SESSION OF 2001

SUPPLEMENTAL NOTE ON SENATE BILL NO. 69

As Amended by House Committee on Taxation

Brief ⁽¹⁾

SB 69, as amended, would amend KSA 2000 Supp. 72-6431 to renew for two years the mandatory school district general fund property tax levy and to reduce that levy from 20 to 18 mills in tax year 2002. The bill also would amend KSA 2000 Supp. 79-201x to expand from $20,000 to $30,000 the residential property tax exemption from such levy and to extend that exemption for two years.

The bill also would amend KSA 2000 Supp. 79-2925b to require taxing subdivisions, who under certain circumstances are required to adopt resolutions or ordinances acknowledging an increase in property taxes over the prior year, to publish such resolutions or ordinances once each week for two consecutive weeks in official county newspapers.

Background

The original bill would have renewed the 20-mill levy for two years. The House Taxation Committee amended the bill to reduce the mill levy to 18 mills in the second year; and to increase the residential property tax exemption from the school finance levy effective in tax year 2001. The House Taxation Committee also added the proposed amendment to KSA 2000 Supp, 79-2925b, sometimes known as the "Truth in Taxation" law.

The estimated reduction in local effort for school finance purposes relative to amounts used in the Governor's Budget and future projections associated therewith would be as follows:

	($ in millions)

FY 2002	($13.091)
FY 2003	($45.706)
FY 2004	($63.188)
FY 2005	($65.843)
FY 2006	($68.435)

5-Year Total	($256.262)

If the 20-mill school district general fund levy and the $20,000 exemption are not renewed, the reduction in local effort for school finance purposes relative to current assumptions used in preparation of the Governor's Budget would be $235.7 million in FY 2002; $403.7 million in FY 2003; $423.5 million in FY 2004; $442.1 million in FY 2005; and $460.1 million in FY 2006.

The Shawnee County District Court in 1993 ruled that a permanent imposition of the school finance levy violated a provision of the Kansas Constitution limiting property tax levies to two years. The 1994 Legislature subsequently reimposed the levy for a two-year period, and the Kansas Supreme Court (USD No. 229 v. State, 256 Kan 232) noted the district court's ruling on the matter and observed that the "infirmity" in the law had been corrected by the 1994 legislation.

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.cgi