Brief(1)
S.B. 124, as amended, would extend the current property tax-exempt status of not-for-profit adult care homes to include homes that also house a licensed not-for-profit daycare center for children. This portion of the act would be retroactive to tax year 1997.
The bill would also provide a property tax exemption for certain student unions and dormitories. The specific property addressed by this bill includes student unions and dormitories which are owned and operated by an area vocational school, an area vocational-technical school, a technical college, or a community college. Similar property owned and operated by Regents institutions and private colleges and universities are already exempt from property taxes. This property tax exemption would be retroactive to tax year 1998.
Finally, the bill would provide that for all tax years commencing after December 31, 1976, adult care homes which use property in a manner consistent with federal IRS ruling 72-124 would be deemed to be operating at "lowest feasible cost" for purposes of qualifying for property tax exemptions.
Background
A hearing on S.B. 124, in its original form as it pertained only to the property tax exemption for not-for-profit adult care homes housing not-for-profit day care centers for children, was held by the Senate Committee. Proponents of the bill included Senator Janice Hardenburger, the bill sponsor, as well as a representative of the Kansas Association of Homes and Services for the Aging.
At that time, the Senate Committee amended the bill to make it retroactive to tax year 1997. (According to testimony, no taxes have been collected from such facilities.)
After S.B. 124 was passed out of the Senate Committee, it was subsequently rereferred back. At the second hearing on the bill, the original contents of H.B. 2001 pertaining to a property tax exemption for certain student unions and dormitories, were amended into S.B. 124.
A hearing on the property tax exemption for certain student unions and dormitories was held by the House Taxation Committee. Proponents included Representative Jim Morrison, the bill sponsor, and a representative of the Kansas Association of Area Vo-Tech Schools. This provision later passed the House after being placed on the Consent Calendar.
The House Committee amended the bill at the suggestion of the Kansas Association of Homes and Services for the Aging, whose representative said that the new language regarding adult care homes operating at lowest feasible cost would effectively overturn a Kansas Court of Appeals decision (In re Tax Exemption Application of Presbyterian Manor, Inc., 16 Kan App. 2d 710,830 P.2d, 1992).
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/bill_search.html.