Session Law

Identifying Information:L. 2002 ch. 194
Other Identifying Information:2002 Senate Bill 553
Tax Type:Property Tax
Brief Description:An Act relating to property taxation; requiring the submission of a report concerning land devoted to agricultural use valuation procedures; concerning the valuation of land devoted to agriculture use; amending K.S.A. 2001 Supp. 79-1476 and repealing the existing section.
Keywords:


Body:

CHAPTER 194

SENATE BILL No. 553


An Act relating to property taxation; requiring the submission of a report concerning land

devoted to agricultural use valuation procedures; concerning the valuation of land de-

voted to agriculture use; amending K.S.A. 2001 Supp. 79-1476 and repealing the existing


section.


Be it enacted by the Legislature of the State of Kansas:

New Section 1. On or before September 1, 2002, the director of

property valuation of the department of revenue shall issue and submit a

report pertaining to the interpretation and implementation of the provi-

sions of K.S.A. 79-1476, and amendments thereto, relating to the pro-

cedures of valuation of land devoted to agriculture use. Such report shall

include a summary of changes in each class of land which have been

implemented within the past 10 years, when the change was made, and

an explanation of the rationale for each such change. Such report shall

be submitted to the following: The governor, the legislative coordinating

council, the house taxation committee and the senate assessment and

taxation committee, and shall be made available to the public on the

internet.

Sec. 2. K.S.A. 2001 Supp. 79-1476 is hereby amended to read as

follows: 79-1476. The director of property valuation is hereby directed

and empowered to administer and supervise a statewide program of re-

appraisal of all real property located within the state. Except as otherwise

authorized by K.S.A. 19-428, and amendments thereto, each county shall

comprise a separate appraisal district under such program, and the county

appraiser shall have the duty of reappraising all of the real property in

the county pursuant to guidelines and timetables prescribed by the di-

rector of property valuation and of updating the same on an annual basis.

In the case of multi-county appraisal districts, the district appraiser shall

have the duty of reappraising all of the real property in each of the coun-

ties comprising the district pursuant to such guidelines and timetables

and of updating the same on an annual basis. Commencing in 2000, every

parcel of real property shall be actually viewed and inspected by the

county or district appraiser once every six years. Any county or district

appraiser shall be deemed to be in compliance with the foregoing re-

quirement in any year if 17% or more of the parcels in such county or

district are actually viewed and inspected.

Compilation of data for the initial preparation or updating of invento-

ries for each parcel of real property and entry thereof into the state com-

puter system as provided for in K.S.A. 79-1477, and amendments thereto,

shall be completed not later than January 1, 1989. Whenever the director

determines that reappraisal of all real property within a county is com-

plete, notification thereof shall be given to the governor and to the state

board of tax appeals.

Valuations shall be established for each parcel of real property at its

fair market value in money in accordance with the provisions of K.S.A.

79-503a, and amendments thereto.

In addition thereto valuations shall be established for each parcel of

land devoted to agricultural use upon the basis of the agricultural income

or productivity attributable to the inherent capabilities of such land in its

current usage under a degree of management reflecting median produc-

tion levels in the manner hereinafter provided. A classification system for

all land devoted to agricultural use shall be adopted by the director of

property valuation using criteria established by the United States depart-

ment of agriculture soil conservation service. For all taxable years com-

mencing after December 31, 1989, all land devoted to agricultural use

which is subject to the federal conservation reserve program shall be

classified as cultivated dry land for the purpose of valuation for property

tax purposes pursuant to this section. For all taxable years commencing

after December 31, 1999, all land devoted to agricultural use which is

subject to the federal wetlands reserve program shall be classified as na-

tive grassland for the purpose of valuation for property tax purposes pur-

suant to this section. Productivity of land devoted to agricultural use shall

be determined for all land classes within each county or homogeneous

region based on an average of the eight calendar years immediately pre-

ceding the calendar year which immediately precedes the year of valua-

tion, at a degree of management reflecting median production levels. The

director of property valuation shall determine median production levels

based on information available from state and federal crop and livestock

reporting services, the soil conservation service, and any other sources of

data that the director considers appropriate.

