Brief⁽¹⁾

H.B. 2584 relates to countywide and city retailers' sales taxes. First, a special distribution formula applicable to the Geary County sales tax would be eliminated. Under current law, that distribution is based in part on population, exclusive of persons residing at Fort Riley. Following elimination of this provision, the distribution would be based on total tangible property tax levies.

Sherman County would be authorized to levy an additional county sales tax at the rate of 0.25, 0.50, or 0.75 percent, for the purpose of reconstructing and improving County Roads 64 and 65. The tax would expire upon payment of all such costs.

Dickinson County would be authorized to levy an additional 0.5 percent for five years for roadway construction and improvement.

Any city in Johnson County would be authorized to levy an additional 0.125 percent for public infrastructure projects.

A new class of city would be created, consisting of cities which have imposed a tax for health care. The authority for Rossville to levy for a flood control project would be repealed. That authority has expired.

Ford County would be authorized to levy a tax for construction or remodeling of a jail, law enforcement center facility, or other county administrative facility. The tax would expire when sales tax sufficient to pay all the costs has been collected. Ford County's rate could be up to 1.5 percent.

A unified government would be authorized to expand an enterprise zone established within its jurisdiction prior to July 1, 1992, to an area not exceeding 200 percent of its original size regardless of whether the enlargement crosses a boundary of a city within its jurisdiction if the Secretary of Commerce and Housing makes the same findings as required for enlargement of an enterprise zone by a city.

Background

The current special distribution provision for the Geary County sales tax was enacted in the early 1980s as a result of a dispute between Junction City and Geary County. Officials of both local units of government now support its elimination, which would restore the distribution formula applicable to most other countywide sales taxes.

The Senate Committee on Assessment and Taxation amended the bill to incorporate the provisions of S.B. 493, as passed by the Senate, which related to Sherman County, Dickinson County, Overland Park, and cities which impose taxes for health care.

County Roads 64 and 65 in Sherman County formerly were U.S. Highway 24, which was abandoned in the 1970s upon completion of Interstate 70. Sherman County assumed responsibility for the maintenance at that time. The roads are 34 miles long and have deteriorated, requiring extensive maintenance work. Sherman County already imposes a county sales tax at the rate of 1.25 percent and lacks authority to impose additional tax for this purpose. If the bill passes, the county attorney expressed the county's intent to submit the question to the voters of Sherman County at the August primary election.

Recently, the Kansas Court of Appeals opined that the city sales tax statutes are nonuniform and thus the statute is subject to amendment by charter ordinance. The amendment relating to cities which have imposed a tax for health care is intended to cure the nonuniformity. Three cities: Neodesha, Wamego, and Wellington, have imposed a city sales tax for this purpose. Rossville's authority to levy for flood control was not used and has expired.

The Senate Committee of the Whole amended the bill by inserting the provisions relating to Ford County, to cities in Johnson County (striking a reference to Overland Park), and to the authority of a unified government to expand an enterprise zone.

Elections are required prior to the imposition of or increase in any local sales tax.

According to fiscal notes from the Division of the Budget, the bill would not affect State General Fund receipts.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.