Session Law

Identifying Information:L. 2003 ch. 156
Other Identifying Information:2003 House Bill 2205
Tax Type:Property Tax
Brief Description: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.
Keywords:


Body:

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, 2002.


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Date Composed: 10/29/2003 Date Modified: 10/29/2003