The share of net income from land in the various land classes within

each county or homogeneous region which is normally received by the

landlord shall be used as the basis for determining agricultural income

for all land devoted to agricultural use except pasture or rangeland. The

net income normally received by the landlord from such land shall be

determined by deducting expenses normally incurred by the landlord

from the share of the gross income normally received by the landlord.

The net rental income normally received by the landlord from pasture or

rangeland within each county or homogeneous region shall be used as

the basis for determining agricultural income from such land. The net

rental income from pasture and rangeland which is normally received by

the landlord shall be determined by deducting expenses normally in-

curred from the gross income normally received by the landlord. Com-

modity prices, crop yields and pasture and rangeland rental rates and

expenses shall be based on an average of the eight calendar years im-

mediately preceding the calendar year which immediately precedes the

year of valuation. Net income for every land class within each county or

homogeneous region shall be capitalized at a rate determined to be the

sum of the contract rate of interest on new federal land bank loans in

Kansas on July 1 of each year averaged over a five-year period which

includes the five years immediately preceding the calendar year which

immediately precedes the year of valuation, plus a percentage not less

than .75% nor more than 2.75%, as determined by the director of prop-

erty valuation, except that the capitalization rate calculated for property

tax year 2003, and all such years thereafter, shall not be less than 11%

nor more than 12%.

Based on the foregoing procedures the director of property valuation

shall make an annual determination of the value of land within each of

the various classes of land devoted to agricultural use within each county

or homogeneous region and furnish the same to the several county ap-

praisers who shall classify such land according to its current usage and

apply the value applicable to such class of land according to the valuation

schedules prepared and adopted by the director of property valuation

under the provisions of this section.

It is the intent of the legislature that appraisal judgment and appraisal

standards be followed and incorporated throughout the process of data

collection and analysis and establishment of values pursuant to this sec-

tion.

For the purpose of the foregoing provisions of this section the phrase

``land devoted to agricultural use'' shall mean and include land, regardless

of whether it is located in the unincorporated area of the county or within

the corporate limits of a city, which is devoted to the production of plants,

animals or horticultural products, including but not limited to: Forages;

grains and feed crops; dairy animals and dairy products; poultry and poul-

try products; beef cattle, sheep, swine and horses; bees and apiary prod-

ucts; trees and forest products; fruits, nuts and berries; vegetables; nurs-

ery, floral, ornamental and greenhouse products. Land devoted to

agricultural use shall not include those lands which are used for recrea-

tional purposes, other than that land established as a controlled shooting

area pursuant to K.S.A. 32-943, and amendments thereto, which shall be

deemed to be land devoted to agricultural use, suburban residential acre-

ages, rural home sites or farm home sites and yard plots whose primary

function is for residential or recreational purposes even though such prop-

erties may produce or maintain some of those plants or animals listed in

the foregoing definition.

The term ``expenses'' shall mean those expenses typically incurred in

producing the plants, animals and horticultural products described above

including management fees, production costs, maintenance and depre-

ciation of fences, irrigation wells, irrigation laterals and real estate taxes,

but the term shall not include those expenses incurred in providing tem-

porary or permanent buildings used in the production of such plants,

animals and horticultural products.

The provisions of this act shall not be construed to conflict with any

other provisions of law relating to the appraisal of tangible property for

taxation purposes including the equalization processes of the county and

state board of tax appeals.

Sec. 3. K.S.A. 2001 Supp. 79-1476 is hereby repealed.

Sec. 4. This act shall take effect and be in force from and after its

publication in the statute book.

Approved May 29, 2002.


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Date Composed: 10/10/2002 Date Modified: 10/10/2002