, including any penalties and in-
terest accrued thereon, imposed upon any property described by subsec-
tion (a) for all taxable years commencing prior to January 1, 1992, are
hereby declared to be cancelled.

      (c) The county or district appraiser shall value the land and improve-
ments, and the value of the land and improvements may be entered on
the assessment rolls in separate entries and descriptions. The provisions
of this subsection shall be applicable to all taxable years commencing after
December 31, 1991.

      Sec.  3. K.S.A. 2002 Supp. 79-213 is hereby amended to read as fol-
lows: 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 exemption,
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 the year immediately pre-
ceding the year in which the exemption application is filed in accordance
with subsection (a).

      (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; (15) property used for residential purposes which is exempted pur-
suant 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, ve-
hicles 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 exemption applica-
tions filed in accordance with subsection (a) after December 31, 1995
2001.

      Sec.  4. K.S.A. 79-503a is hereby amended to read as follows: 79-
503a. ``Fair market value'' means the amount in terms of money that a
well informed buyer is justified in paying and a well informed seller is
justified in accepting for property in an open and competitive market,
assuming that the parties are acting without undue compulsion. In the
determination of fair market value of any real property which is subject
to any special assessment, such value shall not be determined by adding
the present value of the special assessment to the sales price. For the
purposes of this definition it will be assumed that consummation of a sale
occurs as of January 1.

      Sales in and of themselves shall not be the sole criteria of fair market
value but shall be used in connection with cost, income and other factors
including but not by way of exclusion:

      (a) The proper classification of lands and improvements;

      (b) the size thereof;

      (c) the effect of location on value;

      (d) depreciation, including physical deterioration or functional, eco-
nomic or social obsolescence;

      (e) cost of reproduction of improvements;

      (f) productivity;

      (g) earning capacity as indicated by lease price, by capitalization of
net income or by absorption or sell-out period;

      (h) rental or reasonable rental values;

      (i) sale value on open market with due allowance to abnormal infla-
tionary factors influencing such values;

      (j) restrictions imposed upon the use of real estate by local governing
bodies, including zoning and planning boards or commissions; and

      (k) comparison with values of other property of known or recognized
value. The assessment-sales ratio study shall not be used as an appraisal
for appraisal purposes.

      The appraisal process utilized in the valuation of all real and tangible
personal property for ad valorem tax purposes shall conform to generally
accepted appraisal procedures which are adaptable to mass appraisal and
consistent with the definition of fair market value unless otherwise spec-
ified by law.

      New Sec.  5. As part of the contract or prior to the execution of a
contract for the sale of any real property which is subject to a special
assessment or fee pursuant to K.S.A. 12-6a01 et seq., and amendments
thereto, the seller of the property shall disclose to the buyer that the
property is subject to such special assessment or fee or located in an
improvement district created pursuant to K.S.A. 12-6a01 et seq., and
amendments thereto. If the amount of such special assessment or fee is
unknown, the seller shall make a good faith estimation of such amount.
The seller of the property shall obtain a written acknowledgment from
the buyer that the buyer is aware of such assessment or fee or that the
property is located in an improvement district created pursuant to K.S.A.
12-6a01 et seq., and amendments thereto.

      New Sec.  6. As part of the contract or prior to the execution of a
contract for the sale of any real property which is subject to a special
assessment or fee pursuant to K.S.A. 12-601 et seq., and amendments
thereto, the seller of the property shall disclose to the buyer that the
property is subject to such special assessment or fee or located in an
improvement district created pursuant to K.S.A. 12-601 et seq., and
amendments thereto. If the amount of such special assessment or fee is
unknown, the seller shall make a good faith estimation of such amount.
The seller of the property shall obtain a written acknowledgment from
the buyer that the buyer is aware of such assessment or fee or that the
property is located in an improvement district created pursuant to K.S.A.
12-601 et seq., and amendments thereto.

      Sec.  7. K.S.A. 2002 Supp. 79-2804g is hereby amended to read as
follows: 79-2804g. (a) Whenever any tract, lot or piece of real estate is
offered for sale at public auction pursuant to K.S.A. 79-2804, and amend-
ments thereto, such tract, lot or piece of real estate shall not be sold,
either directly or indirectly, to:

      (1) Any person having a statutory right to redeem such real estate
prior to such sale, pursuant to the provisions of K.S.A. 79-2803, and
amendments thereto, except that this paragraph (1) shall not prohibit
sale to any person or such person's assignee who held an interest in such
real estate as mortgagee of record at the time of the sale;

      (2) any parent, grandparent, child, grandchild, spouse, sibling, trustee
or trust beneficiary who held an interest in a tract as owner or holder of
the record title or who held an interest at any time when any tax consti-
tuting part of the county's judgment became due; or

      (3) with respect to a title holding corporation, any current or former
stockholder, current officer or director, or any person having a relation-
ship enumerated in paragraph (2) to such stockholder, officer or director.

      (b) If any such real estate is acquired by a county pursuant to K.S.A.
79-2804, and amendments thereto, and, at the end of six months from
and after confirmation of such sale to the county, such real estate is ad-
vertised for sale at public auction, as provided in K.S.A. 79-2804f, and
amendments thereto, such real estate shall not be sold, either prior to or
at such auction, to any person having a statutory right to redeem such
real estate, under the provisions of K.S.A. 79-2803, and amendments
thereto, for an amount less than the original judgment lien and interest
thereon, plus the costs, charges and expenses of the proceedings and sale,
as set forth in the execution and order of sale issued pursuant to K.S.A.
79-2804, and amendments thereto.

      (c) If any tract, lot or piece of real estate purchased at public auction
pursuant to K.S.A. 79-2804, and amendments thereto, is transferred, sold,
given or otherwise conveyed to any person who had a statutory right to
redeem such real estate prior to such sale pursuant to K.S.A. 79-2803,
and amendments thereto, within 10 years of the date of the public auc-
tion, such person shall be liable for an amount equal to the original judg-
ment lien and interest thereon from the date of the public auction, except
that this subsection shall not apply to any person or such person's assignee
who held an interest in such real estate as mortgagee of record at the time
of the sale.

      (d) The provisions of this section shall apply to the sale or conveyance
of any real estate by a county land bank established pursuant to K.S.A.
2002 Supp. 19-26,104, and amendments thereto.

      Sec.  8. K.S.A. 79-2804h is hereby amended to read as follows: 79-
2804h. No sale of real estate as provided for in article 28 of chapter 79
of the Kansas Statutes Annotated, and amendments thereto, shall be con-
firmed as provided for in K.S.A. 79-2804, and amendments thereto, until
the purchaser at the sale, shall file files with the clerk of the court, an
affidavit stating that the purchase of the real estate was not made, either
directly or indirectly, for any person having the statutory right to redeem,
other than any person or such person's assignee who held an interest in
such real estate as mortgagee of record at the time of the sale.

 Sec.  9. K.S.A. 79-201q, 79-201s, 79-503a and 79-2804h and K.S.A.
2002 Supp. 79-213 and 79-2804g are hereby repealed.

 Sec.  10. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 22, 2003.
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